Deloitte: Back-to-School and Back-to-College Make a Comeback

NEW YORK, July 8, 2021 /PRNewswire/ --

Key takeaways

• With clarity about the upcoming school year and consumer sentiment continuing to rise, back-to-school spending will be at its highest level in recent years, reaching a collective $32.5 billion for K-12 students, or approximately $612 per student; back-to-college shoppers will spend $26.7 billion, or approximately $1,459 per student.
• The pandemic propelled education into the digital age, fueling a 37% increase in technology spending for K-12 students and 17% increase for college students, creating a new baseline for how and what parents purchase.
• A year of supply chain challenges and lingering concerns about stockouts pulls spend forward with 59% of K-12 planned spending to occur by the end of July.
• Shopping behaviors first adopted due to safety will continue as a desire for convenience takes over. Parents of K-12 students plan to shop more frequently at online retailers and dollar stores, while 34% of consumers plan to leverage services such as BOPIS (buy online, pick up in store) and curbside pickup more frequently.
• While online shopping continues to rise, parents of K-12 students are twice as likely as parents of college students to use emerging technology to complete their purchases.

Why this matters
After navigating an uncertain year filled with anxiety and fluctuating school formats, the vaccine rollout and subsequent reduction in COVID-19 cases is giving parents and students hope for a return to normalcy this fall. The overall outlook heading into the fall is bright, with 55% of K-12 parents and 46% of college parents more confident about the economy's prospects (up from 17% and 14% respectively, in 2020), and household financial situations holding steady with 78% of K-12 parents and 75% of college parents in similar or better shape than last year. As a result, parents are ready to spend, and the digital acceleration that occurred in the past year has created a new baseline for tech integration in the education system, altering not only the types of products needed for both virtual and in-person learners, but also how parents shop for them. Parents of college-age children are planning to spend more as well, with spending poised to reach record levels particularly among middle-income families and surpassing pre-pandemic levels.

As consumer sentiment improves and digital adoption increases, they will continue to impact not only how consumers approach back-to-school and back-to-college shopping, but how and what they purchase.

Back-to-school spending is bright for technology
As many K-12 parents anticipate a more normal return to the classroom, back-to-school spending is expected to reach $32.5 billion, averaging $612 per student in grades K-12. This represents a 16% increase from 2020, which is the highest in recent years and greater than pre-pandemic levels.

• Overall spending will increase across categories with 40% of K-12 households planning to spend more on back-to-school items (up from 22% in 2020), including clothing, supplies, computers and electronics. The majority of these parents cite their children's need for more items this year, as a reason for the increased spend.
• Spending on technology products (personal computers, smartphones, tablets, wearables, etc.) is set to increase 37% over 2020 to $11.8 billion, as parents adjust to the realities of a more digitally oriented education system. Wearable technology will see the biggest gain.
• Because their children are using more digital technologies in and out of the classroom, 44% of households plan to purchase fewer traditional back-to-school supplies.
• However, 58% will spend the same or more on online learning resources such as e-learning platform subscriptions, online courses, educational tool licenses and online tutors to supplement classroom learning.

Key quote
"As Americans anticipate a more traditional return to the back-to-school season, the good news is that parents are ready to spend more and earlier to ensure their children have what they need to be successful. This includes increased spending on technology for both K-12 and college students, demonstrating a shifting focus on how students learn as well as how parents are shopping for these necessities. We've entered a new era of schooling where traditional back-to-school supplies are fading in favor of tech, while consumers expect certain conveniences and competitive prices. Retailers that demonstrate their resiliency during this time will appeal to shoppers and be better positioned to capitalize on growing consumer sentiment."

-          Rod Sides, vice chairman, Deloitte LLP, and U.S. retail, wholesale and distribution leader

Digital preferences accelerate online shopping
Technology isn't just impacting what parents buy for back-to-school, it's driving how they complete their transactions. The level of online spend for back-to-school remains high (39% compared to 37% in 2020), while in-store spending is flat at 43%, demonstrating a fundamental shift in consumer shopping patterns.

• K-12 families plan to spend $12.5 billion online this back-to-school season, up from $10.4 billion last year.
• A majority of consumers plan to use personal computers (67%) or smartphones (58%) to shop, up from 64% and 46% in 2020, respectively.
• Additionally, the survey notes that social media is an integral part of the shopping journey for 41% of K-12 parents, up 25% from 2020. Among those using social media, 42% are visiting retailers' social media pages not only to assess their products, but to get a sense of their personality and purpose, compared to 30% in 2020.
• Further, 44% of consumers plan to leverage tech-enabled shopping tools offered by retailers for their back-to-school purchases. Shopping using a voice assistant is the most preferred offering (20%) followed by digital wallets (17%); and "buy" buttons on social media, virtual reality and chatbots (each at 15%).

COVID-19 continues to influence shopping behaviors
Despite consumer optimism and better clarity about the upcoming school year, pandemic-influenced shopping habits are affecting timing and preferences for the back-to-school season. And while online spending continues at high levels, 18% of K-12 households remain undecided about where they will do their shopping, representing a $6 billion opportunity for retailers.

• After a year of supply chain challenges, 50% of shoppers are concerned about stockouts, especially for tech items. Consumers plan to shop earlier as a result; 59% of back-to-school spending will occur by the end of July (versus 45% in 2020).
• Although mass merchants remain the most popular retail format to visit (74%), online-only stores are the preferred format for tech purchases. Overall, more people expect to shop at online retailers (49%) and closer to home at dollar stores (41%) compared to last year.
• Fast-fashion and thrift store visits are also on the rise as interest in athleisure (61%) and fashionable clothing (57%) elevated among higher-income households.
• When selecting where to shop, K-12 parents continue to seek a good deal for their purchases (51%), but they also expect improved product quality (48% versus 43% in 2020).
• Consumers expect the conveniences they adopted during the pandemic to remain available; 34% plan to use BOPIS or curbside pickup more frequently for back-to-school shopping.
• Further underscoring the need for convenience, the popularity of preconfigured kits is on the rise with 4 in 10 planning to purchase from PTAs or charities, doubling since the pandemic and providing an opportunity to support their local communities.

Back-to-college spending driven by confidence in the return to campus
As most colleges plan to fully reopen this fall, parents are less anxious about the return to campus (34% versus 62% in 2020), and more than three-quarters of parents (78%) expect their college-age children to be vaccinated by September 2021. Back-to-college parents plan to spend $26.7 billion, or approximately $1,459 per student, up 5% from last year.

• The pandemic spurred digital integration for higher education, with expected tech category growth of 17%. Meanwhile, spending on traditional college supplies is down 9% to $6.8 billion.
• More than one-third (34%) of college families expect to spend more on college-items this year. Middle-income families' spending is set to rebound and surpass pre-pandemic levels. Further, their estimated spend is more than that of higher-income families in computer hardware, while dorm and apartment furniture and electronic gadgets are also seeing renewed investments.
• Pandemic shopping trends linger for college families as well, as they plan to spend $9.4 billion online this fall.
• Despite the preference for online shopping for back-to-college purchases, the overall use of tech shopping tools like digital wallets and voice assistants is lower for back-to-college shoppers (30%) than for back-to-school consumers (44%).
• Similarly, the back-to-college consumer is half as likely to use social media to assist in their shopping than those purchasing items for back-to-school (22% versus 41%).

Key quote
"Like other industries, higher-education was forced into the digital realm during the pandemic, with colleges instituting hybrid formats seemingly overnight, originally planned to rollout in a matter of years. This acceleration of digital learning spurred an even greater investment in the tech category. The increase in tech spending, combined with stimulus checks, child tax credits and improving consumer sentiment, are providing additional opportunities for retailers this year as consumers have the confidence to up their spend and shop earlier. Those that can capitalize on the impacts the pandemic has had on consumers — how, what and when they purchase — should be well positioned."

-          Stephen Rogers, executive director, Deloitte Insights Consumer Industry Center, Deloitte LLP

Connect with us on Twitter at @DeloitteCB or on LinkedIn @RodSides and @StephenRogers.

About the surveys
The "2021 Deloitte Back-to School Survey" was conducted online using an independent research panel between May 27 to June 5, 2021 and surveyed 1,200 parents who have at least one child attending school in grades K-12 this fall.

The "2021 Deloitte Back-to-College Survey" was conducted online using an independent research panel between May 28 to June 17, 2021. The survey polled a sample of 961 parents of children heading to colleges and universities this fall.

About Deloitte
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world's most admired brands, including nearly 90% of the Fortune 500® and more than 7,000 private companies. Our people come together for the greater good and work across the industry sectors that drive and shape today's marketplace — delivering measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to see challenges as opportunities to transform and thrive, and help lead the way toward a stronger economy and a healthier society. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Building on more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte's more than 330,000 people worldwide connect for impact at www.deloitte.com.

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