The Return of Back-to-School Shopping

As summer winds to a close, retail stores across the nation are dusting off their back-to-school signs and loading shelves full of fresh loose leaf paper, pencils, pens, and everything else students need to hit the books and hallways once again. According to the National Retail Federation, the back-to-school rush is the second biggest sales event of the year after the winter holiday season. A lot of hope and expectation hangs on how retailers perform during this key period and the prognosis, so far, looks positive: while 2009 was unarguably a terrible year for retail overall, 2010 is predicted to bring more spending and increased sales figures all around.

Today, we explore how economic conditions might affect back-to-school shopping, what items are must-haves for the new school year and what consumers are doing to make their dollars stretch further this shopping season.

Retail On The Rise

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Figures from the first half of 2010 indicate that retail shopping is slowly making a comeback and some feel that this will certainly have a positive impact on back-to-school shopping behavior. For instance, according to a study performed by the National Retail Federation (NRF), American families are expected to spend about $606.40 each on back-to-school clothing, shoes, supplies  and electronics this year. This represents a significant increase over last year, when the average family spent around $548.72.

If these numbers turn out to be accurate, it would mean a 10% increase in spending over 2009, which would signal a marked improvement in the retail sector and bolster the recent economic reports that suggest the return of the American consumer. National Public Radio (NPR) remains skeptical of the estimations, however. Their report on back-to-school spending behavior comments that “…2009 was a dismal year for retailers, and based on relatively weak July sales, those numbers may prove to be overly optimistic.”

Conservative Consumerism and Cost-Conscious Shopping

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While the economic data does indicate that consumers are returning to shopping malls and stores, retailers must be aware that American’s behavior with money is quite different than in years past. Today’s consumers are much more cost-conscious than they were before the recession era hit—while they aren’t afraid to spend, their focus is on saving as much as possible and finding the best bargains that they can.

Indications of this new mindset can be seen in the early back-to-school shopping reports. Alison Paul, a retail consultant for the firm Deloitte, says that, “The No. 1 destination continues to be discount stores, and a good two-thirds of consumers said they would only spend using cash and debit cards.” Perhaps this focus on saving money and relying on what one has instead of money one can access through credit helps explain the recent drop in sales from in-vogue teen retail outlets such as Hot Topic (showing a 9% sales decline), Wet Seal (showing a 4.3% decline) and American Eagle (showing a flatlining of sales) as reported by the LA Times.

What Are They Buying?

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Aside from the standard box of pens and three-subject binders, what are students looking to purchase this season? It seems that both young adults and college students have gone technology crazy, making items like smartphones and the Apple iPad must-haves for the coming school year. And, according to Cnet News, while sales of PC products have been declining, iPad sales remain strong, possibly due to to the item’s cool factor and cutting-edge performance, design and portability. 

Back-to-school also means a new, or at least updated, wardrobe for many students. Styles change every year for both younger and older kids and, this year, popular fashion choices for girls include a jean-legging combo called jeggings, plaid shirts and long tunics. Boys of all ages will probably be wanting numerous graphic tees and shoes by Vans and Etnies.

But the biggest back-to-school shopping trip is unarguably for new college students who are moving away from home and need to purchase the basic amenities for dorm life for the first time. Smaller flat screen televisions are always a popular choice, as many parents won’t allow their sons or daughters to take the living room set off to the college. MarketWatch.com also notes that smartphones such the HTC EVO and BlackBerry Curve are sought-after items because of the mobile Internet access and wide variety of useful apps that they offer to students on their own for the first time.

Last-Minute College Supply Rush

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With so many things on their to-do list, new college students often find themselves in a last-minute rush to gather the supplies they need before the big move and the semester begin. Getting prepared for college is quite different than going back to middle or high school: independent class scheduling, loan procurement, moving out of your home and into a dorm. With so much to worry about and straighten out, buying extra-long sheets and mini fridges can get lost in the fray.

Many students find themselves pressed for time and often arrive in a new and unfamiliar place with none of the necessities. With a tight budget, no access to a car and one day to get everything they need before the parents leave, comparison shopping sites can be extremely useful. But, while students can certainly order products online, many times they need the necessities right away. Plus, what freshman has extra money for shipping? Shameless plug: college students can use Milo to search for the items they need immediately and find the stores closest to them that have those items in-stock at the best price. Time, money and sanity are preserved, and the students and parents have one less thing to worry about on move-in day.

Digital Savings

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Many modern consumers are aware that careful online searching might turn up significant savings for items for which they would have otherwise paid full price. For example, the NRF survey found that 30.3% of parents planned to do comparison shopping online before hitting the local stores, just to see if they could find coupons or better prices on expensive back-to-school supplies. It seems that current economic conditions are at play here, pushing the idea of savings into the forefront of all shopper’s minds.

ABC recently profiled numerous online options that bargain-hunting consumers have this back-to-school season, including the popular coupon website RetailMeNot.com, which features an entire “back-to-school” section that contains special discount coupons for stores such as OfficeMax and Office Depot. Other resources, such as Coupon Sherpa, can also be of great help to the 30% of shoppers looking to discover savings on the Internet. Back-to-school shopping is a great way to get kids excited for the school year and the local coupons available on this site allow parents to save money while still going on a shopping trip with their children.

And, while looking online for coupons can be helpful in saving money, buying online particularly makes sense when it comes to large expenses such as textbooks—one of the biggest back-to-school costs for college students across the country. Entire websites exist solely to help students save money on books, which can cost hundreds of dollars each semester if purchased at campus-run bookstores. One site in particular, Textbooks.com, claims to be able to save students a whopping 90% on the books they need, a figure any budget-conscious college kid can surely appreciate.

Big Boom On The Horizon?

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The LA Times reports that so far, “Major chain stores reported that sales rose a modest 2.9% in July compared with a year earlier.” This is close, but not quite as high as the predicted 3.1% increase in this sector for the back-to-school season. But retailers need not lose hope yet. Some believe that parents are waiting until the end of the season to do the bulk of their shopping, hoping to take advantage of the sales and discounts that will inevitably come in the next few weeks.

“The days of buying merchandise well before school starts are gone now,” claims Marshal Cohen, a chief industry analyst at market research firm NPD Group. “Kids would rather wait to see what the cool brands and styles are…and parents would rather put off spending until their kids will actually wear what they buy.” Cohen concludes, “Don’t mark the back-to-school shopping season absent this year—it will just be a little tardy.”

In the end, the back-to-school boom could most certainly be on the horizon and retailers still have a good shot at hitting the 3.1% increase they’re looking for in order to make their numbers. And, whatever happens by the end of the shopping season, one thing’s for sure: this year’s back-to-school is certainly unique—in more ways than one.

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