Inflation Drives Back-to-school Shoppers to Get an Early Start
School may have just let out for summer, but consumers say they aren’t getting much of a break.
According to new findings from the KPMG 2023 Consumer Back to School survey, which looked at nearly 600 U.S. households with students, b-t-s shopping is starting earlier than ever as shoppers look to mitigate higher prices with promotions and discounts. On average, survey respondents expect to spend $377 per child this year, a 21 percent increase from 2022.
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More than 40 percent of b-t-s shoppers say they are in a worse financial situation compared to a year ago, while 32 percent report feeling they are better financially. More than 60 percent of respondents said they are concerned about inflation with 82 percent expecting to spend more per student in 2023 due to rising prices.
A majority of consumers (70 percent) will be looking for early discounts to counter higher prices on b-t-s items with 62 percent of consumers saying they have already started shopping already or plan to do so before Aug. 1. Another 57 percent told KPMG they will be looking intentionally for “cheaper brands.”
“Inflation is pressing consumers to start early and find the deals from retailers willing to offer the door-buster promotions that will drive traffic and excitement in a challenging environment,” said Matt Kramer, consumer and retail sector leader at KPMG. “Winning customers through great value and experience in tough times can go a long way to building long-term loyalty.”
Notably, of the respondents who say they will spend less on b-t-s (17 percent), almost half cite having less money to spend on school supplies with another 45 percent reporting they need fewer items.
On average, 56 percent of shoppers’ budgets will be allotted to apparel, footwear and core school supplies — up from 54 percent in 2022. Consistent with KPMG’s findings in 2022, about 80 percent of b-t-s shoppers consider apparel and footwear to be “essential parts of b-t-s shopping.”
Within this category, more than 60 percent of respondents report seeing price increases. Of those 74 percent say they plan to handle the increases by changing purchasing behaviors. For 50 percent, this will mean buying fewer items. At the same time, households that consider luxury items as part of their b-t-s budget have decreased from 53 percent in 2022 to just 37 percent in 2023.
Respondents report also seeing increased prices in the office and school supply category with 54 percent planning to change purchasing behaviors to mitigate this. More than 30 percent say they plan to “buy more products on promotion or discount” or “search for better bargains.”
As b-t-s consumers shop, mass merchants are expected to remain the top channel with KPMG expecting these retailers to win a 37 percent share of wallet. Compared to findings in 2022, online-only and mass retailers are expected to take share from department stores, apparel and specialty retailers in 2023. Online-only retailers are also expected to earn consumers spending slightly more (2 percent).
Following the trend seen in 2022, consumers are expected to do a majority of b-t-s shopping in stores (60 percent). Delineations of cohorts are seen here, however, with Gen Z and Millennials expecting to shop more online than Gen X and Baby Boomer b-t-s shoppers. Similarly, higher-income households expect to do more of their b-t-s shopping online compared to lower-income households.
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