Back-To-School Spending Rises, But Looks Different This Fall

U.S. school districts, including colleges, in many parts of the country are bringing back in-person attendance this fall.

This sets the tone for back-to-school spending, which the National Retail Federation and Prosper Insights & Analytics expect to reach an all-time high this year, despite the increase in Delta variant cases of the COVID-19 virus. 

While a Deloitte survey shows that parents will spend more on their kids back-to-school clothes, material, and tech gadgets, Microsoft Advertising expects to see online retail advertising and buying trends rise on its network.

Most schools will begin opening in late August and early September. Microsoft ran an external survey on its network in May 2021, with more than 1,000 parents who were planning to shop for their children online. Nearly half of back-to-school shoppers -- at 42% -- plan to shop earlier this year. Of these, 40% plan to start shopping two to four weeks before the school year begins, and an additional 24% plan to start 1-2 weeks prior.

Microsoft also expects spending to increase as people get started early. In fact, 44% of shoppers intend to spend more on back-to-school products than they did last year. About 77% intend to spend at least $300, and 19% of survey respondents plan to spend at least $1,000 this year.

Writing materials, apparel, hygiene products, and electronics are some of the top trending items. For example, 85% of survey respondents cited writing materials as an item they intend to buy. Some 85% cited clothing and/or shoes, while 75% cited backpacks, 73% cited hygiene products, 70% cited art and craft supplies, and 62% cited lunch boxes and water bottles.

More college students are expected to enroll this fall, which may be partially due to testing being optional at most schools. Admissions have stopped requiring SAT or ACT, according to Microsoft Advertising, citing the National Student clearinghouse community impact newspaper. The University of Texas reported a 23% year-over-year (YoY) increase from 2019-2020 compared to 2021-2022 in the number of applications received for the upcoming school year. As of May 2021, 10% of U.S. colleges and universities are requiring COVID-19 vaccinations.

A Deloitte survey shows that parents expect to spend 16% more on back-to-school shopping this year, up from the 1% to 3% seen in recent years. In 2021, parents expect to spend $612 per child on average, up from $529.

Don’t count out digital learning tools. They are expected to replace traditional school supplies, driving tech sales up 37% YoY. Even as schools open, more than half of respondents plan to spend on online resources.

Tech products are expected to rise from 28.1 billion in 2020 to $32.5 billion in 2021, according to Deloitte.

Amidst delayed shipments and product shortages from online orders, 48% of consumers plan to spend most of their budget, 74%, at mass merchant stores this year, according to Deloitte.

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