The 2024 back-to-school season is a difficult market for retailers, with total spending projected to drop slightly from $31.9 billion in 2023 to $31.3 billion. It’s a decline that, while modest, shows a broader trend of tightened consumer budgets amid ongoing economic pressures.
These households are expected to reduce their back-to-school spending by 4%. Reductions are a reflection of tighter budgets and a direct result of inflationary pressures that have significantly increased the cost of essentials like groceries and childcare.
For these families, discretionary spending on items such as school supplies and clothing is being carefully re-evaluated, leading to more frugal shopping behaviors.
Middle-income families, often considered the backbone of retail spending, are projected to decrease their spending by 9%. This group is experiencing the squeeze of rising living costs more acutely, which forces them to prioritize essential spending over discretionary purchases.
Early shopping and deal-hunting trends
On average, parents plan to spend $586 per child on back-to-school items in 2024, marking a slight decrease of $11 from the previous year. Reductions, though seemingly minor, are indicative of the broader cautiousness that defines this year’s shopping behavior.
Category-specific spending:
- Clothing and school supplies: Spending in these categories is expected to remain flat compared to 2023, as parents focus on essential purchases rather than splurging on new or premium items.
- Tech spending: A notable 11% decline in tech spending is projected, which aligns with a broader trend of tech saturation in households. Many families are likely delaying tech upgrades or purchases unless absolutely necessary, choosing instead to stretch the life of existing devices.
- Cautious consumer behavior: The cautious approach to spending is driving consumers to be more strategic in their purchasing decisions, with a heightened focus on deals and promotions.
- Early shopping trends: A significant 59% of shoppers believe that the best deals occur at the start of the season, leading to a shift in shopping behavior where consumers aim to complete their back-to-school purchases earlier.
- Budget allocation: By the end of July, two-thirds of parents’ budgets are expected to be spent, a notable increase from 59% in 2023. which suggests that consumers are seeking out early deals and are committing to their purchases sooner to avoid potential price increases later in the season.
How brands can capture hearts and wallets this season
In 2024, the influence of younger generations, particularly Gen Z and Gen Alpha, on back-to-school shopping decisions is more pronounced than ever. Tech-savvy and socially conscious cohorts are not passive observers but active participants in the shopping journey, driving significant shifts in brand consideration and purchase behavior.
61% of parents acknowledge that their children directly influence their spending decisions, a statistic that highlights the importance of targeting these younger demographics in marketing campaigns.
Brands that can effectively engage with these younger audiences early in the shopping process are more likely to be top of mind when purchase decisions are made.
Recognizing the influence of these younger consumers, brands like American Eagle and Urban Outfitters are doubling down on strategies that emphasize relatability and inclusivity.
American Eagle and Urban Outfitters are focusing on creating campaigns that resonate with the values and interests of Gen Z and Gen Alpha, such as diversity, self-expression, and social consciousness. When aligning their messaging with the identity and priorities of these younger shoppers, brands can foster stronger connections and drive higher engagement.
Blending value with emotional connections
In a year where every dollar counts, value remains a key driver for consumer decisions. Amazon exemplifies this with its back-to-school campaign featuring Michelle Buteau. Amazon’s campaign effectively combines value messaging with humor, offering consumers both financial relief and a moment of levity in an otherwise stressful time.
Amazon’s decision to use comedic elements is a strategic response to consumer desire for both affordability and light-hearted content, reflecting a keen understanding of current consumer sentiment.
Beyond just price, brands like Instacart are tapping into the emotional side of back-to-school shopping.
Instacart’s campaign focuses on the significance of family time, reminding parents of the importance of creating meaningful moments amid the chaos of the back-to-school season. It’s an approach that resonates on an emotional level and positions the brand as a partner in helping families navigate this busy period with ease and care.
Engaging multicultural audiences with inclusive marketing
Diverse Audience Engagement: With Gen Z and Gen Alpha being the most diverse generations to date, marketers are increasingly tailoring their campaigns to resonate with a wide range of cultural backgrounds. This is not just about checking boxes for diversity but about authentically engaging with audiences through relevant and meaningful content.
Understanding the distinct preferences and values of different cultural groups is essential for effective marketing.
- Hispanic parents: Research shows that Hispanic parents place a high value on nostalgia and word-of-mouth recommendations. Campaigns that tap into these elements are more likely to succeed in this demographic by evoking memories and fostering trust through community endorsements.
- Asian parents: For Asian parents, reputation and respect can be key drivers. Marketing strategies that highlight quality, reliability, and the positive reputation of a brand can resonate strongly with this audience, encouraging brand loyalty and repeat purchases.
- Influencer partnerships: When collaborating with influencers who embody the values and aesthetics of their target demographics, these brands create authentic connections that are more likely to drive engagement and sales. Immersive, experience-driven campaigns help with selling a product and creating a lifestyle that resonates with the consumer.
Tactics and trends shaping the shopping experience
The 2024 back-to-school season sees consumers gravitating toward retail formats that offer both value and convenience. With 77% of shoppers choosing mass merchants, these retailers are a key player in the market due to their ability to provide a wide range of products at competitive prices.
Online shopping continues to gain traction, with 65% of consumers planning to make purchases from online retailers. Such convenience of online shopping, combined with the ability to easily compare prices and find deals, makes this channel increasingly popular among time-strapped parents.
As shopping behavior evolves, the importance of a smooth and consistent experience across in-store and online channels is becoming increasingly apparent.
Consumers report higher loyalty to retailers that provide a consistent shopping experience, whether they are browsing online or in-store. It shows the need for retailers to invest in integrated systems and processes that give a smooth and cohesive customer journey across all touchpoints.
How Pacsun and American Eagle are leading the charge
Pacsun: The “Better in Baggy” campaign is a prime example of how retailers are blending digital and physical experiences to engage consumers.
Integrating QR codes on store windows helps Pacsun encourage customers to interact with its seasonal Pinterest board, creating a bridge between the in-store experience and online engagement..
American Eagle: Similarly, American Eagle is using in-store technology to create immersive experiences that resonate with its young, tech-savvy audience.
The fall campaign features custom videos projected onto store walls, inviting customers to become part of the campaign. Interactive approaches draw customers into the store and creates a sense of community and participation, making the shopping experience more engaging and memorable.
Opportunities and obstacles
In a season where value takes precedence, 67% of parents are willing to switch brands if their preferred option becomes too expensive. Brands that can offer compelling value propositions without compromising on quality or experience are well-positioned to capture market share.
However, this also means that traditional brand loyalty is being disrupted, as consumers become more price-sensitive and open to exploring alternatives.
Despite the challenges, loyal back-to-school shoppers are a valuable segment, spending 35% more on average. It shows the importance of nurturing loyalty through programs and incentives that offer real value to consumers.
Brands that invest in comprehensive loyalty programs with meaningful rewards can retain their existing customer base and attract new shoppers who are looking for additional benefits and savings during a tight budget season.
The ability to quickly adapt to changing market conditions and consumer preferences is key for success in the 2024 back-to-school season.
Brands need to strike a balance between delivering value-driven messaging and maintaining an emotional connection with consumers. It requires a keen understanding of market dynamics and the flexibility to adjust strategies as needed, making sure that they remain relevant and competitive throughout the season.
Investing in the future of shopper influence
As consumer behavior continues to evolve, retail media is emerging as a key area of focus for marketers. With the rise of digital platforms and the increasing complexity of the shopper journey, investing in retail media offers brands a way to more effectively reach and influence consumers at various touchpoints.
When using data and insights from retail partners, brands can create more targeted and personalized advertising campaigns that resonate with specific segments of their audience. It will improve the efficiency of marketing spend and better the overall shopping experience by delivering relevant content to consumers.
The key takeaways, flexibility and speed in an uncertain season
In a season marked by economic uncertainty and shifting consumer behavior, the ability to pivot quickly and respond to changing conditions is key. Marketers must be prepared to adjust their strategies in real-time, whether it’s shifting focus to value-driven messaging, improving digital experiences, or responding to new trends and consumer sentiments.
The success of brands in the 2024 back-to-school season will depend on their ability to stay agile and responsive. It means closely monitoring market trends, being open to experimentation, and having the systems and processes in place to implement changes swiftly and effectively.
