This audio is auto-generated. Please let us know if you have feedback.

Inflation is a top concern for parents this back-to-school season, but signals are mixed on how big an impact this will have on purchasing decisions.  As a result, brands and retailers are focused on finding a message that promotes value without sacrificing sales.

The beginning of 2022 teased a sunnier outlook for this year’s back-to-school season following years of pandemic related challenges, but health stressors have been swapped for fears of a recession. Still, projected spending doesn’t reflect a hurting economy, with the market forecasted to hit $34.4 billion, 24% higher than pre-pandemic levels, according to Deloitte’s 2022 back-to-school survey.

Parents are expected to pay $661 per K-12 student this season, up 8% from a total of $612 a year prior. Further, 50% of parents admit they plan to splurge (down from 93% last year), per a 2022 NerdWallet study. But these seemingly bright spots come with a twist — 33% of consumers report their household incomes have worsened since last year, per Deloitte’s findings.

“There’s a lot of people complaining about inflation and a lot of consumers complaining about inflation, but they’re not changing their behavior for the most part, in spite of that inflation,” said Sucharita Kodali, vice president, principal analyst at research consultancy Forrester.

As a result of the economic uncertainty, a more-for-less attitude has been adopted as consumers reevaluate their relationships with companies they once considered tried and true, ready to be courted by another if it offers better value. Seventy-seven percent of consumers say they will switch brands if prices are too high or if the item is out of stock, according to the Deloitte survey.

Consumers are also on the hunt for good deals sooner, with 53% of K-12 spending expected to have occurred by the end of July.

“Inflation has impacted every aspect of back-to-school shopping this year, and most retailers’ strategies seem to reflect the influence of inflation on consumers’ ability to invest in school supplies and apparels,” said Dave Bruno, director, Retail Market Insights at retail technology company Aptos in an email.

E-commerce behemoth Amazon quickly saw an opportunity to swoop in with a back-to-school campaign featuring Kathryn Hahn. The 30-second spot urges parents to “go ahead and spend less” on back-to-school supplies as they try to keep up with ever-changing trends and needs. Following suit, Target has flexed hefty discounts this season and a store-wide sale similar to that of Prime Day, and also extended saving opportunities for teachers.

“Amazon’s Prime Days have become the unofficial starting point for the back-to-school shopping season, and despite what seemed like less advanced marketing and promotion from Amazon, they still generated around $12 billion in revenues during the event,” Bruno said. “Retailers that staged competing promotions during Prime Days were very focused on the discount message, with many advertising ‘Black Friday in July’ deals.”

The price for “normal” 

Spending in retail categories is expected to show kids are in need of apparel items, while having other areas, namely tech, more than covered. K-12 parents are predicted to spend increased amounts on clothing and accessories, up 18% year over year, and school supplies, up 7% alluding to the end of at-home learning, per Deloitte findings. At the same time, tech spending is projected to decline 8%, with 81% of parents saying those needs will be fulfilled by their child’s school.

“A significant part of school, especially for college, is electronics, and electronics have actually deflated,” Forrester’s Kodali said. “It’s one of the few categories where there’s deflation.” 

Some stores are pulling back on casual wear following a boom in athleisure, making clothing buys necessary for those desiring to freshen up their look. Retail behemoth Gap for the 2022 back-to-school season is promoting vintage looks, like loose denim, pocket tees and varsity jackets to allude to modern prep, Chief Marketing Officer Mary Alderete told sister publication Marketing Dive in July. 

Value isn’t just about the discount

As many brands frame their campaigns around inflation by offering discounts, other brands are looking to communicate value in less direct ways. L.L. Bean’s back-to-school campaign, “Dear L.L. Bean,” pushes for an emotional connection, retrieving a letter written in 2007 to the brand by a now 23-year old consumer inquiring about how to destroy the brand’s popular Book Pack bag so that her parents would buy her a new one. The 30-second commercial uses the letter as narration as it recreates the event, with the message that no matter what, the bag can’t be destroyed. 

Gap’s 2022 back-to-school campaign, “Everyone Belongs,” plays off a similar message, marketing “hand-me-down approved” items with a collection of clothing. In its 30-second national spot, kids share what it means to them to be different, pushing the brand’s long-adapted theme of inclusivity and “modern American optimism” throughline to relate to the numerous styles kids may take on.

Value to consumers may also mean an emphasis on more niche categories. Parents concerned with their child’s mental health are expected to spend 8% more than average this season, per Deloitte. Parents are also growing more concerned about sustainability — those that are will be expected to spend 22% more than average. The change of heart may allude to a shift in priorities brought about by the mental overload spurred by the pandemic.



Source link

Comments are closed.