by   @mahoney_sarah
Source: www.mediapost.com, July 2024

Just as companies like Instacart, Target and JC Penney are announcing their back-to-school campaigns, Deloitte has some not-so-great news. The consulting company’s forecast predicts that parents — worried about family finances — are pulling back this year. It says spending will be $31.3 billion, or approximately $586 per student. That represents a decline of about 2% from last year’s $31.9 billion.

Consumers say they are sifting through prices and priorities. Clothing, as always, gets the biggest bite of BTS budgets and is expected to be flat at $12.6 billion. Tech comes next, with spending expected to fall 11% to $8.6 billion. School supplies are also expected to be flat at $7.4 billion. What is up, though, is spending in the “other” category, expected to jump 22% to $2.2 billion. That category is a catchall for purchases like furniture and personal hygiene.

Those expenses are in addition to the money 86% of families intend to lay out for extracurricular activities. This year, that expense is $582, including fees and equipment.

Parents are looking for bargains everywhere, with mass merchants being the overwhelming favorite at 77%, followed by 65% who will shop online. And 48% intend to shop on Amazon Prime Day. On average, parents plan to visit 4.7 retail formats, up from 3.9 in 2023.

They also feel more efficient, saying they intend to finish at least two-thirds of BTS shopping by the end of July.

“We expect back-to-school spending to be flat to down modestly when adjusted for inflation, mainly driven by middle-income families juggling financial priorities and ongoing inflation perceptions,” says Stephen Rogers, managing director, Deloitte Insights Consumer Industry Center, in a release. “Retailers can expect headwinds to volume and loyalty as consumers seek to save money. However… retailers will likely have opportunities to harness the indulgences parents are willing to make [to please their kids.]”

That means brands and retailers will be fighting extra hard this year, already launching ads that appeal to every flavor of parents. Target has those bargain hunters in its sights, with BTS and back-to-college promotions that include a basket of 20 must-have supplies, like glue, notebooks and colored pencils, for under $20. It also has a $5 backpack, which is the lowest price in over 10 years.

The Minneapolis-based retailer is also offering deals on subscriptions for Target Circle 360, including $5 per month for verified college students, $11 per month for all consumers, and a limited promotion for teachers, who can buy the annual subscription for $49 for the first year. The company is also extending previous discounts that have won fans over, including a one-time 20% off college student appreciation discount and a one-time 20% discount for teachers.

JCPenney is also targeting frugal parents, including a Black Friday in July event, with thousands of clothing items priced at $20 or less. The Plano, Texas-based department store chain also has a Super Saturday event in early August and Power Penney days scheduled for later in the month. Members of its loyalty program also get a free photo session and digital image at JCPenney Portraits by Lifetouch.

Other brands are skipping the saving message and going straight for the schmaltz. Instacart just debuted a back-to-school effort showing parents making time for the milestones that really matter, like teaching kids to tie their shoes or shave their legs.

The ads, created in-house, are running on linear TV, OTT, and YouTube, as well as on NBCU’s Summer Olympics portfolio – the brand’s first appearance during the Games. Instacart is also partnering with 11 CPG brands, including PepsiCo, J.M. Smucker, Mondelez and SC Johnson.