Back-to-School Shoppers Do Their Homework in an Attempt to Outsmart Inflation According to New Deloitte SurveyDOWNLOAD
Nearly nine out of 10 consumers plan to maintain or increase spending; shoppers confront rising prices with smartphones, social networks
NEW YORK, July 27, 2011 — Despite a volatile economy and rising costs for everyday necessities, consumers plan to keep their back-to-school spending intact by turning to savvy shopping tactics, smartphones and social networks, according to a new Deloitte survey.
While 86 percent of households surveyed expect to spend the same or more on back-to-school items this year, inflation-related concerns could cause them to change their shopping plans. Seven out of 10 respondents cite higher food prices (72 percent) and higher energy prices (70 percent) as reasons they may scale back spending this season, followed by roughly half (51 percent) who point to the lack of improvement in the job market.
The study also indicates consumers will be vigilant about the cost of the items they plan to purchase. Three out of 10 (29 percent) consumers believe prices on new back-to-school merchandise are higher than a year ago and nearly two-thirds (65 percent) say low prices are the most important retailer attribute for back-to-school shopping.
“Retailers need to be prepared for a consumer who is sensitive to prices, especially with the pinch households are feeling from higher gas and energy costs this summer,” said Alison Paul, vice chairman, Deloitte LLP and Deloitte’s retail & distribution sector leader. “Retailers should monitor customers’ reactions closely to recognize where they are flexible, and where promotions are necessary to drive traffic and generate purchases of higher margin products in the store.”
Many consumers will use their smartphones to enhance their shopping overall, but specifically to find the best price, locate promotions and discounts and track down the items they want to buy.
Among those surveyed who own Web-enabled smartphones, nearly two-thirds (64 percent) plan to use them for back-to-school shopping purposes, while three out of five (61 percent) will use them to get price information. More than two out of five (43 percent) will download discounts, coupons or sale information to their smartphones.
Social networks will play a greater role in back-to-school shopping this year, according to the survey. More than one-third (35 percent) of parents plan to use social networking sites to assist in their back-to-school shopping, up from 29 percent last year. Among these respondents, nearly seven out of 10 (69 percent) plan to do so to find out about promotions. Additionally, 44 percent plan to visit social networking sites to browse products and 28 percent to read reviews and recommendations.
“Price-conscious and/or time-constrained, consumers are navigating virtual and physical storefronts to get the information they want quickly and easily,” said Paul. “Retailers need to respond with an integrated experience. In short, they must unite the store with their online and mobile channels to enable consumers to easily access product availability, promotions and information. Retailers can also increase personalization through digital touch points. One example of this is to create targeted mobile advertisements that engage parents and students with advice and merchandise specifically relevant to their shopping preferences to help retailers increase engagement, conversion and loyalty this season.”
Consumers indicated they are likely to change the way they shop to stretch their back-to-school dollars further this year. More than half (55 percent) say they will buy only what the family needs and more than one-quarter (26 percent) will reuse last year’s items due to concerns about the economy or their finances. Nearly three out of 10 (28 percent) will consolidate trips to save on gas.
However, some consumers earning higher incomes show more confidence in their own finances and are less inclined to alter their back to school shopping this season. Eight out of 10 (82 percent) among respondents earning $100,000 or more say their financial situation is the same or better than last year, compared with two-thirds (66 percent) of respondents earning less than $100,000. Less than one-third (31 percent) of individuals in the $100,000 and higher income bracket say they are likely to purchase more lower-priced items due to economic concerns, compared with more than half (51 percent) of those with household incomes under $100,000.
The survey was commissioned by Deloitte and conducted online by an independent research company between July 5 and 11, 2011. The survey polled 1,000 parents of school-age children in grades K – 12, and has a margin of error for the entire sample of plus or minus three percentage points.
For more information about Deloitte’s retail & distribution sector, please visit www.deloitte.com/us/retail-distribution
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