6 Retail ecommerce Trends for Back to School 2022

    August 18, 2022

    The state of consumer spending for back-to-school shopping is once again proving to be unique in 2022, distinct from either of the last two years. 2022 will mark the first year many students return to school in a largely post-COVID environment. Mask mandates have lifted and hybrid learning is mostly an artifact of the past. Meanwhile, current ecommerce trends are caught between the twin threats of prolonged inflation and imminent recession, even as retail and consumer spending continues to grow. This makes it difficult to establish a baseline for consumer shopper behavior. 

    The situation is no more stable on the retailer and brand side. Vendor margins are increasingly squeezed by rising costs and retailers refusing price increases to maintain their value proposition to shoppers. ‘Profitability,’ not ‘growth’ is the buzzword of the day. According to Mastercard Spending Pulse, ecommerce account managers are contending with the fact that in-store growth is outpacing ecommerce. These factors have reached a confluence to contribute to the unique state we see today.

    Figure 1: In-store back-to-school spending expected to outperform ecommerce

    Mastercard forecasts back to school sales will grow faster online than in-store

    Source: Mastercard Spending Pulse

    At CommerceIQ, we’ve gathered the results of some of the industry’s top back-to-school surveys to distill 6 trends we’re seeing this season.

    Consumer Shopping Behavior Marked by Fear and Uncertainty

    Shoppers are not optimistic about the future. Although they are worried about their personal financial circumstances, they are especially nervous about the future state of the economy. According to Deloitte’s 2022 back-to-school survey, the number of shoppers who expect the economy to weaken in the next six months jumped from 28% to 54% between 2021 and now. Almost one-third of shoppers expect their personal finances to deteriorate. Notably, shoppers’ feelings about the economy have worsened far faster than the decline of their assessment of their personal finances. There is a broader sense of doom in 2022 that extends beyond shoppers’ personal circumstances.

    Figure 2: Shoppers are pessimistic about the future state of the economy and their finances

    Shoppers feel worse about their personal economic circumstances and the economy in 2022 vs. last year

    Source: Deloitte back-to-school survey 2022

    Consumer Spending Soars Higher for Back-to-School 2022

    Despite this fear and uncertainty, many projections show back-to-school spending rising in total vs. last year. Deloitte estimates that per-household, back-to-school spending will rise 8%, while total spending on the season will rise 5.8%. However, shoppers aren’t gladly opening their wallets as inflation is driving the bulk of the increase. 

    For most parents, back-to-school shopping is a necessity. Few parents are willing to send their children to school without at least the essentials. Instead, they must find the means to purchase the items that their children need for the coming school year. Shoppers are likely redirecting dollars away from other areas of their budget to afford the higher back-to-school price tag. Some are going into debt to ensure that their child has what they need.

    Finally, some children might need more supplies than normal since it could be the first time they are returning to the classroom full-time without hybrid learning. If parents economized last year, they may be less able to do so again in 2022.

    Figure 3: Factors weighing for and against back-to-school spending growth

    Different factors causing upward or downward pressure on back to school sales growth in 2022

    Figure 4: 5.8% rise in total back-to-school spending forecasted

    Deloitte forecasts back to school sales will grow 8%

    Source: Deloitte back-to-school survey 2022

    Consumer Spending Diverges by Category

    Not every category is growing equally. The National Retail Federation forecasts that electronics will decline 1 to 2%, while clothing will grow 4% for back to school, and 6% for back to college. These trends are influenced by the surge in home and electronics shopping that occurred in 2021, which has deflated demand for those categories now. We are essentially witnessing a rebound effect similar to the drop in ecommerce sales and rise in in-store shopping, which is likely to be a one-off event. 

    Apparel and furnishings are still expected to grow as parents and students need appropriate attire for the school year. All else being equal, expect electronics to resume a more standard growth trajectory next year when year-over-year comparisons are not as biased.

    Figure 5: Category growth varies widely

    NRF forecasts electronics sales to decline for back to school season while clothes and home furnishings will grow

    Source: NRF and Prosper Insights & Analytics

    Shopper Behavior Defined by Deal Seeking

    Concerned about rising prices, shoppers are hunting for deals with renewed energy once again. Numerator’s back-to-school survey revealed that 74% of shoppers planned to buy items on sale due to high inflation. Beyond buying items on sale, cost-saving strategies such as buying fewer items or reusing old supplies were more prevalent when compared to earlier in the year. 

    Figure 6: Shoppers are engaged in cost-cutting and deal-seeking behavior

    Shoppers are looking for more deals this back to school season than they were last year

    Source: Numerator back to school survey 2022

    Our own Prime Day coverage revealed that, in contrast to Prime Day in 2020 and 2021, discounting was used extensively to boost shopper engagement, Glance Views, and OPS. The shift was successful as brands experienced a greater average sales lift than what they saw one year prior. This trend could continue for back-to-school shopping at other retailers. Furthermore, the hunt for deals has led to the development of two other trends.

    How Long is the Back-to-School Shopping Season?

    The timing of back-to-school shopping at large is ill-defined, and this is especially true in 2022. According to the NRF,  an ever-higher percentage of shoppers have started their back-to-school shopping by early July each year since 2019. At the same time, Deloitte notes that fewer shoppers will have had the bulk of their 2022 back-to-school shopping complete by the end of July, when compared to last year.

    Although these observations may seem contradictory, they actually reveal that the traditional back-to-school shopping time period is expanding both earlier and later than occured before. Shoppers are simultaneously starting their shopping earlier to find good deals whenever they occur, while also holding off on the remaining bulk of their intended purchases for the same reason. Back-to-school shoppers are increasingly opportunistic with limited resources. 

    Figure 7: Back-to-school shopping starting earlier every year

    Back to school shopping is starting earlier in 2022 than in 2021

    Source: NRF and Prosper Insights & Analytics

    Figure 8: Shoppers are holding off on the bulk of their BTS purchases compared to 2021

    Shoppers are delaying the bulk of their back-to-school purchasing until later in the season

    Source: Deloitte 2022 back-to-school survey

    Shopper Loyalty is at a Low Point

    With persistently high inflation, economic uncertainty, and spending that’s been forced higher, it is no surprise that brand loyalty is slipping according to McKinsey. 2020 was already a low point, and shopper loyalty has only declined since then. Back-to-school shoppers will look for the best offer wherever they can find it.

    Dollar General and Walmart could benefit from shoppers trading down. Shoppers want cheaper price points. Alternative and private label brands could benefit more than name brands for the same reason. 

    Brands need to be laser-focused on price or risk losing to competitors. At the same time, brands can also insulate themselves from price wars with unique solutions that solve specific student, teacher, and parent needs. Relevance and price should take precedence over brand familiarity.

    Figure 9: Shoppers are increasingly disloyal to brands and retailers

    Shoppers are more disloyal now that at any point in the past two years

    Source: McKinsey COVID-19 US Consumer Pulse Survey

    Final Thoughts

    How are consumers shopping back to school in 2022? To summarize, shoppers are:

    • More worried and financially uncertain than last year
    • Being forced to spend more
    • Shopping only for what they need
    • Looking for discounts
    • Shopping both earlier and later in the season
    • Trading down or across both retailers and brands

    Brands face both a great opportunity and risk in the battle for market share. They must create urgency with varied sale events, optimize for relevance across retail media platforms, streamline routine tasks and processes to create cost savings to pass on to shoppers, and fight for every dollar of profit and revenue when negotiating with big players like Amazon and Walmart.

    Learn more about how you can understand the retail ecommerce landscape in Q3 2022 to align for success by attending our insights webinar on September 14. Register here

    Finally, check out the CommeceIQ blog next week when we review our own sales, inventory, discount, and retail media data to get a closer look at how back-to-school 2022 is unfolding vs. the past two years!

    Follow our CEO, Guru Hariharan, on LinkedIn for additional back-to-school insights.


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