Welcome to the second biggest shopping season of the year: It’s Back-to-School season and it’s promising to be a good one. According to a survey conducted by Synchrony Financial of parents of K-12 students, parents of college students, and college students themselves, parents are pretty upbeat about the economy and their own financial situation this year. More than half (53 percent) of parents of K-12 kids expect to spend more this year than last year.
This is good news, and is driving an expected increase of back-to-school spending between 3.7 percent and 4.1 percent (This growth forecast for the three-month Back-to-School shopping period of July-Sept. 2017 is based on analysis of macroeconomic variables and trends).
What is driving this increase? One reason could be that parents of K-12 kids are feeling confident about their jobs and pretty good about their financial situation. Sixty three percent of parents say their financial situation has improved this year, and three quarters feel confident about their jobs. That’s a 10 point jump from last year, when only 53 percent of parents felt this level of confidence.
So, parents are feeling like they can spend more on deserving offspring who have done Vulcan mind-melds with the pool and video games over the long summer. What will they spend money on? Clothing is the number one item. Kids tend to grow, and clothes that fit them last year won’t work — and older siblings’ clothes only go so far. Ninety-four percent of parents of K-12 youngsters are expecting to spend money on everyday clothes, totaling about $183 on average.
But that’s not the big growth item. The biggest growth category is electronics. Forty-five percent of parents are expecting to spend more money than last year on computers and electronics. Also, 46 percent of them say the supply list from schools have gone up, leading to spending more on notebooks, markers and other supplies.
How about parents of college kids and college kids themselves? They are not as optimistic about the economy and their own financial situations because, well, they’re paying for college. That takes quite a bite out of the family nest egg. Only 40 percent of college students say they feel confident about their overall financial situation, and only 15 percent are confident in the strength of the economy. That does put a damper on spending on discretionary items.
But, at least they’re done growing, right? No need to spend a ton of money on clothes and shoes, but college kids and their parents are spending a good amount of money on other items. The data shows that parents of college age students spend about $205 on average on electronics, but less on clothing and shoes for back-to-school. Forty-five percent of college parents are expecting to spend more on computers than last year, similar to K-12 parents.
So, when is all this spending happening? If you think college students procrastinate in shopping, similar to how they do their college papers, you would be absolutely right. About 70 percent of parents of kids K-12 are done spending by the end of July. But half of college students don’t start until after August. Almost 30 percent of them wait until after Aug. 15. Hey, at least it gets done, right?
Will this level of confidence and spend extend to the holiday season as well? It’s too early to tell at this point, but this is a beacon of hope, in a sea of bleak news in the current retail marketing landscape.
Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial. All references to consumers and population refer to the survey respondents.