Retailers and other marketers are leaning heavily on value messages this back-to-school season, as U.S. households navigate budget pressures due to the effect of trade tariffs and rising prices.
Consumers are “responding to a lot of unknowns,” said Katherine Cullen, VP of industry and consumer insights of the National Retail Federation. The trade group’s annual survey estimates consumers will spend $128.2 billion shopping for students in nursery school through college, that’s 2% more than last year, in spite of growing worries about the economy and rising prices.
“It appears that consumers are still turning up,” said Mark Mathews, the NRF’s chief economist. The survey found 51% of households are shopping earlier because of fear that import tariffs touted by the administration will turn into higher prices. “They are thinking about it,” said Mathews.
The net effect of trade tariffs is still not fully realized, but prices are expected to increase for most common items on shopping lists. A Harris Poll found a quarter of parents surveyed had bought tech items earlier in the summer to avoid rising prices due to tariffs.
“Consumers are being very cautious about electronics,” one of the shopping categories expected to be most impacted by tariffs, said Cullen. It is the product category where consumers are pulling back the most, according to the NRF survey. Parents are putting off buying peripherals and accessories and repurposing old gear, she said.
Spending is refocused on more essential items, said Cullen. She noted in the big-ticket college segment, there has been a noticeable shift in focus to food, clothing and gift cards as households rationalize spending. “These are things people have to buy and they are prioritizing that,” she said.
More than half the parents in a recent poll said they were concerned about higher prices on back to school items, and expect to spend more. The survey from Deloitte Consulting found they plan to cut back on other household spending to make room for back to school shopping, which will increase to $570 per student this year. But they are tailoring their selections to their budgets: 75% say they will shift brands if their preferred brand is too expensive and a rising number are willing to shop at a more affordable retailer.
Cullen noted the NRF survey also found consumers are trading down brands, shopping store brands and discounts to save money, especially in the college-bound segment.
“Consumers are rethinking what’s essential, even for back to school,” she said.
Shopping harder for discounts
As households react to budget concerns with a tighter purse, marketers are obliging them. They are promoting low prices and special deals to entice wary shoppers in what is annually the second most important period to the retail sector, after the holiday shopping season.
“Retailers are doing everything possible to keep pricing as low as possible, but it becomes more of a challenge as we move forward in time,” said Matthews.
Retailer Kohl’s, for example, announced a focus on staples under $10 for back to school. “We know value is top of mind for families as they prepare to head back to class this year,” said Kohl’s CMO Christie Raymond, in the announcement.
Rival Target put a special focus on its annual Target Circle Days in July, offering extra savings to members of its loyalty program on school staples, and discounts on the membership fee for teachers and students who signed up during the event. “Target Circle Week is one of the biggest savings events of the summer, and it’s all about helping our guests get more of what they love for less,” said Cara Sylvester, executive vice president and chief guest experience officer at Target. Indeed, 82% of households in the NRF survey said they expected to use July sales to save on their back-to-school shopping.
Walmart’s own survey found 70% of its shoppers are looking for discounts on back-to-school shopping this year, so the retailer launched a series of offers including a new line of affordably-priced clothing for middle schoolers, school supplies priced as low as 25 cents and enhancements in its Classroom Registry web page for teachers.
“We understand how important it is for families and teachers to save time and money when preparing for the school year,” said Denise Incandela, EVP, Fashion, Walmart U.S. “As the go-to destination for back-to-school shopping, we’re proud to offer another year of incredible value.”
The office-goods retailers—another popular destination for shopping parents and teachers—are also targeting cost-conscious shoppers. Office Depot launched a Back-to-School Showcase section on its website with hundreds of school staples priced under $3, supply lists for parents and wish lists for teachers.
“Supporting our customers, especially teachers, is a commitment we carry throughout the year,” said Office Depot president Kevin Moffitt, in a statement. “As teachers, parents, and students prepare for the school year, we are proud to be their trusted partner.”
Rival Staples also launched special offers, as well as an extra discount for teachers, and extra points on its Easy Rewards loyalty program for back-to-school shoppers. “We know families and teachers want both great value and convenience when preparing for the school year,” said Marshall Warkentin, President, U.S. Retail.
Social media influences back-to-school purchases
While most back to school shopping is still done in-store, digital channels are increasingly a factor, as households seek out the best deals to save time and money. Younger households, especially young Millennial and Gen Z parents, are increasingly shopping online and seeking advice and deals on social media platforms.
Deloitte’s study found 75% of Gen Z parents and 46% of Millennials plan to use social media for their back-to-school shopping; half of Gen Z shoppers plan to use social platforms to look for deals, compared to 21% of the total population.
“Gen Z parents (are) embracing social commerce, digital platforms, and AI at a higher rate as they hone their value-seeking strategies,” wrote Brian McCarthy, Deloitte Consulting principal, Retail Strategy.
Parents are using those channels partly to seek out deals, but also to find advice to prioritize purchases. They are having conversations on social media, looking for recommendations on long-wear staples such as backpacks, timeless classics and specific brands trending, “things you can’t go wrong with,” the NRF’s Mathews said.
They are also tracking down items early, before they sell out, as they worry about inventory shortages caused by tariff anxiety, said Mathews. “It’s more of a supply chain issue,” he said.
Retailers of all stripes are also leaning heavily into social media this season. Dollar General is offering extra discounts to teachers and running a social media sweepstakes for educators on its Instagram page. Supermarket chain Meijer brought back its digital supply list for parents with school staples under $1, as well as discounts for teachers. Fashion retailer Urban Outfitters teamed up with the HGTV home décor channel to give away a dorm room makeover for college students via social media platforms.
In spite of all the anxiety of tariffs and prices, or any supply chain issues, the NRF is still forecasting retailers will have more to do before the season is over.
“We’ve seen retailers prepping for this,” said Mathews. “Retailers have stock.” He noted many merchants stocked up as the tariffs loomed, in order to have enough inventory to be in a good position and be prepared to run sales.
“It’s been a pretty solid season so far,” he said. “Consumers are still finding the fun in back to school.”
