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Back-to-School 2008: Challenging Times
The economy’s slump has manufacturers and retailers who rely on a back-to-school bump in business wondering about consumers’ spending intentions as fall approaches. Our Annual Back-to-School Survey results are in, and consumers tell us they plan to cut back their spending across almost all categories.
| Back To School Spending Intentions | 2008 | 2007 |
| Plan to Spend Less? | 35% | 25% |
| Plan to Spend the Same? | 34% | 39% |
| Plan to Spend More? | 31% | 36% |
Source: The NPD Group/Annual Back-to-School Survey, 2008
While consumers are displaying signs of cutting back, there is very little to indicate they will change where they plan to shop. “The most vulnerable channels of distribution are the apparel and footwear stores,” said NPD Chief Industry Analyst Marshal Cohen. “Even the discounters will have to work hard to lure customers in to shop. These retailers should expect to see more and more competition from ‘non-traditional’ rivals like office supply stores.”
| Where Are You Likely To Shop For Back-To-School? | 2008 | 2007 |
| Discounters | 81% | 84% |
| Office Supply | 45% | 43% |
| Dept. Stores | 25% | 26% |
| Footwear | 22% | 27% |
| Internet | 18% | 18% |
| Electronic | 16% | 16% |
| Apparel | 16% | 20% |
| Warehouse Club | 12% | 11% |
| National Chains | 12% | 14% |
| Grocery Stores | 12% | 14% |
| Drug | 12% | 12% |
| Factory Outlet | 6% | 7% |
| Catalog/Direct Mail | 5% | 5% |
| Sporting Goods | 4% | 5% |
| Photo Supply | 1% | 1% |
Source: The NPD Group/Annual Back-to-School Survey, 2008
The survey shows there is no change in consumers’ intentions when it comes to shopping for electronics. “Electronics are no longer seen as luxury items but as ‘must–have’ items for students,” noted Cohen.
When consumers were asked which items they either have purchased or plan to purchase for this year’s back-to-school season, school supplies took the number one spot again this year. In the year-over-year results, here again, there are signs that consumers intend to cut back in almost every category.
| Category Spending (in Dollar Order) | 2008 | 2007 |
| School Supplies | 78% | 83% |
| Apparel | 60% | 66% |
| Footwear | 48% | 55% |
| Electronics | 34% | 38% |
| School Bags | 33% | 45% |
| Accessories | 20% | 25% |
| Beauty Products | 17% | 20% |
| Personal Computers | 13% | 13% |
| Bedding | 13% | 13% |
| Furniture | 9% | 10% |
| Small Appliances | 7% | 7% |
| Cell Phones | 7% | 8% |
| Movies/DVDs | 7% | 8% |
| Printers | 6% | 7% |
| Digital Cameras | 5% | 6% |
| Large Appliances | 4% | 4% |
| Music | 4% | 6% |
| Sports Equipment | 4% | 5% |
| Calculators | 4% | 14% |
| MP3s | 3% | 4% |
| Video Games | 3% | 3% |
Source: The NPD Group/Annual Back-to-School Survey, 2008
Analyzing these results, Cohen noted, “School bags are the most vulnerable of the big spending categories for back-to-school; parents seem to think they will be reusing the bag from last year. This is a purchase that parents feel can wait until it’s completely worn out, rather than having to get new one just for the sake of having a new one.”
What about the traditional back-to-school wardrobe purchases? "The footwear industry has a way to go to convince parents they need to spend for back-to-school, and apparel is right behind. Twenty-four percent fewer consumers expect to spend on footwear this year compared to last;consumers say they will spend 10% less this year on apparel," said Cohen.
Additionally, consumers were asked what motivates their back-to-school purchases. They said their top reason for purchasing an item is “value” followed by the item is “required.”
| Why will you purchase? | 2008 | 2007 |
| Value | 80% | 81% |
| Required | 51% | 56% |
| Replacement | 30% | 30% |
| Child Wanted It | 21% | 26% |
| Trendy/Fashionable | 18% | 22% |
| Influenced By Friends | 4% | 4% |
Source: The NPD Group/Annual Back-to-School Survey, 2008
"As the back-to-school season progresses I think we will see that while parents’ early intentions are to cut back, in the end they won’t cut back on their kids all that much,” said Cohen.
Did you know NPD’s industry experts are available to discuss back-to-school sales strategies and survey results with your organization? Contact Charlie Camaroto at 866-444-1411 (contactnpd@npd.com) to learn more.