More Shoppers to Delay Their Back-To-School Spending
Retailers will be biting their nails this back-to-school shopping season as consumers are expected to put off purchases until nearly the last minute, according to a new report.
According to a study of consumer purchasing plans conducted by market researcher NPD Group, the majority of shoppers are planning to spend about the same as they did last year on their back-to-school shopping.
About 40 percent of consumers said they plan to spend the same amount, 38 percent expect to spend less, and 22 percent said they would spend more, NPD said. That's the same breakdown that occured in last year's NPD survey.
The study also asked consumers when they would begin their shopping. About 60 percent said they would start by Sept. 1, about 35 percent said they would start by Aug. 1, and the remaining 5 percent said they wouldn't start until after Sept. 1.
This is an acceleration of the number of consumers who are putting off their shopping until closer to the start of school.
"The consumer is holding on, but it is an indication that consumers remain cautious about their spending," said Marshal Cohen, chief industry analyst at NPD.
There can be a number of reasons consumers will wait to buy. Sometimes, it is as simple as a child wanting to wait to until they go back to school and see what their friends are wearing.
But other times, it speaks to a need to put off a purchase until money is saved or until it is needed. Some consumers also expect they will get a better deal the longer they wait.
Since the majority of the 12,000 consumers surveyed between July 1 and July 14 by NPD expect spending to be the same or lower, it is more pessimistic than an earlier back-to-school forecast from Customer Growth Partners, which estimated back-to-school spending would rise 6.2 percent this year.
Adding to the study's cautious tone was NPD's finding that the vast majority—some 82 percent—of consumers said "value" would be the trait most likely to determine which items they buy for back to school.
That's more than last year, when about 79 percent of consumers said value would guide the purchase decisions.
"Here we have a clear sign that 'trendy and fashionable' or 'influenced by friends' is shrinking and 'value' is gaining momentum," Cohen said.
According to Cohen, what consumers mean when they say "value" has been evolving. But he said most consider it to be a combination of price, quality and the name brands they trust.
Still, the biggest shift is not in what consumers plan to buy or what they plan to spend, but when they will do it and what will drive them to the cash register.
Pricegrabber, an online shopping site owned by Experian, surveyed more than 2,600 visitors to its Website in mid-May and found that those visitors expected to spend slightly less than they did last year.
The Pricegrabber poll showed more shoppers would be doing price comparison and hunting for coupons than they did last year.
The poll also showed fewer shoppers would be looking to buy a laptop or a cell phone. Instead, the number of shoppers looking to buy a tablet grew.
But even that purchase has a value component. "The tablet computer has come a long way since the debut of the iPad just over a year ago," Graham Jones, general manager of PriceGrabber. He said, many consumers are looking to tablets as a less expensive alternative to purchasing a laptop or upgrading to a smartphone.