Some level of back-to-school spending is to be expected every year, but how much consumers are spending and what they choose to buy shifts given the economic conditions. Looking at de-identified Yodlee spend data, we’ve found some consumer back-to-school spending trends that may help retailers and manufacturers uncover new opportunities.
Back-to-school purchases shift from clothing to essentials
The growth in early back-to-school shopping this year, specifically within apparel, office supplies, and arts/hobby channels, is slower than 2021 when compared with pre-pandemic year 2019.
Last year the clothing industry saw a sizeable uptick as schools and offices reopened after a year or more of closure. In contrast, 2022 data suggests consumers this year are focusing on the essentials, with only supermarkets, mass merchants, and wholesale stores witnessing similar growth in 2022 as in 2021 vs 2019.
Apparel’s share of wallet dropped by 2% in July 2022 vs 20211
Consumer spending further supports this shift as apparel’s share of wallet dropped a significant 2% in July, compared with the last two years, while other spending categories held steadier.
Inflation seems to be driving bulk purchases and essentials
In 2021, consumers spent more than in 2019 virtually across the board:
- 33% more spending with mass merchants like Target or Walmart
- 31% more with wholesale stores like Sam’s Club or Costco
- 22% more in Arts and Crafts stores like Michaels
Moving into 2022, compared to 2021, behavior looks quite different. Consumers spent:
- 3% more at wholesale stores
- 3% less at mass merchants
- 1% less at supermarkets and grocery stores
This suggests that inflationary pressure is affecting how consumers make buying decisions. They are examining their budgets and turning to bulk buying for the lowest cost per item. It is important to note that we compare 2021 against 2019 because 2020 is considered to be an exceptional year, out of the normal range of consumer behavior.
Consumers love Amazon and wholesale for back-to-school2
Amazon, Sam’s Club, and BJ’s Wholesale Club were clearly the most popular of the traditional back-to-school (BTS) retailers, further supporting this continued shift to bulk buying. We define the back-to-school shopper as consumers who made a purchase with any of these retailers during July 2019—Sep 2019 and also have at least one child at home (as they received child tax credit in July 2021).
Walmart shoppers were the most loyal
Comparing 2021 purchases to 2022 purchases, Walmart shoppers were the most likely to repeat their retailer preference during this year’s back-to-school shopping season.
Consumers with children focused on necessities for back-to-school 2022
Shoppers who received a child tax credit in July 2021 focused their July 2022 shopping on bulk purchases and food, spending less at department stores and retailers that primarily sell apparel, books, and/or arts and crafts. While this could be partly because they spent so much on those items last year, the shift could also be one more example of consumers reacting to inflationary pressure.
Now that the back-to-school shopping season is almost over, retailers and brands will turn their eye to holiday consumer spending, which could also be affected by the same factors that influenced consumer spending this summer. An awareness of consumer spending habits empowers decision makers to uncover trends early, identify business drivers and blind spots and spot opportunities. Learn more about how consumer insights may help your business here.
About Envestnet | Yodlee Merchant, Retail, Shopper, and Spend Insights
Envestnet® | Yodlee® Merchant, Retail, Shopper and Spend Insights utilize de-identified transaction data from a diverse and dynamic set of data from millions of accounts to identify patterns and context to inform spending and income trends. The trends reflect analysis and insights from the Envestnet | Yodlee data analysis team. By combining data with intelligence – connecting vast amounts of actual de-identified shopping data with state-of-the-art analytics and machine learning – Envestnet | Yodlee provides visibility into an entire set of shopping daily purchase behavior including, but not limited to, transactions, customer lifetime values, and merchant/retailer shares.
To learn more about Envestnet | Yodlee Merchant and Retail Insights and get a free demo, please contact an Envestnet | Yodlee sales representative or visit https://www.yodlee.com/data-analytics/corporate-data
- Mass Merchants include Walmart and Target. Others include craft supplies, office supplies, and bookstores.
- Office Depot is Office Depot +Office Max combined