Despite uncertainties about how the school year will start this fall due to COVID disruptions, consumers expect to spend a record amount to prepare. That’s the upshot of the National Retail Federation’s Annual 2020 Back-to-School/Spending Survey out just last week. Here are the highlights:
- K-12 Spend: Parents with kids in elementary school through high school plan to spend an average of $789.50 per family, besting 2019’s record of $696.70 by 13.3%.
Spending is expected to total $33.9 billion compared to $26.2 billion last year and above the record of $30.3 billion in 2012.
- College Spend: College students and their parents plan to spend an average of $1,059.20 per family, 8.4% more than last year’s record of $976.78.
Total college spending is forecast to be $67.7 billion, exceeding last year’s $54.5 billion and 2018’s record of $55.3 billion.
- Total Spend: Aggregate spending for both K-12 and college is forecast to top $100 billion for the first time, or $101.6 billion more precisely, compared to $80.7 billion in 2019.
- Shopping To-Date: “Consumers surveyed had finished only 17% of their shopping on average by early July… 54% said it was because they did not yet know what they will need.”
- School Expectations: Over half (55%) of consumers expect both K-12 and college students to take at least some of their classes at home in the fall, while just over a quarter (26%) think most or all classes will take place in-person.
“63% of K-12 families expect to buy computers and other electronics this year, up from 54% last year, and they expect to spend more at an average $274.44, up from $203.44 last year.”
“Among college shoppers, 60% plan to buy electronics, up from 53% last year, and they expect to spend more at an average $261.52, up from $234.69.”
Bottom line: parents remain unsure about if their kids will take school in-person, virtually or both whether they are in K-12 or college. A look at Google Trends searches for “school supplies” reflects these unknowns:
Queries for “school supplies” are off about 70% from normal levels at this point in the summer compared to its 5-year history. The NRF said most respondents expect to receive school lists by the end of this month or next, so that should help but could also meaningfully impact back-to-school spend depending on various schools’ reopening plans.
Either way, the NRF survey showed parents and students clearly want to be prepared with laptops and electronic accessories, such as printers, speakers/headphones, flash drives and mouses, etc. A 1-year chart of Google searches for “macbook” and “hp” shows this demand:
Searches for these popular laptop makers started to rise after shutdowns happened in mid-March as consumers slowly adapted to the “new normal” of “work from home” and “school from home”. Queries for both are on the rise again and experiencing a second wave as families get ready for school to start in some form in the fall. What’s impressive is that searches topped those during the week of Black Friday – typically the biggest time of year for electronic purchases – after shutdowns and are now either matching or besting those levels again. No doubt they could easily make a new high in the coming weeks.
Some reasons for this: even if certain schools go back to in-person teaching, the chances of more lockdowns amid virus flareups will remain high. Moreover, many parents struggled juggling working themselves and virtual school for their kids this past spring having only so many devices at home. Making household environments more conducive to both virtual work and school with plenty of tech hardware and accessories on hand is clearly a priority, at least until there is a vaccine.
The upshot: US households are going through their largest and quickest hardware upgrade cycle ever, first after lockdowns and now as families get ready for back to school and work in the fall. If you’re wondering how tech can continue to rally after such impressive gains, this is one major driver. It’s no coincidence that the stocks of Best Buy and Apple are near all-time highs.