This year's back-to-school season is bringing another wave of market volatility for marketers, requiring fresh energy to compete for what is expected to be more limited consumer spending. Whether they can focus on engaging the younger generation may be the key to a brand's success.

Spending this season is expected to decline slightly from 2023 levels, prompting brands to go all out to stand out during this critical sales period. For marketers like Amazon and JCPenney, this means doubling down on value; for brands like American Eagle and Urban Outfitters, it means marketing to Gen Z and other younger groups with messaging that conveys relatability and inclusivity.

"What we see with Gen Z and Gen Alpha is that their strong influence at the very beginning of the shopping journey doubles the number of parents who consider the brand," said Krithika Rosenthal, director of the strategy group at Wavemaker, part of GroupM. "So it's not just about influencing the parent, but also thinking about how to connect with the child."

According to Deloitte's annual survey, 61% of parent back-to-school shoppers admit that their children prompt them to spend more. Catering to the needs of the entire family could help marketers stay afloat in another difficult quarter. Spending is expected to fall to $31.3 billion this season, down from $31.9 billion in 2023. Although the decline is smaller than the previous season, financial concerns persist, with spending by middle- and low-income households expected to drop by 4% and 9%, respectively.

"Middle- and low-income groups are indeed squeezed by the rising cost of living," said Lupine Skelly, head of retail research at Deloitte. "These families say their spending on groceries and childcare has increased, so they have to cut back in other areas during the back-to-school season to maintain this level of spending."

The challenges of this back-to-school season go beyond engaging the younger generation, including balancing value and emotion in messaging, as well as reaching consumers across a broader range of shopping channels. Still, the outlook is not entirely bleak—this period is also full of opportunities, including a prime chance to build loyalty.

The 'new normal'

According to Deloitte, parents are expected to spend $586 per child on back-to-school supplies this season, just $11 less than the 2023 average. Spending on clothing and school supplies is expected to remain flat, while spending on technology is expected to decline by 11%, echoing broader industry trends. As frugality persists, value will remain key for marketers to win in a season characterized by being 'cautious and budget-conscious,' Skelly said. Consumers may now be accustomed to this.

"I think 'new normal' is a great term to describe these major shopping events," Skelly said. "These retailers have basically trained consumers to look for deals and promotions. People will load up their carts and wait for discounts before checking out."

In the hunt for deals, back-to-school shopping has started early, with 59% of shoppers believing that the best deals are available at the start of the season. Skelly said about two-thirds of the budget parents plan to spend is expected to be spent by the end of July, up from 59% in 2023 and 14 percentage points higher than two years ago. Promotional events like Amazon Prime Day are also growing in popularity, with 48% of shoppers purchasing back-to-school items during the e-commerce giant's sales event last month, up nearly 10% from the same period last year.

Beyond its latest Prime Day, which set sales records, Amazon has further solidified its value proposition with a recent back-to-school marketing campaign. The campaign centers on a 30-second ad featuring actress Michelle Buteau, who encourages parents to 'spend less on your little moochers' with the help of Amazon's back-to-school shopping guide. This comedic style is consistent with its past back-to-school ads, which have featured actors like Randall Park and Kathryn Hahn.

"In recent years, we've seen customers under continued financial pressure and looking for comedic relief in an endless news cycle, so the focus of our campaigns has remained consistent," Jo Shoesmith, Amazon's global chief creative officer, said in an email comment.

Striking a chord

Deeper emotional appeals are at the core of other brands' marketing strategies this season. Among them, Instacart launched a back-to-school campaign featuring two ads designed to remind parents that time spent with their children is what matters most during the busy back-to-school season.

Wavemaker's Rosenthal explained that balancing value and emotion is crucial for marketers to build authentic connections, especially among multicultural audiences. Notably, co-viewing between younger groups and parents is increasingly common. Therefore, marketing to Gen Z and younger generations—who are known for valuing diversity—and their parents through a multicultural lens is a top priority.

"We know Gen Alpha is by far the most diverse generation, so their parents are, in a sense, also diverse," Rosenthal said. "Yes, emotion matters, but tailoring to different multicultural audiences becomes even more important because kids now influence their parents' shopping much more than before."

For example, according to research Wavemaker conducted in March, Hispanic parents value nostalgia and word-of-mouth, while Asian parents are driven by perceptions of reputation. Rosenthal added that focusing on more immersive experiences can also help attract younger audiences.

To resonate with the younger generation, Urban Outfitters recently launched its 'Shift Happens' campaign, reflecting the changes young people experience around events like back-to-school. The campaign spans multiple channels, including partnerships with Pinterest and several influencers, each of whom created their own inspiration boards that were brought to life in offline events.

"This is a window of opportunity to act before the chaos at the end of the year impacts the market."

—Stanlei Bellan, Chief Strategy Officer at Juice Media

American Eagle's new 'Live Your Life' brand platform and fall campaign also employ a similar strategy. 'Live Your Life' is a slogan the retailer used 20 years ago, aimed at promoting self-expression and acceptance. The accompanying campaign includes a series of activations designed to connect with its target Gen Z audience, including a partnership with Life on Film that invited over 200 people to shoot videos on disposable cameras, showing how they live their lives their way.

Craig Brommers, chief marketing officer at American Eagle, told Marketing Dive in July that collaborative elements like Life on Film are more authentic and natural than what the brand has presented in previous back-to-school marketing. This approach could help the brand stand out during this critical sales period. While reports like Deloitte's offer pessimistic spending forecasts, other projections paint a more optimistic picture.

"One thing that has remained resilient over the years is that parents truly support and prioritize their children, so I'm optimistic about this back-to-school season," Brommers said.

Finding the bright spots

Stanlei Bellan, chief strategy officer at Juice Media, said advertisers' behavior this season may mirror consumers, and he expects spending to be 'flat or lower' than last year. While overall spending may be lower, the Olympics and the November election could bring activity peaks as marketers try to avoid broader cultural noise.

"This is a window of opportunity to act before the chaos at the end of the year impacts the market," Bellan said of the back-to-school season.

Devon Schorr, strategy director at agency Movers+Shakers, explained in an email comment that the election could heighten economic concerns, leading to more cautious spending. Therefore, marketers who emphasize value and discounts in their messaging rather than chasing trends are 'more likely to succeed' this season, the executive said.

"One thing I've learned is that we have to stay flexible and agile, ready to react to the mood of the times."

—Craig Brommers, Chief Marketing Officer at American Eagle

This season's marketing is not without its bright spots. According to Deloitte, parents place value above loyalty, with 67% saying they would switch brands if their preferred brand is too expensive. As a result, this season could offer marketers an opportunity to expand loyalty programs, provided they offer valuable incentives, Skelly said. According to another Deloitte study, loyal back-to-school shoppers spend 35% more.

Loyalty has been a focus for marketers like JCPenney and Target, both of which are leveraging member-exclusive value experiences to attract and retain consumer interest.

Meeting consumers where they are

Beyond messaging, marketers must also balance reaching consumers in the right places. According to Deloitte, shoppers this season say they plan to visit more retail formats to find the best deals, with 70% being omnichannel shoppers. To better understand target consumer behavior, Wavemaker's Rosenthal expects retail media investment to get a boost this season, echoing the channel's broader growth trend.

"Marketers shouldn't just concentrate spending on retailer promotions, but should use retailers as a means to drive other media more effectively," Rosenthal said.

Among the channels consumers will use, 33% plan to use social media, up from 21% last year. 12% plan to make purchases through social media for back-to-school shopping, up from 6% in 2023. The top destinations for consumer shopping are mass merchants (77%) and online retailers (65%), which are attractive in terms of both price and convenience.

70% of consumers plan to shop both online and in-store, up 4% from 2023. Although in-store experiences were neglected during the pandemic, Skelly sees this season as an opportunity for retailers to enhance such experiences. Consumers also say they are more loyal to retailers when they have a consistent experience online and offline, Skelly said.

Pacsun is one brand prioritizing in-store presence. This month, the retailer launched its 'Better in Baggy' fall campaign in partnership with Pinterest, placing QR codes in store windows to encourage consumers to browse its seasonal Pinterest inspiration boards. American Eagle's fall campaign also includes large-scale in-store promotions, including projecting custom videos in stores and inviting customers to 'participate in the campaign.'

While messaging, tone, and media mix are all important components of this season's marketing strategy, having the right mindset may be the secret to success. Uncertainty will be a theme this season and beyond, which has taught American Eagle's Brommers to be willing to adapt to ensure the retailer effectively navigates unexpected moments.

"One thing I've learned is that we have to stay flexible and agile, ready to react to the mood of the times," Brommers said. "In the coming months, that's what we'll do."