Back-to-School 2023: Can Marketing Navigate Market Turmoil?

As the back-to-school season heats up, some brands are going to great lengths to stand out, even drawing from decades past. American Eagle has doubled down on its denim-centric marketing campaign, launching a 90s-inspired clothing line influenced by fashion icons of yesteryear—a response to Gen Z's nostalgic interests.

"I think Gen Z likes to look back," said Craig Brommers, chief marketing officer at American Eagle. "Their favorite shows are from the 90s and early 2000s, and some of their style inspiration comes from those eras."

The retailer launched its multi-channel back-to-school campaign in late July, announcing a partnership with Maddie and Kenzie Ziegler—Gen Z sisters known for their roles on the reality show "Dance Moms"—to create a custom clothing line designed by the duo, drawing inspiration from icons like Drew Barrymore, Kate Moss, and Cindy Crawford. This carefully orchestrated move may signal that marketers are trying to boost competitiveness during a season marked by macroeconomic headwinds, though Brommers sees bright spots ahead, citing recent data showing easing inflation.

"We may be facing a volatile external environment," Brommers said, "but I think consumer sentiment is actually more optimistic now than it was three or six months ago."

However, forecasts for consumer spending this season paint a gloomy picture. Deloitte projects that spending by households with students in kindergarten through 12th grade will decline 10% year over year, totaling $597 per child, with overall season spending expected to reach $31.2 billion. For brands vying for the largest share of consumers' limited budgets, marketing around value will be crucial.

"This is the first time in a decade we've seen this kind of decline," said Lupine Skelly, Deloitte's retail, wholesale, and distribution research leader. "It really shows that after 18 months of inflation, parents have had to prioritize where their money goes, whether it's summer travel or saving again."

Anticipating a slowdown

Accompanying the reduced back-to-school budgets are more selective shopping lists, with 34% of parents saying they plan to delay purchasing non-essential school supplies this year, according to Deloitte data. Technology and clothing are expected to take the biggest hits, with declines of 13% and 14% year over year, respectively. This drop may signal a return to normalcy for these categories, which experienced sales surges during the pandemic and the return to in-person learning.

"Last year there was a strong replacement cycle, and this year, parents might think 'What can we make do with for the first few months?' and then only buy the essentials," Skelly said.

Correspondingly, spending on school supplies this season is expected to increase 20% year over year, despite prices for such items having risen 23.7% over the past two years, according to data cited in the Deloitte report. Notably, nearly six in ten parents say they are willing to splurge on certain items for better quality or to treat their kids—clothing (57%) and technology (56%) are the two most likely categories—and some marketers, including Old Navy, seem to have tried to capitalize on this trend.

"I think this speaks to the nostalgia and family traditions that back-to-school season includes," Skelly said. "This idea of treating the child or letting them express themselves and fit in with peers really shows up in the data."

According to Aruna Natarajan, chief client officer at GroupM's EssenceMediacom, this year's spending outlook is expected to have a range of key implications for advertisers. Among them, she anticipates advertisers will match consumer sentiment with softer, more targeted media spending this season.

"Advertisers are cutting back on spending this season and must prioritize which products to support," Natarajan said in emailed comments.

Natarajan added that among other impacts, campaign messaging will include more language about discounts and promotions. Reduced consumer spending during the period will also have a "ripple effect," with advertisers launching seasonal items like Halloween and Thanksgiving earlier to maintain momentum.

Doubling down on value

To resonate with price-conscious parents, Amazon reused the "spend less" message from last year's campaign in its back-to-school push this year, reflecting similar consumer behavior amid ongoing macro headwinds. The campaign, which launched in July, aims to be lighthearted and humorous while directly addressing the season's contradictory realities, said Jo Shoesmith, Amazon's global executive creative director.

"Back-to-school ads traditionally show smiling kids, bright colors, and upbeat music, but they miss what parents are really thinking: raising kids can be expensive, and the annual school shopping trip is a daunting reminder," Shoesmith said in emailed comments.

Key to the campaign is a witty ad starring actor Randall Park, who presents the idea of spending less on back-to-school shopping as novel, only to be supported by financially savvy kids, one of whom points out that spending less is "financially advantageous." The internally developed effort will run throughout the summer across TV, online video, digital, and social media, promoting Amazon's numerous deals and online back-to-school shopping guide.

The tone of Amazon's back-to-school campaign this year is largely similar to its 2022 effort, a deliberate choice based on positive consumer feedback from last year, Shoesmith said, noting that the message helped alleviate the season's stress. She also noted that staying true to Amazon's values was crucial when producing the ads.

"Honesty is very important because consumers are savvy and will ignore campaigns or messages that feel inauthentic or irrelevant to them," Shoesmith said.

Approaching the season with a lighthearted touch has become a focus for many retailers. For example, Gap partnered with "Recess Therapy" in July—the web series known for candid interviews with children, such as the iconic "Corn Kid"—to ask witty kids about their thoughts on the first day of school. Similarly, Carter's brand OshKosh B'gosh launched a cheerful ad, "Find Your Back To School Beat," featuring many kids dancing in back-to-school outfits.

As consumers focus on cutting costs, other previously prioritized values have taken a backseat. Notably, consumer interest in buying sustainable goods has dropped to 35% this year, down from 50% last year, Deloitte found. In 2022, sustainability-focused parents were expected to spend 22% more than the average.

"It's a bit like when pressure hits, after 18 months of inflation, parents suddenly say, 'Yeah, I'm going to protect my wallet rather than the planet,'" Skelly said.

To find the best deals, consumers continue to say that shopping early is best, with Deloitte data showing that as of the end of July, an estimated 59% of budgets had been spent, up from 53% in 2022. Parents will also favor mass retailers (80%) and online retailers (60%), indicating their desire for convenience.

Winning over Gen Z

For American Eagle, making the most of the back-to-school season means marketing directly to its target Gen Z audience, a strategy that recognizes this group can make independent choices, Brommers said. While lower priority, the retailer also employs some offline marketing efforts aimed at "moms and dads," he added.

"We've always found that if you win the hearts and minds of Gen Z, you have the power to win the wallets of their mostly Gen X and Gen Y parents," Brommers said.

To reach younger audiences, the partnership with the Ziegler sisters—who have millions of social media followers—aims to go beyond Gen Z's "multifaceted busyness," Brommers said, referencing the duo's multiple career pursuits since "Dance Moms." The two will promote their versatile clothing line on social media, particularly through selfie-style content to convey authenticity.

American Eagle will also heavily leverage social media to promote its larger back-to-school campaign, relying on Gen Z-favored platforms like TikTok and Instagram while working with hundreds of content creators. The brand has also dipped its toes into Threads—Meta's answer to Twitter—activating shortly after the platform launched in July. Threads quickly amassed over 100 million users after its debut, making it a factor for social-centric brands like American Eagle.

"The fun thing about Threads is we're letting it run—I'm not sitting there approving anything," Brommers said. "The social team is really engaged, and so far, we seem to be rewarded for that experimentation and risk-taking."

Beyond social media, American Eagle also has its largest out-of-home push since the pandemic planned for the back-to-school season, he continued, with August and September activities including billboards in New York City and a 3D billboard in Times Square. The move stems from the observation that, despite being digitally driven, Gen Z still wants to connect with the real world, Brommers said, especially as mental health topics persist.

Overall, the retailer's back-to-school marketing approach this year extends the brand across the various ways Gen Z wants to express itself, Brommers said, adding that this group doesn't want to be boxed in. With a diversified strategy and a shopping season he defines as "optimistic," Brommers is confident American Eagle has gotten off to a good start.

"Our opportunity is to connect with this customer base in a very authentic way, to be a bit disruptive in the market in a way only AE can, and to offer products that can fit all the different occasions of Gen Z," Brommers said. "As we head into the core of back-to-school shopping in August and September, we feel well-positioned for success."