Back-to-school marketing faces challenges: consumers focus on saving money, how should brands respond?

Inflation has become the top concern for parents this back-to-school season, but market signals are mixed, and its actual impact on purchasing decisions remains unclear. As a result, brands and retailers are striving to find marketing messages that highlight value without sacrificing sales.

Early 2022 brought optimism for this year's back-to-school season as pandemic-related challenges eased, but health concerns have been replaced by recession worries. Despite this, projected spending does not reflect economic weakness: according to Deloitte's 2022 back-to-school survey, the market is expected to reach $34.4 billion, up 24% from pre-pandemic levels.

Parents expect to spend $661 per K-12 student this season, an 8% increase from last year's $612. Additionally, according to NerdWallet's 2022 research, 50% of parents admit to planning splurges (down from 93% last year). But these apparent bright spots come with concerns—Deloitte's survey shows that 33% of consumers say their household income has worsened compared to last year.

"Many people complain about inflation, and consumers are complaining too, but most haven't changed their behavior because of it," said Sucharita Kodali, vice president and principal analyst at research firm Forrester.

Economic uncertainty is driving consumers to adopt a "do more with less" attitude, reassessing relationships with brands they once considered reliable, and they may switch at any time if other brands offer better value. Deloitte's survey shows that 77% of consumers say they will switch brands if prices are too high or items are out of stock.

Consumers are also hunting for deals earlier, with 53% of K-12 spending expected to be completed by the end of July.

"Inflation has affected every aspect of this year's back-to-school season, and most retailers' strategies seem to reflect its impact on consumers' ability to purchase school supplies and clothing," said Dave Bruno, director of retail market insights at retail technology company Aptos, in an email.

E-commerce giant Amazon quickly seized the opportunity, launching a back-to-school ad starring Kathryn Hahn. The 30-second spot urges parents to "spend less with confidence" on school supplies, responding to shifting trends and demands. Following closely, Target introduced significant discounts and Prime Day-like storewide promotions this season, while extending teacher discount opportunities.

"Amazon's Prime Day has become the unofficial start of the back-to-school season, and despite seemingly reduced marketing and promotions, the event still generated approximately $12 billion in revenue," Bruno said. "Retailers running competitive promotions during Prime Day are heavily focused on discount messaging, with many advertising 'Black Friday in July.'"

'Normal' prices

Spending expectations across retail categories show that children need clothing, while other areas, such as technology, are largely already covered. According to Deloitte's survey, K-12 parents expect to spend 18% more year-over-year on clothing and accessories, and 7% more on school supplies, hinting at the end of remote learning. Meanwhile, technology spending is expected to decline 8%, with 81% of parents saying these needs will be provided by schools.

"A large portion of school supplies is electronics, especially for college, and electronics have actually experienced deflation," said Forrester's Kodali. "It's one of the few categories seeing deflation."

Some stores reduced casual apparel after the athleisure trend, making clothing purchases necessary for those looking to refresh their look. Retail giant Gap promoted retro styles for the 2022 back-to-school season, such as loose jeans, pocket tees, and baseball jackets, to echo modern preppy style, its chief marketing officer Mary Alderete told Marketing Dive in July.

Value beyond discounts

Many brands have launched discounts around inflation, while others seek to convey value in more indirect ways. L.L.Bean's back-to-school campaign "Dear L.L.Bean" focuses on emotional connection, recreating a letter a now-23-year-old consumer wrote to the brand in 2007, asking how to break its bestselling Book Pack backpack so her parents would buy a new one. The 30-second ad uses the letter as narration, conveying the message that "no matter what, the pack won't break."

Gap's 2022 back-to-school campaign "Everyone Belongs" also uses similar messaging, promoting a clothing line "approved by hand." In its 30-second national ad, children share what being different means to them, reinforcing the brand's long-standing advocacy for inclusivity and its "modern American optimism" thread, echoing the diverse styles children may showcase.

For consumers, value may also mean paying more attention to specific categories. Deloitte data shows that parents focused on their children's mental health expect to spend 8% more than average this season; those focused on sustainability expect to spend 22% more. This mindset shift may stem from the psychological burden of the pandemic, prompting changes in priorities.

Nature Valley, long committed to sustainability, took the opportunity to launch an eco-friendly back-to-school campaign, encouraging consumers to post videos of their sustainable practices on TikTok using the hashtag #ReTokForNature for a chance to win free back-to-school gear from the Nature Valley ReTok store, including items co-created with brands like L.L.Bean and Stasher.

Where consumers go

As consumers adjust behavior due to recession concerns, advertisers are following suit. Ad spending declined for the first time this year in June, breaking a 15-month growth streak. Despite the back-to-school season being an ad-heavy period, Forrester's Kodali believes spending cuts will continue as long as economic turmoil concerns persist.

"I think the ad decline is because companies are panicking about a recession," Kodali added. "...Typically, when there are recession concerns, companies try to cut spending to save cash, and marketing is an easy place to save money."

Despite the decline, retail ad spending remains at historic highs. According to Standard Media Index's latest Core Data, retail ad spending grew 5%, with discount store investment quadrupling year-over-year. As marketers evaluate ad categories, it's worth noting that consumers have returned to in-store shopping—49% of spending this year will occur in stores, up from 43% in 2020 and 2021, but still below the 56% pre-pandemic level in 2019.

Digital channels dominate

With increased in-store shopping, online spending is expected to decline for the first time since 2017, accounting for 35% of this year's spending, down from 39% last year. But this isn't due to lack of interest—surveys show 42% of shoppers plan to use emerging technologies for shopping, with the most common use cases being digital wallets, shoppable content, and cashierless stores, while augmented reality and virtual reality are least common—suggesting that despite the metaverse's growing popularity in other markets, back-to-school campaigns may not be its arena.

The top three preferred back-to-school shopping destinations among parents include Walmart (63.5%), Target (53.3%), and Amazon (50%), according to JLL's annual back-to-school survey, indicating that advantages like free fast shipping and convenience remain strong.

"Prime Day and competitive retailer promotions have indeed captured a share of online back-to-school spending," said Aptos's Bruno. "But the post-pandemic return to physical stores remains important and meaningful, and we do expect some spending to shift substantially from online back to in-store."

Nevertheless, online shopping is unlikely to collapse in the short term, as many parents have become accustomed to conveniences like fast free shipping.

"This is more about current shopping patterns than marketing channels," said Steve Rowen, managing partner at retail systems research firm, in an email. "If the default is 'I order online,' then it takes a very compelling marketing campaign to get people into stores. If that hasn't yet become the shopper's default, there's still a huge opportunity. But based on our research, if people go to stores now, it's because they genuinely want to, not because they have to."

As privacy regulations change, advertisers face growing challenges in finding standout marketing strategies, especially with Google again delaying third-party cookie deprecation to 2024 and Facebook's privacy compliance adjustments in recent years. Retail media networks have thus continued to grow, with many adding optimization and analytics features to stand out in a saturated field.

Despite a range of difficulties, reaching consumers and driving sales may not require a redesign. Consumers seem to be paying for 'normal'—perhaps marketers should revisit blueprints from the past.

"I think they're approaching back-to-school marketing like it's 2018 or 2019," Kodali said. "Competition is fierce, but budgets are ample, and if you want to seize the opportunity, you need compelling messages, competitive prices, and reach customers at the right time."