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Deloitte: Clothing to Dominate BTS, Department Stores to Win the Wallet

Thanks in part to Amazon’s Prime Day, back-to-school shopping is in full swing. And several indicators show that parents are price-conscious consumers.

Based on a poll of 1,200 parents with children in kindergarten to 12th grade, consulting firm Deloitte predicts the back-to-school season will reach $27.6 billion in sales, putting it roughly flat with last year’s $27.5 billion in sales.

Clothing is expected to top parents’ shopping lists with 55 percent of the estimated $510 average household budget reserved for apparel. School supplies, computers and related items as well as electronics to account for the rest.

While shoppers are expected to flock to mass merchants, foot traffic doesn’t tell the whole story.

Eighty-three percent of those surveyed indicated their intention to shop this channel, solidifying mass merchants’ No. 1 position for at least three years running. Other top destinations will include dollar stores (38 percent) and online-only retailers (36 percent). Off-price, which occupies the fourth slot with 32 percent of respondents planning a trip there, made a major move from the 14th most-shopped store format for back to school to fifth last year, reflecting the rise in popularity of stores like TJ Maxx and Ross.

While only 27 percent of shoppers intend to hit department stores, it is the second most popular destination for apparel specifically, beating out fast fashion stores, off-price and online. In fact, stores like Macy’s and Kohl’s will capture the highest share of wallet at an estimated $390 per household. Fast fashion is expected to command $338, while specialty stores should take in $320. Mass merchants are likely to only see $234.

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“The lesson for retailers is it appears per the survey that back-to-school is more than competing on price alone or trying to sell across all categories,” said Rod Sides, vice chairman and U.S. Retail, Wholesale & Distribution leader. “It’s likely about delivering the best possible experience to customers in specific product categories.”

Overall, brick-and-mortar is expected to continue to lose ground to e-commerce. The poll found that 19 percent of apparel shoppers will shop online this year compared to 17 percent in 2017. Like last year though, 20 percent of shoppers were still unsure where they’d shop.

Where once it was the deluge of back-to-school related ad spots that signaled the beginning of the end of summer freedom for kids everywhere, for the last four years, Amazon’s Prime Day has been the true kickoff to the season.

In a pre-Prime Day poll conducted by RetailMeNot and Kelton Global, respondents said they planned to spend $167 on average during the sale event, with 40 percent of that expenditure earmarked for back-to-school items. More than 90 percent of parents who intended to shop Amazon that day had school-related goods on their shopping lists.

Retailers who were ready with their back-to-school promotions by mid-July should fare better than those that will start them later. The Deloitte survey found that shoppers who start early spend more than the procrastinators by $89 on average.

In general, this shopping cohort is more likely to research and plan purchases ahead of time, according to a report by media solutions company Valassis. The poll found that 53 percent of parents engage in these activities compared to 43 percent of the wider consumer population. This group is also more into deals than consumers as a whole, with 83 percent indicating that they are persuaded by promotions and sales versus 73 percent of the shoppers in general.

Social media will only be in play for fewer than a quarter of shoppers. Of those who will use social, they’ll primarily be on the lookout for promotions (63 percent), coupons (59 percent), product information (44 percent) and reviews (39 percent).