With restrictions increasingly lifting across many parts of the world, consumer confidence is at a tipping point for returning to levels seen pre-pandemic for the first time in almost two years. Consumers are eager to interact with people outside their household and to get back to life and whatever the new normal is. In anticipation of this restored freedom, many consumers are making plans around their desires for travel, shopping at malls, attending music festivals and concerts, enjoying nights out at the movies, restaurants and so much more.
While the world works through varying stages of returning to normal, the challenge marketers face is predicting how the global health crisis influences, and will continue to influence, customers’ mindsets and spending patterns. And with back to school, the second-largest retail season (back to school/back to college combined accounts for $101 billion in the US) right around the corner, household spending will be influenced by a combination of improved consumer confidence, higher costs and strong emotions.
Shoppers are ready to get back to normal
For many, back-to-school represents a fresh start and new beginnings. Some may fondly remember the annual tradition of back-to-school shopping: gathering school supplies, a cool backpack, minimally embarrassing lunchbox, new clothes, shoes, or items to make dorm-living more personalized, topped off with a new haircut and we were ready for the first day of school.
And while last year’s back to school was unlike any other due to the global pandemic that forced the world indoors and into remote learning, many parents, students and teachers are once again looking forward to in-person learning, expected to return for 2021.
A broader reopening brings a wave of optimism and excitement not only for returning students and teachers but parents and guardians too as they ‘return to office’. And with that comes the return of shopping lists.
School supply lists are back, along with a burning desire to wear clothes that aren’t loungewear, new shoes, and of course the first day of school outfit. There will be new items needed for extra-curricular activities that are also back for the first time in almost two years, and that’s not to mention essentially two years’ worth of college students moving into dorms or going to college for the first time.
Spending is expected to top pre-pandemic levels
Visions of a fresh start, new beginnings are only a few weeks away and expected to drive spending that will top pre-pandemic spending levels.
Here are the predicted spending variances by age group:
- Up 32% for preschool
- College students up 13% which is higher than both;
- High school at 4% and
- Middle school at 3%
This year, households in the US are expected to spend up to $270 per student or $789 per family, compared to $250 per student or $730 per family in 2020. Back to college households are expected to spend $1059 (source) due in large part to the rising cost of items caused by supply chain challenges, higher demand over last year, and inflation.
With 60% of shoppers beginning to purchase 4-6 weeks prior to the start of school, it’s a shopping season that peaks between the end of July and the beginning of August and accounts for 50% of all school spending.
Households that start their back-to-school shopping earlier in the summer, before August, tend to spend more money overall and, in an effort to take advantage of deals, will shop at different points throughout the summer. And, unlike 2020, it’s expected that we’ll see 55% of shoppers opting for in-store shopping while other consumers will continue to shop online, citing pricing and convenience as key factors.
Retailers are ready and shaking up their strategies
A recent survey found that three in four US retailers are planning to shake up their back-to-school strategies in 2021 as a result of this unique shopping landscape.
Half of the respondents plan to focus on driving in-store traffic by hosting special on-site events with celebrities or influencers, while others are opting to offer food and drinks while customers are shopping (39%.)
Other tactics planned for boosting back-to-school sales include pop-up shops, and traveling marketing campaigns with vehicles carrying branded merchandise and charity events. And while department stores will see a surge of 25% spending over last year, malls, outdoor shopping centers, and other retailers are expected to make a strong comeback. Additionally, curbside pick-up for online purchases and contactless technology will remain important to consumers seeking a low-contact experience.
Advertisers need to understand what shoppers intend to buy, and why
With the economy essentially in hibernation over the last few months, some households have built up a record level of savings during the pandemic. As a result, some consumers may have more money available to spend after cutting back on travel and other spending in 2020, freeing up an unprecedented £125bn in the UK and $2 trillion in the US in incremental spending power.
And while electronics and study-related furniture took the lion’s share of spending in 2020, this year the categories that shoppers are expected to spend across are;
- Apparel with a 78% growth expected over 2020 (67% higher than 2019-2020)
- Footwear 21% growth
- School supplies 16% growth
- Department stores expected to see a 25% increase
Additional categories also expected to see gains include:
- sporting goods
- apparel (jeans, skirts, jumpsuits, and dresses)
- shaving kits
What’s clear is that this year’s back-to-school season will be like no other. Consumers, by and large, will have stronger appetites to spend more, and purchase a wider variety of products. For advertisers, this creates a unique opportunity to leverage cross-category purchase behavior to create uniquely targeted and contextually-driven campaigns that pique consumer interest.
Contextual targeting is more important than ever this year
The appropriate contextual targeting strategy will create opportunities for advertisers to reach consumers in the moment, placing your ads alongside relevant and timely content. Contextually relevant experiences with brands create higher engagement.
As we head into back-to-school season, Peer39 categories enable brands and advertisers to quickly layer in cookie-free targeting data for campaigns in environments that are of quality, brand-safe, suitable and can be tailored to meet a brands unique needs, while protecting consumers privacy.
One thing is for sure, COVID-related content will continue to be a part of our everyday lives for the foreseeable future. Unlike previous years, back to school shopping this year will include products to keep our kids safe and healthy discussions in the media about return to school plans during COVID.
These discussions and requirements will vary in subject matter depending on the regional infection and vaccination numbers as well as school board and local policies defined for specific geographic regions. This content may or may not be suitable to target on, making brand suitability controls all the more important this year.
Using only blunt keywords, for example, or being overly cautious about what keywords you target, may block some important content than may be ultimately suitable to your audience. Conversely, being too liberal with your targeting can risk you advertising on content that is not suitable for your audience, be controversial, or worse.
Peer39 offers refined suitability controls built into key buying platforms, allowing you to protect your brand by avoiding negative content relating to COVID with precision, based on your brand safety and suitability goals. This helps to ensure that you’re striking the right balance with your brand safety and suitability targeting, while still leveraging the pool of relevant content around back to school shopping.