Tackling back to school shopping amid an industry shift

Key takeaways 

• Back-to-school collections grew by 21% YoY in the European market and by 26% within the US market, with the gender gap on collections evening out further
• Back-to-school prices increased by 11% YoY in Europe and by 17% in the US
• US leading brands have higher uniform’s prices compared to the UK ones

Back to school is one of the fashion industry’s biggest shopping events, making July and August crucial months for retailers. The back-to-school market is not only expected to reach $34.4 billion in 2022, but parents are also expected to spend on average, $15 more than in 2021. 

Compared to 2019, average back-to-school expenses per child have increased by 27%, with overall spending increasing by $11 billion. So, is your brand ready to tackle the back-to-school season?

The surge of back-to-school new arrivals

As kids are heading back to in-person classes, many brands are releasing a significantly higher amount of kids’ collections this year. The kidswear sector is booming, and is expected to grow by 5.6% annually, between 2021 and 2026.

As seen by Retviews’ data the back-to-school shopping season is showcasing a particularly interesting increase in mass market kidswear collections in 2022, as opposed to 2021.

Mass market leaders in the US are releasing higher amounts of kids’ apparel than in Europe, throughout the back-to-school season in 2022. Within the European market, Mango increased its kidswear assortment by 59%, whereas in the US market, ZARA Kids increased its assortment by 36%. Leading retailers like ZARA, are seemingly taking advantage of the sector’s popularity, and the back-to-school sales peak. 

The impact of inflation on back-to-school prices

From the National Retail Federation’s annual survey, it was concluded that back-to-school is considered a primary category for parents, who, despite having a bleak economic forecast, would spend 8% more on back-to-school items in 2022 than in 2021. As inflation continues to climb, one-third of consumers indicated that they are cutting back on other purchases, to offset school-related expenses. 

The power of sustainability

A Deloitte report shows that, when shopping for back-to-school, 50% of parents are choosing more environmentally friendly products, or responsibly sourced ones. Sustainable shoppers are a big opportunity for retailers, as they are likely to spend 22% more than the average shopper.

As shown by Retviews’ data there has been a large increase in brands’ sustainability efforts within the past year. ZARA’s Join Life collection makes up 66% and 64% of its back-to-school collection in Europe and the US, respectively. Similarly, 66% of Mango’s back-to-school collection is part of its eco-friendly “committed” collection. Within the US, 61% of GAP’s back-to-school collection is environmentally friendly – created with 100% organic cotton or belonging to its Washwell initiative.

All about uniforms 

In the UK, uniforms are a staple school item. In the US, they were previously only seen in private schools. This is currently changing, as the National Center for Education Statistics has indicated that in the US, nearly  20%  of all public schools,  22% of elementary schools and 10% of high schools have a school uniform policy in place. 

Retviews’ real-time data took a closer look at the uniform market within the UK and US this back-to-school season. Retviews compiled data from brands such as Marks & Spencer, Next, Primark and Sainsbury’s for the UK market, and brands such as Old Navy, Target and Gap for the US market.

As Retviews’ data show, one of the main differences between the US and the UK market is their assortment of either shirts or polos. Polos are the biggest category, making up 32% of the uniform assortment in the US, whilst shirts only make up 4%. 

The opposite is true for the UK, as shirts are one of the leading categories, making up 19% of the total assortment. In the UK, footwear makes up the largest portion of the uniform assortment, standing at 38%.

Retviews data show that there is a strong presence of pants and shorts in both markets, nearly triple the amount of skirts and dresses. Backpacks are also widely present in the US, representing 45% more than in the UK. Catering for kids with sensory problems, M&S is the only UK retailer to offer tag-free clothing, whilst in the US only Old Navy sells tag-free items. 

The US market’s leading brands offer a wider color palette for polos, compared to the UK. In the US, blue and white make up the largest portion of the assortment, at 30% and 16%, respectively. In contrast, the leading polo color in the UK market’s uniform assortment is grey, making up 37% of the assortment. The US market also has double the amount of black pants that the UK has. 

Pricing uniforms

Inflation is the key contributor in the increase in back-to-school spending. As a result, retailers such as M&S and Primark have frozen pricing, with the latter offering a 20% discount for early shoppers, to help parents manage the new cost of living.

As shown by Retviews’ data, prices in the US market are higher than those in the UK for all uniform categories except for polos, where US prices are 2% lower than in the UK. 

In the UK, Sainsbury’s has the lowest entry price and is the brand with the widest price range. Next and Marks & Spencer have a similar pricing structure, however M&S’s maximum price is 40% higher than Next’s. 

Brands discounting strategies

Consumers’ shopping behavior is shifting, and retailers are coping with it by extending back-to-school markdowns. Traditional sales events have become increasingly important for back-to-school shopping, as 81% of consumers plan to shop in the second week of July, in order to take advantage of discounts. On top of that, 2022 is the year with the highest discounts, since the beginning of the pandemic. This is a direct consequence of the decline in demand which has resulted from hikes in consumer prices, leaving retailers with large amounts of inventory.

Retviews’ data show that within the US market, Old Navy has the largest average discount rate, 42% higher than the market average. Taking a closer look at the data behind discounts indicates that GAP’s average discount rate decreased by 51% within the past year, whereas Walmart’s increased by 64% YoY. 

Tackle one of the biggest shopping events of the year with Retviews

 Getting the right retail strategy for back-to-school is essential, because besides being one of the biggest shopping events of the year, with the return to in-person classes this year, parents are not cutting back on back-to-school spending. Parents are also willing to pay a premium for sustainable apparel, indicating a strong opportunity for retailers in their back-to-school retail strategy. 

Following recent supply chain disruptions, it is essential to know where to place your bets and where to discount your assortment, to best manage inventory and avoid unnecessary markdowns. All this can be done easily with Retviews, the AI-powered market intelligence platform for fashion. Track your competitors’ strategy, spot the right assortment for your brand and price your collection to perfection with Retviews.