Second only to the end-of-year holiday season, back-to-school earns big bucks for retailers.
Spending on back-to-college merchandise is expected to reach nearly $26 billion for the second year of measurement, but the plateau is not an indication that there hasn't been any growth.
According to an August 2004 National Retail Federation (NRF) survey of 7,443 consumers, conducted by BIGresearch, college students and their parents will spend $25.7 billion on items that will initially prepare them for school in 2004, compared to $25.8 billion for 2003's preparation.
Phil Rist, vice president of strategy for BIGresearch explained, "Average spending was up, but the number of college students was down slightly."
Rist refers to the $1205.97 spent by the average 2004 freshman, compared to 2003's average tally of $842.66.
The total 2004 back-to-school spending forecast is expected to slightly exceed that of 2003. Combined back-to-school and back-to-college spend is projected at $40.5 billion in 2004, compared to $39.9 billion spent in 2003.
The NRF/BIGresearch report broke down spending by college class, finding that juniors, who may be living off campus and away from home for the first time, are expected to spend an average of $811.83. Nearly one-third ($278.47) would be devoted to dorm and apartment furnishings.
Spending approximately one-third of the freshman budget and one-half of the junior budget are sophomores ($444.66) and seniors ($425.23). Graduate students and medical school students are expected to spend $397.44 on average.
The study found that the bulk of freshman spending – $759.97 – would be devoted to electronics. NRF/BIGresearch further quantified The NPD Group's forecast that 45 percent of back-to-school buyers intended to purchase consumer electronics by projecting that parents and college students will spend $7.5 billion on electronics.
|The 2004 Back-to-College Budget|
|Clothing and accessories||$3.2 billion|
|Dorm or apartment furnishings||$2.6 billion|
|School supplies||$2.1 billion|
More than half (51.9 percent) of the survey respondents said they would be buying their back-to-school items at college bookstores, largely due to the big portion of spending allotted for textbooks.
A study conducted by the National Association of College Stores (NACS) Foundation during Fall 2003 across 21 U.S. campuses found that 14 percent of all textbooks were purchased online, with price being the biggest influence. Graduate students bought twice as many textbooks online compared to the overall student population at 29 percent.
Nearly 22 percent of back-to-college spending will be done online, according to the NRF/BIGresearch study. The 18 to 24-year-old student group proved to be the most adept at e-commerce, with roughly 34 percent opting to buy their merchandise online.
Households with higher annual incomes were more likely to buy back-to-college merchandise online than their lower income counterparts. Roughly 28 percent of respondents with an annual household income above $50,000 reported that they would turn to the Internet for college items, compared to just 17 percent of those earning below $50,000 per year.
Almost twice as many male students will shop for school items online than female students (28.5 percent versus 15 percent). Even 55 to 64-year-olds were more likely to shop online than women at 16.7 percent.
Rist points to common e-commerce challenges as possible reasons for female resistance, such as the inability to try items on or feel the merchandise before purchase.
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