After Two Years of Increased Consumer Spending,

Survey Predicts a 10 % Decrease in 2013

Discount and Online Stores Will Be Beneficiaries of Tighter Budgets,

Shifting Consumer Buying Habits

Brand Keys’ 2013 Back-to-School report card is in. Households with school-age children (pre-Kl through 12th grade) plan a big cut-back in back-to-school spending, a predicted decrease of 10% or an average spend this year of just over $600.00 according to the annual survey conducted by Brand Keys (www.brandkeys.com), the New York-based consumer loyalty and engagement research consultancy.

Average anticipated spending in the major back-to-school categories, are all down from last year.

Clothing:$301.00 (-29%)

Shoes (athletic & dress)$110.00 (-23%)

Computers/Electronics/

Tablets/Smartphones:$150.00 (-32%)

Supplies$  39.00 (-60%)

Books/Study Aids$  10.00 (-56%)

The survey included assessments from 10,000 households, drawn from the nine U.S. Census regions. Interviews were collected by telephone and central location intercepts to account for the surging number of cell-phone only households.

“Some of what we’re seeing reflects concerns of a slowing economic recovery, but the specific back-to-school figures also represent a shift in consumer buying habits,” said Robert Passikoff, Brand Keys founder and president. “Retailers may be running Back-to-School ads right now, but they’ve been discounting and couponing for the past seven months. Educated consumers have already stockpiled supplies for the first day of school.”

In addition to the existence of the low-lower-lowest pricing marketplace, bigger ticket items like tablets and smartphones and computers, which in years past had been traditionally purchased at the start of the school year, are now purchased throughout the year. “Parents aren’t upgrading a mobile device just because classes are starting,” said Passikoff. “Although there’s no way they can get around children’s growth spurts, so clothing and shoes took less of a hit.”

That noted, there’s a more unbalanced distribution this year in terms of retail outlets where consumers’ intend to shop for for back-to-school “with even bigger shifts to the retailers that consumers believe will provide the best deals,” noted Passikoff, “for everything, but particularly for clothing and shoes.”

The breakdown of 2013 ‘preferred’ retail categories versus last year’s reflects the overall consumer tenor and the findings in this year’s survey. Discount stores, online platforms and, secondarily, catalogs were the only categories to show any increase.

Discount Stores:97% (+4%)

Online72% (+34%)

Department Stores:28% (-44%)

Office Supply:25% (-55%)

Specialty Retailers30% (-10%)

Catalogs35% (+3%)

On top of a lower spend this year, consumers will also put off purchases until they absolutely have to buy or they feel there are no better deals,” said Passikoff. This year’s survey showed that 70% of consumers intend to wait until the middle-to-end of August period to shop just before schools open. The genesis of the shorter back-to-school purchase cycle is a consequence of increased levels of consumer expectations.

“Retailers have spent more than a decade teaching consumers they can get something cheaper if they wait longer or look a harder,” said Passikoff. “So they are.”

This year, the top 10 list of retailers showing the greatest increase in consumer intent-to-shop included:

1. Amazon

2. Wal-Mart

3. Target

4. Macy’s

5. Zappos

6. TJ Maxx / Kohl’s

7. Best Buy / Footlocker

8. Staples

“Is this only a price-paradigm for consumers?” asked Passikoff, “Value isn’t just pricing, it’s brand, brand differentiation, and brand engagement. Retailers that can engage consumers and are seen as surrogates for added-value will always benefit. Consumers not only believe that, they behave that way in the marketplace, a fundamental lesson for all retailers this back-to-school season.”