Back-to-school shopping bill to rise 5% to $670 per family

Mannequins display clothes for sale at a J.C. Penney Co. store in Glendale, Calif., last August. This year, 37 percent of school-supply shoppers are expected to compare prices on mobile devices before hitting the stores.
Mannequins display clothes for sale at a J.C. Penney Co. store in Glendale, Calif., last August. This year, 37 percent of school-supply shoppers are expected to compare prices on mobile devices before hitting the stores.

Retail experts expect 2014 back-to-school shopping receipts to jump 5 percent to $670 per household over last year's spending.

Families are getting a later start on their shopping, and they're pre-shopping on their smartphones before going to stores for a closer look at items and to make their buys, said Kathy Grannis, senior director of media relations for the National Retail Federation.

Some 37 percent of shoppers for children will research school items with mobile devices, the highest seen since it became a metric in 2011.

"Mobile devices are becoming the way customers shop," said Pam Goodfellow, principal analyst at Prosper Insights and Analytics, the group that created the report for the retail organization. "Research shows customers are becoming more comfortable shopping on their phones -- even if they don't buy from their phones -- so it's bridging the gap between brick-and-mortar and online retailers.

"I think it goes to show that the store is not dead, and even mobile-toting consumers recognize the importance of the store, especially when back-to-school shopping," Grannis said. "Growing children need clothes that fit and parents want to feel the material in the clothes they're going to buy for their children."

About 22 percent of shoppers will actually click the "buy" button on their devices, up from 18 percent last year, Grannis added.

Back-to-school shopping is retail's second-largest spending event next to the Christmas buying season. The winter holidays grabbed about $602 billion of consumers' money in 2013, and back-to-school and college nabbed nearly $75 billion.

Grannis said that she anticipates this year to be another highly promotional one. The economy has not improved to the point where parents can afford to splurge, and retailers are looking to extract customer dollars in unique and creative ways, she said.

Wal-Mart and other discounters are expected to nab some 65 percent of back-to-school shoppers this year and in turn, Wal-Mart has increased related inventory by 30 percent. The Bentonville-based retailer also has instituted 10 percent more "rollbacks" -- what Wal-Mart calls a temporary drop in prices -- while families gather their goods for the school year, said Wal-Mart spokesman Molly Blakeman.

One retail expert doubted any research group's ability to gauge the mentality and spending for the back-to-school hordes.

"The error range around that estimate has to be huge," said Stephen Needel, managing partner at Advanced Simulations. "Price will not be a factor again -- people know who's less expensive and who's more expensive and that's where they'll shop.

"Wal-Mart's plan may move more volume, but at a lower profit, than in years before. They are clearly hoping that a lower price position will draw in customers from other chains. Either it works, or a price war ensues," Needel said.

The average amount spent last year was $635 per household, down from a 10-year record high of $690 in 2012. Grannis said 2012 spending was so high because more children were entering school that year and families held onto school supply money in the two previous years. The report said 2012 was a stock-up or replacement year.

While fewer parents than usual have already started their shopping, one of every five still believes it's worth their time to start scouting the deals at least two months before school starts. Millennials, those born between the early 1980s and early 2000s, are more likely to wait until they hit the halls before deciding what fashion trends to adopt.

Also, the lure of the sales tax-free shopping days or weekends offered in some states gives parents license to put off shopping until then. In Arkansas, the Department of Finance and Administration has declared the state's sales tax holiday to commence at 12:01 a.m. Saturday and end at 11:59 p.m. Aug. 3. The state will not charge state, local and use tax on certain school supplies, school art supplies, school instructional materials and clothing.

SundayMonday Business on 07/27/2014

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