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With college kids returning to campus, back-to-dorm spending on track to make bigger—but later—splash

With college kids returning to campus, back-to-dorm spending on track to make bigger—but later—splash

FINANCIAL NEWS

With college kids returning to campus, back-to-dorm spending on track to make bigger—but later—splash

College students shopped for back to school items.David L. Ryan | Boston Globe | Getty ImagesJade Dedrick spent the past year holed up in her childhood bedroom taking college classes on video. She had a short back-to-school shopping list last fall: a five-subject notebook, colorful pens and a planner.This week, the 20-year-old college senior returns to Howard University and her list is much longer. She wants to buy a beanbag chair, plants and artwork to help decorate her off-campus apartment. She needs cleaning supplies, a vacuum and food to stock the fridge.She said she has not yet tackled all of that shopping — or added up how much those purchases may cost.”I’m scared to ballpark it,” Dedrick said, with a laugh.For many college students, the coronavirus pandemic has meant long days stuck in front of a computer or a deferred year away from school. This fall, a wave of young people will move into college dorms and campus apartments — or return after a year off — and will need the extra long sheets, shower totes, bulletin boards and other decor to match.Yet some are putting off purchases, as they juggle a full summer schedule and weigh pandemic-related uncertainty.College students and their families expect to spend an average of $1,200.32 — up about 13% from a year ago, according to the National Retail Federation’s annual back-to-school spending survey. Prosper Insights & Analytics polled 7,704 consumers from July 1 to 8 for the survey. College spending is expected to total $71 billion, up from $67.7 billion last year, according to the survey.Most of that increase is coming from more spending on electronics and dorm furnishings, the survey found.On average, back-to-school and college shoppers have completed only 51% of their shopping so far, according to a follow-up survey of 8,216 consumers that the trade group fielded from Aug. 2 to 8.Joe Derochowski, home industry advisor for market researcher The NPD Group, said historically, retail sales reflect a college spending bump in June and July. However, he said, rather than shop, teens and their families seem more eager to socialize after months of being cooped up and finally getting Covid-19 vaccines.”You finally get a chance to go see friends and family,” he said. “You finally get a chance to maybe have people over. There’s all these other needs that are up there that may have jumped ahead.”Plus, he added, some students may want to wait to hear final details that may influence plans as colleges and universities continue to monitor the pandemic. According to the Centers for Disease Control and Prevention, more than 90% of U.S. counties are now seeing substantial or high transmission of the virus.Source: Bed Bath & Beyond PRA big opportunityRetailers are already trying to cash in on the opportunity, no matter when customers shop.Kohl’s began marketing for back-to-dorm shopping early in the summer because the return to college seemed more certain this fall, said Greg Revelle, Kohl’s chief marketing officer. It also launched a new tool that allows college students to “build a bed” with throws, pillows, twin XL sheets that fit dorm mattresses and more. It also added desks to its private-label home goods line, The Big One.Walmart and Target have also played up back-to-college merchandise at stores and online, such as furniture, laptops and home goods like throw pillows and faux succulents. Target has a college registry. It’s also partnered with Pinterest on a visual search tool for its app that let’s a shopper snap a picture of an item and find a similar one at Target.Some retailers are also trying to draw attention to new brands or parts of their store. At Walmart, for instance, the company is trying to introduce younger consumers to its Gap Home brand and at Kohl’s, foot traffic for dorm shopping coincides with the opening of Sephora inside of some of its stores.NPD’s Derochowski said college students are putting extra effort into decorating this year — a desire that’s reflected in retailers’ colorful kitchen appliances and variety of bed ensembles.He said retailers have a long-term business reason to woo college shoppers. Much like a wedding registry, he said, brands can connect with consumers at a meaningful moment in their lives and build loyalty.Adi Wineland, a senior at James Madison University, said he is still holding off on some major purchases like a meal plan and parking pass.Andy AriasPostponed shoppingThe pandemic and spread of the delta variant have complicated the return to campus, as colleges and universities have announced evolving requirements for the fall. This week, for example, Stanford University joined a growing list of schools that are requiring weekly Covid testing of students— regardless of their vaccination status. Other schools have announced vaccine mandates or updated their policy on masks.Adi Wineland, a 21-year-old student at James Madison University, is among the shoppers who have wavered on when to check off items on his back-to-college list. On the one hand, he said many of his friends have sprung for big furniture purchases or signed leases for pricier apartments since they didn’t have those expenses last year.At the same time, Wineland said, he feels a sense of uncertainty as he sees the rise of Covid-19 cases. He said he has bought some items that he would need for the return to the classroom: a larger backpack, notebooks and binders.However, he said he has put off some of the bigger purchases. For instance, said he is not sure what kind of clothes to buy — new outfits for class or loungewear like T-shirts and shorts — since there’s a chance that some or all of his classes may pivot to virtual learning.Wineland said he is also pushing off buying a meal plan and a campus parking pass, two expenses that may be unnecessary if he learns at home. He said he doesn’t want to sink money into those and not get a refund.”I’m kind of taking a wait-and-see approach,” he said.Bed Bath & Beyond CEO Mark Tritton chalked up the delay in shopping to families enjoying a “post-Covid lockdown moment, out there having fun and getting summer sun.” In an interview with CNBC’s “Closing Bell” earlier this month, he said its market research found the majority of customers are less than halfway done with their purchases.He said the retailer expects dorm shopping to gain steam in the weeks ahead.”Good things lie ahead in August and I think even extending into September,” he said.


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