How Brands Can Still Win Over Back-to-School Shoppers

Welcome back to The Week Ahead. This is Marc Bain, news, features and reports editor at BoF, with an overview of what to look out for as parents and kids get ready for the school year.

With less than a month to go before classes start up again, the back-to-school season is entering its final weeks.

Plenty of households will have done their shopping already, but not all. Many have delayed purchases or spread them out in an effort to help manage their budgets, according to a National Retail Federation survey last month. Among those that hadn’t finished their back-to-school buying, their top reason was that they were still waiting for the best deals.

Shoppers Are Willing to Part Ways with Their Money

Inflation, higher gas prices from the war in Iran and economic uncertainty are weighing on shoppers. NRF found families with students in elementary school through high school anticipated spending about 1 percent more this year than last year and cited affordability as a top concern. In a separate Deloitte survey of back-to-school spending plans, US families expected to cut spending about 6 percent when adjusted for inflation, with wealthier households expecting to pull back even more. While the surveys presented different outlooks for the season, they agreed that if there’s one thing consumers are looking for, it’s value.

Cost consciousness doesn’t mean consumers are unwilling to drop money on fashion. Those same households told Deloitte they expected to spend 22 percent more on clothing and accessories, even as they pulled back on other categories like tech. PwC, in yet another back-to-school report, noted that many families are spending at least twice as much on clothing and shoes as on actual school supplies.

Clearly clothing is still a top priority; what kid doesn’t want to walk into the new school year looking their best? But retailers continue having to work to earn every purchase by offering products shoppers think are worth the money, which doesn’t always mean having the lowest price. Just look at Ralph Lauren, which last week reported another jump in sales as it continued its move upmarket.

This week will also be a check in for two other companies that have seen success with their premium positioning, running brand On and Coach-owner Tapestry, as they report results. Both will be doing their best over the next few weeks to grab a share of those last back-to-school shopping moments.

Recalibration at On

The Swiss brand is in a period of transition. After years of surging sales driven by consumers snapping up its premium sneakers, typically at full price, the brand’s growth has begun to moderate, while the company also underwent a leadership shakeup earlier this year, announcing that chief executive Martin Hoffmann would step down after less than a year in the role and be succeeded by company founders Caspar Coppetti and David Allemann. When On reports its latest earnings on Tuesday, it will be looking to reassure investors that it has the right team and strategy to deliver long-term growth. So far this year On’s stock is down 20 percent.

Can Coach Extend Its Momentum?

Coach has been on a hot streak, drawing in legions of Gen-Z shoppers with its Tabby bags and accessories such as charms. It raised its annual forecast for the third time in May, and when it reports results on Thursday, investors will be looking for clues as to whether its US momentum is holding up or finally starting to slow. The company’s stock price is up 25 percent this year, but investors have been cautious lately. Any disappointment could lead to a big reaction (see Adidas, for example). They’ll also be looking for more detail on the company’s plans for its struggling Kate Spade brand, which announced its hire of Jonathan Saunders as its new executive creative director just a few weeks ago, marking the first time in nearly five years that it will have a single creative chief.

The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to marc.bain@businessoffashion.com.

Editor's Note: This story was amended on August 10 to clarify that the percentage decline in back-to-school spending forecasted by Deloitte was when adjusted for inflation.