August 14, 2023
As students and families prepare for the start of a new school year, major retailers and other public companies stand to gain. It is the second most impactful shopping season of the year, in terms of dollars spent, for retail businesses. According to the National Retail Federation, an organization that makes market projections using consumers’ spending estimates, this year’s “Back-To-School” purchases are projected to total over $41.5 billion dollars for students in K-12 grades.
This is an increase of $4.6 billion or 12% growth year-over-year. And for students headed to college, it's even more. College students outfitting their dorms and apartments account for a third of all back-to-school sales. The NRF predicts back-to-college spending this year to be even greater, expanding from $20 billion to $94 billion. The NRF attributes this spike in spending primarily to big-ticket electronics purchases and posh accessories for dorm life. Dorm decor spending is being driven by social media influencers' recommendations for must-haves, and the desire to cultivate a unique aesthetic.
E-commerce mammoth Amazon (Tii:AMZN) continues to offer readily available traditional college dorm essentials and features many TikTok trend products on its platform. In an effort to cultivate a relationship with the college student early on, Amazon launched a college student-specific Prime membership called Prime Student in March 2023. Prime Student is a discounted membership option for students enrolled at a two- or four-year college. It's similar to the non-student membership while offering additional exclusive perks from StudentUniverse, Calm, Course Hero and select Prime Video channels that each have special discounts designed specifically for students in college.
Marketing to college students is a unique challenge. When looking to make a purchase, students are impacted by ads but are shopping for specific brands. Masterful at creating a brand that shoppers seek out, especially back to school, Target (Tii:TGT) has fared well in recent years offering on-trend brands with competitive pricing and discounts. Students with valid college IDs can save 20% off their purchases through Target Circle.
Competitive pricing is how Walmart (Tii:WMT) stays near the top when it comes to back-to-school shopping, having built a solid reputation for providing practical, consistently inexpensive and in-demand goods. Walmart offers same-day delivery, known as Walmart Express, and free shipping, making shopping that much more convenient for busy schedules. And according to many personal sites offering guides to dorm shopping, Walmart is the go-to for basics and necessities that don’t have to be cute, but are a good value.
As college students begin living away from home for the first time and becoming more financially independent, they start to build relationships with brands. Almost 60% of millennials say they are brand loyal, and when they connect with a brand, they’re very likely to continue to stick with it for the long term.
Companies like Wayfair (Tii:W) and Best Buy (Tii:BBY) have successfully attracted the attention of college-age consumers with on-trend expertise and products. Wayfair is known for reasonably priced, hip furniture and accessories like rugs, lamps and artwork. Best Buy provides access to learning tools and experienced staff that can offer suggestions and solutions.
Reaching college students through social media platforms like YouTube and Instagram has brought consumers seeking both trendy and stylish decor items to brands like Urban Outfitters (Tii:URBN) and Five Below (Tii:FIVE). Both brands carry decor items like fans, pillows, artwork, stylish elements for organizing desks, and electronic components like laptop cases and headphones. Five Below focuses on drawing the consumer to good deals, and UO is attractive to student buyers looking to create a hip aesthetic.
The market for dorm decor and dorm must-haves is both fluid and consistent, with the major retailers having a strong presence in the market, but new students always seeking new sources and information vetted by their social media sources.
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