Minnesotans are back in the spending mood, at least for back-to-school items.
Parents are expected to spend more than the national average on the regular items from apparel to notebooks but also on technology in case schools go from in-person to hybrid or online again, according to a survey done by professional services firm Deloitte.
Back-to-school season has become a more important part of the retail cycle in recent years. Nationally, Deloitte expects families of kids in elementary to high school to spend $32.5 billion, up 16% from last year. Parents of college-age students are expected to pay $26.7 billion for supplies, up more than $1 billion from 2020.
In Minnesota, parents of elementary through high-school children will spend $625 million, the Deloitte survey found. That's $682 per household, $70 more than the national average. The firm did not do local surveys last year. In 2019, parents estimated they would spend $417, a full $100 below the national average.
"We are already seeing strength in consumers," said Katherine Cullen, the National Retail Federation's (NRF) senior director of industry and consumer insights, during a webinar in July. "Due to large retail sales at the end of June, stimulus checks and the child tax credits, this could be a record-setting back-to-school season."
The NRF reported its own back-to-school estimates that are higher than Deloitte's — $37.1 billion for parents of school-age children and $71 billion for households with college students.
In Minnesota, there will still be spending on digital tools that help people study remotely, but the investments will likely be adding on to already established at-home school spaces like monitors and headsets, said Matt Marsh, managing partner of Deloitte's Minneapolis office.
"I think that there is a lot of optimism out there in the Minnesota shopper — the view on their personal economic situation, the sense that we are getting back to normal," Marsh said. "So there are a lot of positives."
But more will be electronic items and other supplies to get ready for students to be in the classroom, including personal hygiene products to help prevent the spread of COVID-19, he said.
According to the data, 75% of Minnesotan parents surveyed said their students planned to attend in-person school in the fall, 13% more than the national results. Twelve percent are expecting a hybrid of in-person and virtual classes and 4% is sticking to strictly virtual. A significant 8% remains unsure.
In 2019, clothing was expected to make up 60% of Minnesotans' back-to-school costs. This year, parents said it would only make up 43% of spending. Computer and electronic items are the higher spending priority this year.
Another change in the local back-to-school season is that parents say they will spend more of their dollars shopping online: 36% of their purchases, compared with 18% in 2019. The data mirrors other retail statistics that show consumers have dramatically adopted more digital shopping methods during the pandemic when many people tried to avoid shopping in stores due to concerns about COVID-19.
"Digital has been increasing exponentially year-over-year," Marsh said. "The pandemic really accelerated it. Anybody who was skeptical about shopping online they are clearly not anymore."
Sales and competitive prices top Minnesotans considerations for selecting a retailer with many Minnesotans relying on mass merchants like Target for their shopping. And the uptick in shopping should take place this month.
Nationally, 59% of back-to-school spending is done by the end of July as more shoppers are concerned about items that can become out of stock. Some other states start school earlier as well.
Usually a strong back-to-school season will indicate a strong holiday season, Marsh said. If economic confidence continues, it should bode well for retailers, he said.
"The issue really is how much virtual sticks when things get back to normal," he said. "And whether it's in school or business, I think everybody is expecting some level of remoteness to stay. ... I think schools are going to and parents are going to demand in-person, but you are going to see a lot more virtual options that will support that in-person experience. It will shift in some way or another the back-to-school shopping experience."
