Inflation is top of mind for millions of families that are deep into back-to-school shopping. Food costs are up an average of 12% from last year. Gas prices, which peaked at $5.01 a gallon in June, are down significantly but still $4.01 as of August 10 — almost $0.70 more than last year. But when it comes to clothing, the fear of high prices is being met with significant promotions from retailers that rely on the season to meet annual sales projections.
According to the National Retail Federation, this summer, U.S. shoppers are set to spend $37 billion on back-to-school items. A Morning Consult Poll included in the report showed that half of that spending will go toward clothing. Deloitte’s annual report on back-to-school sales highlighted similar findings; it saw saw an 8% year-over-year increase in total spending per child, with an 18% increase on clothing spending and an 8% decrease in technology investments. Amid rising costs, people are seeking out deals, responding to strategic marketing and evolving their ways of shopping.
Old Navy, which holds the top market share on kids’ clothing, according to NPD, announced a promise to not raise prices on certain kids’ items for the entirety of the back-to-school season. At the same time, it’s been running sales and promotions, as usual.
“In April, we announced our commitment to locking prices on our everyday kids’ fashion essentials, with the continued financial pressure on our customers,” said Andres Dorronsoro, svp and head of merchandising at Old Navy’s. “And we decided to expand our price freeze to include denim for the whole family through the end of September.” Dorronso declined to comment on how this choice has impacted the business and its supply chain ahead of the release of the company’s quarterly numbers.
Other retailers like Walmart and Target will also offer more extensive apparel sales than usual during the back-to-school season. In Walmart’s case, these sales stem from an influx in inventory, which the brand says is due to inflation-related cutbacks from its shoppers.
“Apparel in Walmart U.S. is requiring more markdown dollars [to drive sales],” Doug McMillon, Walmart Inc. president and chief executive officer, said in a July press release. While these discounts appear to be on multiple styles, according to June polling from Big Village, 78% of parents plan to shop for their children at Walmart this season. Big Village
Some retailers are trying to engage consumers with clever marketing. Dick’s Sporting Goods, for example, launched its “School of Sport” campaign on Roblox in late July. According to a press release, the game will encourage shopping through a points system.
“Each player will have a personalized locker containing The Store where they can use style points — the in-experience currency — to purchase shoes, apparel and accessories to outfit their avatars,” according to the press release.
Gap, on the other hand, is hoping to engage customers through an inclusive advertising campaign called “Everbody Belongs.” It launched on July 27 across GapKids social channels, and television and online ads. Gap CMO Mary Alderete told MarketingDive that the campaign is focused on creating value beyond price. “When we think about the parents, value creation is not necessarily just discounting,” she said. “It’s really important to give them the right product that’s relevant.”
Finally, the prevalence of resale is also giving way to additional options for families looking for more affordable clothing.
“In the first two weeks of June, we saw searches for kids’ items, such as backpacks, increase nearly 50% compared to the last two weeks of May. We predict that more consumers will be seeking out secondhand to get better deals as summer continues,” said a spokesperson for resale website ThredUp. “In fact, ThredUp’s recent survey conducted with GlobalData found that 42% of Gen Z say they plan to buy secondhand for this back-to-school season, and more than half of college students say they plan to buy secondhand.”
On top of their already discounted prices, many of the resale sites, including ThredUp, are offering discounts of up to 50%.
Instead of slowing down back-to-school apparel shopping, inflation seems to be exasperating a shift that’s been happening for quite some time. The resale market is set to double by 2026 to over $82 billion.