This month’s Consumer Snapshot video is a brief look at consumer confidence and practical purchase intentions. For August, we also highlight our annual Back-to-School insights on planned spending and online shopping trends, which we collected with the National Retail Federation.
Highlights from the August 2017 Consumer Snapshot:
This month, 53.1% of consumers are confident or very confident in the economy, off nearly a point from last month, but continuing to represent a substantial increase over figures recorded a year ago. The current reading is also tracking ahead of the 13 month average of 50.6%. From a historical perspective, this month’s figure is the most optimistic sentiment recorded for August within the last decade.
While macro economic sentiment lowered slightly from last month, spending strategies follow a more consistent pattern. This month, 37.2% indicate that they’ve become more practical with their purchases, rising less than half a point from July and lowering about two points year over year.
We see similar trends when evaluating consumers’ focus on needs when at the store. This month, just over two in five indicate that they are zeroing in on just the necessities when shopping, flat from July and lowering two points from August 2016.
This month’s special feature is a look at the latest insights on the Back-to-School season that Prosper collected with the National Retail Federation. Focusing specifically on households shopping for grades K through 12, consumers are planning to spend about 2 percent more year over year on apparel, shoes, electronics, and school supplies, and the highest budget recorded since 2012.
This increase is significant for shoppers and retailers alike. Since the latter stages of the Great Recession, budgets have cycled from year to year in an up/down pattern as consumers planned to spend more in a “replenishment” cycle and cut back the next year by “reusing” the previous year’s supplies. So, 2017 marks the first season to break the cycle with back-to-back budget increases.
As for where parents plan to do their shopping, while discounters and department stores remain top destinations for Back to School, though plans to shop each of these retail formats have declined from 2016. Shopping at specialty apparel stores and office supply retailers follows the same pattern. And this year, 46 percent of Back-to-School shoppers plan to head online, holding steady from last year. Note, though, that internet-based shopping is not limited to online pure-play retailers. Consumers’ shopping intentions here could certainly include traditional brick and mortar retailers’ websites.
Among this year’s online shoppers, free shipping is far and away the deal they are most likely to take advantage of. However, more than half also plan to use buy online, pick up in store services – which seem particularly appealing among female back-to-school shoppers. Nearly one in five male online back-to-school shoppers plans to take advantage of expedited shipping services.
For more on our Back-to-School insights for 2017, which were released by the National Retail Federation, visit the NRF’s Back-to-School Headquarters.