Parents on a budget have been forced to slash spending on back-to-school purchases. Battling prices at the pump and struggling to make mortgage payments, 71 per cent of households said they will spend less on back-to-school items this year, with clothes being the number one area for cutbacks, according to a survey conduced by Deloitte.
Fortunately, it's not all bad news. Lucky for parents, cheap is chic as far as their kids are concerned.
The thing to keep in mind is that there's a delicate balance when it comes to shopping for your kids. Teens and children like certain, specific brands (54 per cent of parents in the Deloitte survey said they have had at least one child "name drop"), so the trick for parents is to stick to their budget, but still make their kids happy.
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"Kids' expectations are rising right along with gas and food prices," says Don Fotsh, vice president of user experience at PayPal and father of six.
Bargain shoppers, starting young
But there are ways parents can save money and still meet those expectations. Discount retailers like
Wal-Mart (nyse:
WMT) and
Target (nyse:
TGT) have become attractive destinations for shoppers of all ages and, in particular, teens take pride in showing off their cheap, fashionable finds.
"The junior customer is not so much label driven as determined to find the right fashion," says Kathy Bradley-Riley, senior vice president of merchandising at The Doneger Group, a source of global market trends and merchandising strategies to the retail and fashion industry. "Teens are just as concerned with value pricing as their parents because many of them are on a budget, have part-time jobs and have to fill up their gas tanks or pay cellphone bills."
According to a survey conducted by Brand Keys, a New York-based brand and customer loyalty research consultancy, 85 per cent of households said they prefer to shop in discount stores.
It's not just luck or the state of the economy that makes discount retailers appealing; these stores know their customers. Target's partnership with the Disney Channel to sell merchandise from the original movie Camp Rock has been a hit with younger children, while collaborations with fashion designers such as Rogan have been appealing to teens and the college-bound demographic.
Specialty retailers like The Children's Place and
American Eagle Outfitters (nyse:
AEO) have also bumped up their value proposition, lowering their opening price point and offering deeper discounts on denim and other merchandise, says Kimberly Greenberger, retail analyst at
Citigroup (nyse:
C).
Plan ahead
When it comes to saving money, parents should think about what their kids want and then start going to stores—not the other way around. Stores like Old Navy and H&M are perfect for basics like T-shirts and jeans, which is preferable to buying these items at a more expensive store for designer or brand-name goods.
And since teens like to stand out, says Megan Howard, editor in chief at Gifts.com, it's wise to let them make some of their own purchasing decisions. "Instead of splurging on clothes, give teens a reasonable budget for an accessory from a brand they enjoy," she says.
The Internet should be the first stop for parents to research merchandise, find competitive prices and print store coupons. By doing background research before getting in their cars and driving around in circles, parents can save the time and money, Howard says.
"Many times it's possible to consolidate your shopping to one destination"—such as a shopping center with all the right stores—"if you plan ahead," she says.
Bargains in abundance
With retailers starting back-to-school sales earlier (according to a Citigroup survey, stores have been offering promotions since early in the summer), parents have the luxury of spending more time searching for bargains and waiting for items to go on sale.
For example, PayPal launched a back-to-school channel on its Web site earlier this month as a destination for parents to find clothing and supplies that fit their budget. Available on the channel are cash back offers, discounts and other promotions.
"This year's back-to-school shopper is a bargain hunter at the core," says Phil Rist, vice president of strategy at BIGresearch, which worked with the National Retail Federation on its back-to-school survey. "Though parents want to make sure kids are fully prepared for school, they will be comparing prices online and in stores before making any big purchases."
The main trick to saving money as a parent, though, is to look carefully at what's already in your kids' closets and don't need to be replaced, advises Howard. "They should take stock of what they already have in terms of clothing and supplies and see what they can repurpose."
When it comes to saving money, it all boils down to parents practicing what they preach: doing their homework.
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In Depth: Back-To-School Shopping Tips
