Look Who's Kicking In Bucks for Back-to-School Purchases

Gen Z has a voice in purchasing decisions, and money, too

Author: Andria Cheng

July 13, 2017

Understanding the needs and wants of Gen Z is a growing focus for retailers and other marketers, and for good reason: These so-called digital natives are calling the shots more when it comes to their parents’ purchasing decisions—and they are also footing more of the bill themselves.

Take this year’s back-to-school shopping season. About 65% of shoppers said that at least half of their back-to-school spending is a direct result of their children’s influence, up from about 57% who said so last year, according to the National Retail Federation’s annual survey conducted by Prosper Insights and Analytics released Thursday.

Interestingly, the study found kids are pitching in more of their own money. Teens, on average, are shelling out $37.64 of their money this back-to-school season, up from $32.90 last year and the highest since at least 2007, according to the survey. And preteens will contribute $27.09 of their own money, up from $20.08 last year and also the highest amount in at least 10 years.

The kids’ contributions make up only a fraction of the average of $687.72 families plan to spend on back-to-school purchases this year, but their financial participation, along with their increasing call on what to buy, signals the increased need for retailers and brands to speak to young shoppers on their terms.

Getting the back-to-school season right is crucial not only because it’s the second-largest US retail sales period, but also because it sets the tone for the holiday season that follows, retail’s biggest selling period.

“We’ve seen children’s influence creep up the past few years,” said Katherine Cullen, director of retail and consumer research at NRF, in an interview. “This is something we’ve been seeing in some other consumer areas also. Parents today want their kids to be involved and have a voice in what they are purchasing. Kids are viewed as consumers.”

Indeed, over 60% of Gen Zers said they influence family decisions on buying things from clothes and shoes and electronics to food and beverages and furniture, according to a separate global survey of 15,600 teens and young adults ages between 13 and 21 IBM conducted for the NRF in a study published earlier this year. (The study identified Gen Zers as those born in the mid-1990s and beyond.)

“The digital knowledge of Gen Zers often exceeds that of older members of their households and can influence family members’ paths to purchase: from product evaluation, to purchasing methods, to post-purchase activities,” the IBM-NRF study said.

When it comes to their growing financial back-to-school contribution, it looks like there’s  a good reason behind the phenomenon: The IBM-NRF study found more kids are putting their tech-savvy skills to entrepreneurial use. While 59% of them said they received an allowance, 22% said they made money online. And even among the youngest group in the study, 13- to 15-year olds, 14% said they made money online.

In fact, while majority of young people like to spend their free time online and more than two-fifths each like to watch TV/movies, or hang out with family or friends, 29% of the entire sample universe said they spent their free time trying to earn extra money, outpacing the percentages of those citing other activities including reading, exercising, or participating in extracurricular activities.