People walk on the campus of the University of North Carolina Chapel Hill on June 29, 2023 in Chapel Hill, North Carolina.
Over the past few years, Alicia Browne, the director of housing administration at the University of Alabama, has noticed a change in what college students bring with them on move-in days. In addition to the usual pillows, comforters, and laptops, more students are arriving with mini fridges, headboards, Keurig coffeemakers, and even air purifiers. Some even hire decorators who deliver custom-made curtains, linens, and furniture on a specific vendor delivery day created by the university.
This trend of increased spending on dorm supplies has grown over the last decade but has seen a significant explosion since the pandemic began. According to an annual survey conducted by the National Retail Federation and market researcher Prosper Insights & Analytics, college students and their families are expected to spend an average of about $1,367 per person this year, which is a 40% increase since 2019.
Alicia Browne attributes this rise in spending to the influence of social media, particularly TikTok, which showcases fancy dorm room setups. Additionally, some parents feel the need to make up for their children’s missed experiences during the pandemic by providing them with a comfortable and successful start to college. They are willing to pay for this improved living situation and overall college experience.
This back-to-college spending boom not only presents a sales opportunity for retailers but also allows them to establish relationships with a new generation of young shoppers. It is especially beneficial for companies like Target, Walmart, and Kohl’s, which have been struggling with fewer sales of big-ticket or discretionary items like clothing, electronics, and furniture. These retailers will likely provide insights into sales trends when they report earnings in the coming weeks.
However, the increase in back-to-college sales may not completely offset other challenges faced by retailers. Many companies, including Best Buy and Macy’s, expect sales to decline this fiscal year due to higher grocery prices and a return to spending on experiences.
Nevertheless, retailers have an added incentive to vie for college students’ dollars this year. With the bankruptcy and closure of Bed Bath & Beyond, there is now market share up for grabs. Bed Bath & Beyond was known for being a one-stop shop for college dorm essentials, making it difficult to estimate the total market share it had. However, retailers like Amazon, Home Goods, and Ikea are expected to benefit from this opportunity.
Industry experts believe that Target will be one of the biggest winners in capturing Bed Bath’s former market share. Target offers a wide range of student-friendly items, has locations near college campuses, and carries products similar to those sold by Bed Bath & Beyond. Other retailers, such as Pottery Barn Teen and Williams-Sonoma, have also collaborated to attract college customers with unique and trendy decor options.
In addition to these partnerships, retailers like Walmart and Target have featured college-friendly items on their websites and social media pages. They have also worked with influencers to promote dorm room decor and have even launched special landing pages for college students setting up their first apartments or dorm kitchens.
Overall, the rise in back-to-college spending presents an opportunity for retailers to establish relationships with a younger generation of shoppers and capture market share left behind by Bed Bath & Beyond. Retailers need to cater to the increased expectations for fancy and personalized dorm room setups, fueled by social media platforms like TikTok. Despite other challenges in the retail industry, this back-to-college season could be a bright spot for retailers, especially for those like Target and Walmart that offer student-friendly products.