How apparel brands like Carter’s are looking to win over budget-conscious parents
As households watch their budgets, some apparel brands are seeing customers become more selective and price-conscious during the back-to-school shopping season.
Jeff Jenkins, evp of global marketing at Carter’s, said many households are buying items closer to the time they need them, versus stocking up for cold weather. Its the lower-value items, like $5 t-shirts, that are purchased in multiples. Yet the company is seeing success with trendy kids clothes and promotions, like a 40% off back-to-school sale or “buy one, get two free” denim deals. Shoes, sneakers and backpacks are still performing well.
“People are spending a little bit less money,” Jenkins said. “It’s still the same amount of items but they’re picking and choosing what is important to them … If I’m watching every penny I’m spending, I’m not buying all the khaki pants in August when it’s still 95 degrees in the south and high 80s in New York.”
Children’s brands like Carter’s and Justice are seeing macroeconomic issues impact spending, even during peak retail calendar moments. Data from the National Retail Federation’s annual back-to-school survey estimated a drop in total back-to-school spending to $38.8 billion from $41.5 billion last year.
That amounts to around $875 per household compared to $890 last year. Clothing and accessories is the second-highest category for spending for K-12 students and their families after electronics, at about $253 per household. In response, brands like Carter’s and Justice are focusing on offering on-trend items that appeal to kids and ensuring that there are affordable price points that work for parents.
Brian McCarthy, retail strategy principal at Deloitte Consulting, said shoppers are less concerned about being loyal to one brand versus spending wherever they can find the best deal. Deloitte’s annual back-to-school survey found that 73% of shoppers are concerned about rising prices for everyday purchases.
McCarthy said that, in particular, lower- and middle-income families are spending 5% and 6% less, respectively, this back-to-school season. In turn, they’re willing to shop wherever they can find the best price. “You look for a particular deal, and look through a physical store or digital channel to make that purchase,” McCarthy said.
At Carter’s, roughly two-thirds of sales still happen in-store, Jenkins said. This is particularly true for shoppers with multiple kids, as Carter’s serves as a one-stop shop with clothes for newborns through elementary-aged kids. The company has also focused on figuring out what starting price points get consumers in the door.
Since the spring of 2024, Jenkins said Carter’s has been rolling out an Everyday Value line of lower-priced staples like $5-tshirts or $6 leggings. These tend to become “cart-starters,” Jenkins said, where people buy multiples. Average cart sizes are around $57.65. “When you get to a certain price point, you really get that velocity,” he said. Looking ahead, the company plans to continue lowering prices on about 20% of our product offerings in the second half of the year, according to its most recent earnings report.
Carter’s houses multiple other brands including OshKosh B’gosh, which it acquired in 2005, Little Planet By Carter’s and Skip Ho. So far this year, sales for the half year are $1.226 billion, a 5% drop from the halfway point of 2023. The brand projects net sales of $2.95–$3.0 billion for the full 2024 fiscal year.
Jenkins said one way Carter’s is aiming to win over parents is by focusing on the durability of its clothing and marketing directly to parents. It will be putting an extra $10 million into marketing this year, including a new ad campaign. The campaign, called “More than Just Cute” focuses on easy-to-wear clothing during messy moments. It’s a change, he said, from the way people used to dress up kids as if they were dolls. From a style standpoint, sneakers, cargo pants, and athleisure-like skorts or moisture-wicking polos are all popular adult styles that Carter’s adapts for kids. “Fashion continues to work,” he said.
Similarly to Carter’s, Elizabeth McCusker, vp of marketing for Justice at Bluestar Alliance, said that offering on-trend styles like athleisure-inspired matching sets and cargo pants, is one way the brand is capturing back-to-school spending. The brand is sold at all of Walmart’s roughly 4,500 locations following the closure of its owned retail a few years ago. Because of this positioning, McCusker said Justice appeals to parents and guardians who are looking to buy all of their tween’s back-to-school items in one place.
“The fact that we’re in Walmart and able to offer the same Justice product you would’ve bought five years ago at a much lower ticket really helps parents and guardians with back-to-school shopping and buying a first-day-of-school outfit,” she said “It doesn’t feel so overwhelming.”
Behind the scenes, Justice has worked with Walmart to decide on inventory and pricing models that fit today’s climate. That might mean some pieces are priced lower than last year, or there are fewer items being made. This year, its line of Peanuts-inspired gear has 40 SKUs from $4 to $32. From a customer-facing perspective, Justice emphasizes style and individuality on its social media platforms, with this year’s campaigns focusing on female Olympic athletes. It’s active on TikTok, as well as Meta platforms that continue to be popular among Millennial-aged parents and guardians.
“It’s a balance between making sure you’re serving up content the girl can see and say ‘This is what I want,’ and still serve it up to the guardian who is going to be the purchaser,” she said. “It’s a little dance we have to do.”