Inflation Sends Parents Bargain Hunting As AI Joins Back-To-School Scramble

Back-to-school shopping is becoming lessof a seasonal ritual and more of an annual mugging with crayons.

Inflation and rising costs are the leading concerns for parents preparing for the 2026-2027 school year, according to a new report from Epsilon. Eighty percent of surveyed parents who expect to increase their spending blamedhigher prices.

Parents estimated that they spent an average of $829 last year. This year, 66% expect to spend more and 54% expect inflation to push them over budget.

That's animpressive collection of numbers for an occasion built around notebooks, gym shorts and replacing the lunchbox that somehow became a biological research facility.

The findings give advertisersa clear assignment. Consumers aren't looking for lofty brand declarations while calculating whether one child can wear another's sneakers. They want value, discounts and convenient ways toobtain the correct supplies before teachers send a follow-up email explaining that the "blue folder" must be cerulean.

Clothing And Electronics Lead SpendingPlans

Clothing, shoes and electronics topped the categories in which parents expect to spend more, each cited by 59% of the relevant shoppers. School uniforms followed at 54%, sportsequipment at 51% and school supplies at 48%.

Inflation wasn't the only culprit. Forty-four percent of parents said growing children or having more children in school would raise theirspending. Thirty-eight percent cited changing grades or schools while 29% blamed children's preferences for different stores or brands.

In other words, marketers can thank bothmacroeconomics and the adolescent discovery that last year's perfectly acceptable brand has suddenly become a source of unbearable humiliation.

Sales and discounts have a strong effecton brand and store selection for 80% of parents. Seventy-seven percent said they look for deals as the start of school approaches.

Yet 48% still plan to shop early to secure the best selectioninstead of waiting for the lowest prices. Retailers therefore have two useful messages: "This costs less" and "Buy it now before someone else's kid gets it."

AI Becomes The Family Shopping Assistant

Artificial intelligence is also gaining a place in the back-to-school journey. Forty-six percent of parents use AI tools for schoolshopping, with particularly strong adoption among Gen Z and millennial parents.

ChatGPT was the most popular service, used by 64% of parents who turned to AI. Comparing prices was the leadinguse case at 53%, followed by searching for deals and discounts at 47%. Thirty-seven percent used AI for initial research while 33% used it to create a shopping list.

Nearly one-third exploredand compared product types or brands with AI. Thirty-one percent read AI-generated summaries of reviews and 30% used the technology to decide where to buy.

For advertisers, that means productinformation must work for machines as well as people. Clear descriptions, current prices, availability and useful product specifications are becoming essential inputs to shopping recommendations.

A brand can spend millions producing gorgeous advertising. If its product page resembles a filing cabinet that fell down a staircase, an AI assistant may recommend something else.

Ads Still Make Shoppers Do Something

Advertising hasn't lost its ability to influence back-to-school shoppers. Three in four parents took some action after seeing anad, according to Epsilon.

Forty-five percent visited the advertised product's website while 34% searched for reviews. Twenty-six percent purchased the product and 23% asked friends orfamily about it.

Fourteen percent scanned a QR code in an ad. Another 14% visited the product's social-media account while 13% asked an AI tool for information.

The purchasefigure matters most. Brand awareness is lovely, but retailers generally prefer money. The report also found that grade-school parents were more likely than parents of college students to addadvertised products to their carts.

College parents may have learned that once the child is old enough to select a major, the child is old enough to locate a three-ring binder.

Loyalty Rewards Help Determine The Winner

Loyalty programs don't fully determine which brands parents choose, but they have considerably more influence over whereparents shop.

Twenty-seven percent said loyalty programs affect brand selection. By comparison, 59% agreed that the ability to earn rewards influences their choice of retailer.

Forty-six percent plan to use loyalty programs or points to save money, up seven percentage points from last year. That placed loyalty just behind coupons at 45%, buying cheaper products at 44% andreusing existing items at 43%.

Sales and discounts remained the undisputed champion, cited by 80%. Apparently, shoppers still prefer money they can keep immediately over 12,000 points that maysomeday qualify them for a commemorative pencil sharpener.

Epsilon advised retailers to promote rewards prominently, offer members exclusive deals and make points easy to earn and redeem.Extra points on school supplies or early access to popular items could help retailers capture spending while building longer-term relationships.

Late July And Early August Form ThePrime Window

Back-to-school activity peaks from late July through early August. Forty-two percent of parents planned to begin in July while 31% expected to start in August, astatistically significant increase from 2025.

Late July and early August each attracted 22% of parents' typical starting dates. For this year, 28% planned to start in late July and 26%in early August.

"Retailers will need to take a truly individualized approach, with personalized offers and messaging complementing the overall shopping experience for parents, no matterif executed in-store, online or both," Heather Campain, Epsilon's vice president of growth strategy, said in the report.

She added that first-party and third-party data "willbe the key for retailers in unlocking the wallet share with this season's rush to get kids ready for their first days at scale."

Free Delivery Beats FinancingGimmicks

Parents expect to move between stores and digital channels depending on what they're buying. Electronics leaned online while categories such as pantry items, cleaningsupplies and school uniforms favored stores.

Free delivery had a significant effect on purchase decisions for 64% of parents. It was more influential than same-day delivery, buying online andpicking up in-store or buy-now-pay-later options.

That shouldn't be shocking. Parents buying pencils probably don't want a four-installment financing relationship with them. Theywant the pencils delivered without paying $8.95 for the privilege.

The larger lesson for media buyers is that price, availability and convenience can't be separated. Campaigns shouldreach parents throughout the shopping window with relevant offers across channels. They should also reflect what's actually in stock.

Epsilon surveyed 1,234 parents responsible forshopping decisions from May 18 through May 29. Respondents ranged in age from 18 to 77. The sample included 1,102 parents of grade-school children and 132 parents of college students.