Back-to-school season brings a wealth of emotions. For some, it breeds excitement and relief, while others feel dread. For retailers, however, it means just one thing: spending. The National Retail Federation's 2010 Back to School and College Survey found that consumers will spend an estimated $55.12 billion this back-to-school season. Those numbers make it the second-largest spending event for the year, behind the winter holidays. Furthermore, performance during the back-to-school season serves as a barometer for what's to come with the holidays. That said, this season in particular presents a real opportunity to build a sound investment strategy - if you know where to look. (For ways to save on retail shopping, check out Coupon Shopping: Clip Your Way To Savings.)

IN PICTURES: 5 Ways To Control Emotional Spending

Look Beyond the Obvious
We know to watch the typical big box retailers that parents and incoming freshman frequent for back to school shopping. But in this economy, moms are tightening control over what their kids are spending, and retailers who are used to making huge gains from sales on non-necessity items like apparel might take a beating.

But there is some good news. The new spending powerhouses this season aren't the predictable target market of moms and incoming college freshman. According to the National Retail Federation, the top shoppers this back-to-school season are established male college students, dads and those who buy online.

As an investor, your job is to determine to which retailers these golden geese will flock.

Established College Males
According to the National Retail Federation's "Top 10 Trends for Back to School This Year," college men will spend 35% more than women on back-to-college merchandise ($965 vs. $713), which includes personal care items, and furnishings for dorms and apartments - not just electronics. On the contrary, freshmen spending will drop by 19% this year, potentially because fewer are moving out of their parents' home. (Find out more about college budgeting; read Save On College Budget Busters.)

And where will these established college males spend?

Of the college students surveyed, more than 53% will buy from discount stores, 42% at department stores and 36% will purchase from an office supply store. Other outlets include online (28.6%), and clothing stores (28.2%). One area not to overlook? Of all respondents, 43% indicated that they will purchase room décor and apparel from their campus bookstore.


IN PICTURES: 5 Money-Saving Shopping Tips

When asked whose advertising struck a chord, respondents ranked Wal-Mart (NYSE:WMT), Staples (Nasdaq:SPLS), JCPenney (NYSE:JCP), Macy's (NYSE:M), Kohl's (NYSE:KSS), Best Buy (NYSE:BBY) and Office Max (NYSE:OMX) among their top picks. Survey results also indicated that retailers who offer coupon incentives and in-store promotions could fare well in the competition for back to school dollars, as 38.6% and 31% of respondents, respectively, ranked these tactics as influential to their purchasing.

Keeping a tab on these companies just might give you an investment leg up as they head into their peak selling season.

Dads
Moms are an important consumer in retail, but The National Retail Federation also points out that the gap is narrowing; now dad is also a big opportunity to add to the bottom line. According to the survey, dads of children in grades K-12 will spend $671, or 25% more than moms, on clothing, shoes, electronics and school supplies. Where can an investor take advantage of this good news? Focus on department stores, specialty stores and online retailers, where dads are more likely to shop.

Opportunity Abounds Online
Another telltale key to who will fare well in the back-to-school spending bonanza? Look to the retailers that have mastered how to strategically deliver a completely seamless online shopping experience.

The National Retail Federation's survey also found that not only will buyers conduct research of competitor offers online, they'll buy there. Better still, they'll spend $266 more (on average), than those who buy at a brick-and-mortar establishment. This presents a real opportunity for the retailers who not only understand online shopper behavior, but also effectively use CRM and other data to cross-sell and increase purchases.

Kohl's and Staples even took their online presence a step further by venturing into "feel-good" causes and giveaways executed on Facebook. Time will tell if those efforts translate into a successful back-to-school sales season. (For related reading take a look at Sneaky Strategies That Fuel Overspending.)

For the latest financial news, see Water Cooler Finance: Mergers, Hostile Bids And SEC Probes.

Related Articles
  1. Stock Analysis

    3 Predictions for Amazon in 2016 (AMZN)

    Learn the top three predictions for Amazon in 2016 as the company comes off an exceptional year in terms of revenue and expands into new markets.
  2. Stock Analysis

    5 Reasons Alibaba's Earnings Disappointed in 2015 (BABA)

    Look at the reasons why Alibaba's earnings disappointed in 2015, including weak economic growth, the soft renminbi and allegations of counterfeit products.
  3. Investing

    Seven Sustainable Retail Dividends

    Seven retailers which pat sustainable dividends when examining both the companies' payout ratios and free cash flows.
  4. Budgeting

    Craft Coffee Review: Is It Worth It?

    Learn more about one of the first and most flexible specialty-grade coffee subscription services on the market, a perfect fit for any coffee lover.
  5. Stock Analysis

    Etsy: How It's Fared Since Its 2015 IPO (ETSY)

    Discover why Etsy had one of the worst IPOs of 2015, and how you would have fared as an investor had you invested in Etsy shortly after the IPO.
  6. Personal Finance

    University Donations: Which Schools Got the Most

    A closer look at the staggering $40.3 billion donated to colleges and universities in 2015.
  7. Retirement

    Harry's Review: Is It Worth It?

    Find out if Harry's, the fast-growing, online purveyor of low-cost razor blades and shaving kits, is worth all of the hype in this review.
  8. Budgeting

    Manpacks Review: Is It Worth It?

    Find out if Manpacks, the fast-growing e-commerce subscription service for men's grooming products and underwear, is worth all the hype in this review.
  9. Investing

    Amazon Financing Now in the U.K.: Is America Next?

    Amazon has unveiled a great credit product in the U.K. Will America be the next country to have access to this financing option?
  10. Stock Analysis

    A Look Into Alibaba's Main Competitor: JD.com (BABA, JD)

    Read about China's two largest e-commerce companies, and learn about some operational developments that are slowly bringing the firms into closer competition.
RELATED FAQS
  1. What's the difference between microeconomics and macroeconomics?

    Microeconomics is generally the study of individuals and business decisions, macroeconomics looks at higher up country and ... Read Full Answer >>
  2. Does QVC charge sales tax?

    QVC, an American TV network, is registered with states to collect sales or use tax on taxable items. QVC is also required ... Read Full Answer >>
  3. Does Walmart take international credit cards?

    Foreign visitors to Walmart locations in the United States can use their credit cards issued by banks outside of the U.S. ... Read Full Answer >>
  4. Is QVC publicly traded? (QVCA, QVCB)

    QVC, Inc., is a wholly owned subsidiary of Liberty Interactive Corporation. It is attributed to the QVC Group tracking stock, ... Read Full Answer >>
  5. Student loans, federal and private: what's the difference?

    The cost of a college education now rivals many home prices, making student loans a huge debt that many young people face ... Read Full Answer >>
  6. How can I invest in electronic retailing (e-tailing)? (AMZN, W)

    Electronic retail is one of the fastest growing segments of the economy. Every year, more people are choosing to purchase ... Read Full Answer >>
Hot Definitions
  1. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  2. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  3. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
  4. Dark Pool Liquidity

    The trading volume created by institutional orders that are unavailable to the public. The bulk of dark pool liquidity is ...
  5. Godfather Offer

    An irrefutable takeover offer made to a target company by an acquiring company. Typically, the acquisition price's premium ...
Trading Center