School peer pressure's effect on your wallet

Eric Chemi | Mark Fahey

Published 7:04 AM ET Wed, 5 Aug 2015 Updated 2:42 PM ET Wed, 5 Aug 2015 CNBC.com

Back-to-school times two 1:35 PM ET Wed, 5 Aug 2015 | 01:13

Back-to-school shopping doesn't seem to ever end. Turns out if you buy too much now, you might be wasting your money, having to chase trends later once school starts.

New shopping data provided to CNBC shows that the back-to-school buying season has two peaks. The first peak is the obvious one, before school starts as people prepare to go back. But it's the second peak that you have to watch out for, the one that occurs after classes have begun.

That's because so many kids, succumbing to peer pressure, have to go back and chase the styles they missed out on during their summer shopping.

The data comes from Cardlytics, a card-linked marketing firm. The private firm has $170 million in funding, backed by investors such as Discovery Capital and Polaris Venture Partners. Cardlytics has agreements with major national retailers, along with financial institutions including Bank of America, PNC, Regions Bank and Lloyds.

The data shows an obvious spike in August, and then the second "oh shoot, my clothes just aren't going to win me a spot at the cool kids table" spike in September.

"Intuitively, this effect makes sense if you consider how sensitive students are to their peers." -Lynne Laube, co-founder of Cardlytics

The September peak is specifically for online apparel shopping. The trend is predictable and has been happening for a few years now. "We believe this second wave in apparel purchases reflects in part students responding to the new trends they're observing at school," said Lynne Laube, the president and co-founder of Cardlytics. Laube also described changing search queries in Google and that their hypothesis was validated by advertisers. "Intuitively, this effect makes sense if you consider how sensitive students are to their peers."

The problem for retailers is the second peak only exists online, not in stores. "Parents are too busy to visit multiple stores as they had before school began," said Laube. Also more importantly, they've gotten the information they need. "Parents are more familiar with apparel sizing and thus more confident to buy online."

If retailers know this is going to happen, shouldn't they be doing something about it, rather than losing all those sales to online purchases? "Retailers should drive awareness of their e-commerce site among in-store customers," said Laube, "and highlight convenience factors like free shipping, easy in-store returns, and larger inventories." Finally, Laube also advised retailers to "extend Back to School ads and promotions online to capture shoppers who are shopping online longer."

The second peak doesn't exist for basic supplies like shoes and sporting goods. The data shows that those purchases get locked down in August—and that's it. Once school begins, there isn't as much trend-chasing going in these categories.

Cardlytics' data shows that as soon as the month of August hits, a distinct spike up in shopping occurs. That's exactly where we are on the calendar now. Back to school has officially begun. Before you blow your entire budget this month, be careful to note that you'll probably have to buy more clothes next month once school has started.