The ongoing trade war has led to a 9% year-over-year increase in online apparel and accessory prices in July, making back-to-school shopping more expensive.
Back-To-School Apparel Prices Surge, Discounts Drop Sharply
A report first shared with CNN reveals that Klaviyo, a publicly listed customer relationship management firm, found an increase in average order values on 64% of apparel sites this back-to-school season. The firm also observed that discounts are lower by four percentage points compared to last year.
Jake Cohen, Klaviyo’s head of industry and insights, links the price hike to the ongoing trade war. “Tariffs have driven prices up. Brands are trying to create margin. The simplest way to do that is to raise prices,” Cohen told CNN.
Notably, Klaviyo's data shows a much larger increase compared to the Bureau of Labor Statistics, which reported a comparatively modest 2.7% year-over-year rise in overall prices for July.
Alberto Cavallo, a Harvard Business School professor, agrees with Klaviyo’s findings, stating that the 9% increase “doesn’t sound outrageous,” drawing on his research into the effects of tariffs on prices.
The report also indicated that prices for household appliances and furniture, essential for college students shifting into dorms and off-campus apartments, have risen by 6% and 5% respectively, from the pre-tariff trend.
Rising Prices Push Americans Toward Cheaper Shopping, BNPL
The surge in prices is forcing some Americans to change their shopping habits. Retail giant Walmart (NYSE:WMT) is responding to the tariff-induced inflation by doubling down on discounts, as middle and lower-income shoppers adjust their spending habits in response to higher prices.
Some of these adjustments include opting for cheaper brands, buying fewer supplies, and cutting back on household expenses like dining out. A July 2025 Credit Karma survey found 44% of parents plan to incur debt for back-to-school shopping, up from 34% last year. Nearly half are also worried about affording after-school programs and extracurricular activities, as per Americaprogress.org.
With the rising costs squeezing households, a record number of Americans are embracing ‘Buy Now, Pay Later’ loans for daily essentials, according to a recent survey by an online lending marketplace. The survey found that 41% of Americans considered using a BNPL loan in August — a 5% rise from July and the highest monthly level recorded since the firm began tracking the data in December 2021.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
