STORES Magazine - June 2008 - (Page T4)

TA K I N G O N teens t T either fit in or express their individuality. While retailers such as Steve & Barry’s, Old Navy, American Apparel, H&M and Zara are not included on the chart (in part, because their businesses do not target teens exclusively), each attracts teen shoppers and derives a percentage of revenue from them — or their parents. Then there’s the online channel. While retailers recognize that traditional stores remain the venue where the lion’s share of teens’ transactions occur, they acknowledge that a lot of shopping journeys start online. The challenge for retailers is to be sure that their websites reflect the brand personality and store identity and strengthens their connection with teen customers. Now, as if an ever-changing shopper base with constantly evolving expectations were not enough, teen specialty retailers find themselves under the same economic stress as their department store, massmerchant and big-box brethren. With rising gas and food prices grabbing a bigger share of the household budget, ripple effects are being felt throughout the family. In April, Piper Jaffray published the results of a national study conducted by senior research analyst Jeff Klinefelter and a collaborative team of research analysts. The study found that total teen spending on fashion declined nearly 20 percent on a year-to-year basis, and overall spending was down 15 percent for young men and 11 percent for juniors (young women). Transition phase he findings indicate that the fashion category represents 41 percent of the total teen budget and, while teenagers continue to spend a significant amount of money, this budget allocation is low compared with past years. “We’re currently in the ‘transition phase’ of the fashion cycle and believe that we have not yet hit bottom,” Klinefelter says. “The current economic challenges are impacting consumers at all income levels and ages, indicated by the historic low level of average planned spending in the fashion category this spring.” And retailers that cater to teens need to be wary of some demographic shifts on the horizon. In most instances teens are defined as those ages 12 to 19; according to the U.S. Census Bureau, 33.5 million young people fall under this heading, but their numbers are expected to decline 3.3 percent by 2010. By comparison, the number of Americans ages 25 to 34 is expected to rise 5.2 percent over the same period. Meanwhile, on the opposite end of the spectrum, the Census Bureau is reporting some four million births per year. These T4 STORES / JUNE 2008 t T figures show why retailers are salivating over both the 30year-old demographic and the pint-sized set. Purchasing insight hough Piper Jaffray’s 15th semi-annual teen spending survey yielded some sobering data, it also provided valuable insights into purchasing behavior and brand preference across multiple categories. Nearly 700 students from 11 U.S. cities were surveyed through mall field trips, classroom visits and online questionnaires. Piper Jaffray also captured an additional 4,500 online survey responses through the national DECA organization, which partnered with the retail research team for the seventh time. Among the key findings: Hollister remains the No. 1 preferred brand by teens, as ranked by mindshare, followed by Pacific Sunwear, Volcom, Quicksilver, Zumiez, American Eagle, Abercrombie & Fitch and Forever 21. There’s been an increase in spending from fall 2007 among teen girls in the beauty category. In addition, privately-held, Swedish-based IKEA was the top choice among teens (followed by Pottery Barn/PB Teen) in the home furnishings or cataloger category. Electronics represented 7 percent of Hollister total budget (10 percent for young men, 4 percent for juniors), up from 6 percent last year. Spending by young men in the video game system category rose to 13 percent from 9 percent last fall. In the digital media category, 86 percent of students with MP3 players own some form of an iPod. Although iTunes continues to dominate the music download market (81 percent), 61 percent of the students surveyed indicated they download music illegally. In addition, 6 percent of students own an iPhone – and 9 percent expect to buy one in the next six months. Though Starbucks continued to be the clear brand leader across the board in both the school and online surveys, premium coffee is potentially a growing category among teens: Dunkin Donuts appeared in the top 10 brands for the first time in the school survey. Chipotle continues to gain teen market share, ranking among the top 10 brands in the online survey for the first time. In total, approximately 45 percent of students said they spent more money at restaurants in the past year than in the previous year. m M Online awareness andy Putnam, vice president of TNS Retail Forward, a global management consulting and market research firm, has studied teens’ relationship with online WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of STORES Magazine - June 2008

STORES Magazine - June 2008 Contents Executive Editor's Page President's Page Tesco Tests Carbon Labels What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Cover Story: Boom - or Bust Green Retailing Concept2Watch Online Marketing Building Traffic Water Management Branding Digital Marketing Loyalty Programs Special Report: Taking on Teens Supply Chain - Robo Crop Human Resources Supply Chain - Directory Assistance Loeb Retail Letter Arts Update Point of View NRF News Retail Crossword Retail Industry Calendar Last Laugh

STORES Magazine - June 2008

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