Grown-Up Kids

An explosion in the youth market challenges retailers to think "small."

By Bessie Nestoras and Sarah Krall -- Gifts & Decorative Accessories, 1/1/2001

Most people born before 1975 will agree that, when they were children, they didn't have much say when it came to their clothing and lifestyle purchases. Mom and dad had the final word, and, more often than not, if you had older siblings, you inherited their belongings-everything from outgrown cribs to castoff clothes.

That simply isn't the case today.

As we enter the 21st century, parents are using their healthy supply of disposable income to give their children possessions that they didn't necessarily have while growing up. As we went to press, a Newsweek report expressed shock over celebrities buying their charges $865 Gucci diaper bags, and over less famous citizens emulating such conspicuous consumption.

Meanwhile, pop culture is obsessing over every exploit of Britney Spears, the Backsteet Boys, and 'N Sync. This has to do with the fact that the tween population (7-to-14-year-olds) is currently about 27 million strong. One study gauges this demographic's estimated annual spending power at more than $21 billion, while another study, which includes youths up to age 19, reports that this tween and teen group spent a whopping $129 billion in 1999. Additionally, according to Entrepreneur magazine, tweens influence a gargantuan $300 billion in annual family spending on everything from computers to cars.

A New Playing Field

And don't expect this fixation on the young to change anytime soon. According to the Census Bureau, 70.2 million Americans (26 percent of the population) were under the age of 18 in 1999. This is partially due to the fact that the annual U.S. birth rate exceeded four million every year from 1989 to 1993 (a rate that hadn't occurred since the early 1960s). Many industry observers feel that, just as our culture followed the whims of the Baby Boomers as they aged, we will soon hang on the tastes of Generation Y (people born between 1977 and 1997). And Generation Y is a breed apart-fickle, computer savvy, and unable to imagine a world without remote controls, let alone the Internet.

Retailers may get lost in the shuffle if they don't start reacting to the myriad signs of this explosion. In High Point this past October, the Show-place exhibition center unveiled Showplace Kids, a 30,000-square-foot exhibit area devoted exclusively to children's furniture. Across the board, large chains are expanding and modifying their juvenile sections. Pottery Barn has established a catalog just for kids' merchandise. More than 2,500 Wal-Marts recently unveiled the fashion-forward Mary-Kate and Ashley line of apparel and accessories for children aged 6 to 14. Toy monolith FAO Schwarz is targeting tween boys and girls with special areas called FAO University and FAO Girl, respectively. In fall 2000, a McDonald's promotion featured CDs and video premiums highlighting favorite tween stars. Meanwhile, magazines like Vogue, Cosmo, and People have launched tween- and teen-targeted editions.

Inside the Industry

Within the gift and decorative accessory industry, manufacturers are also taking notice of the boom and are planning to add juvenile product to their existing lines, if they haven't already.

"We've always had product aimed at kids," said Pam Brady, director of product development at Enesco, Itasca, Illinois. "We are looking to do more in this area, and that's how Congo Kids [a new line of kids' furniture and accessories with a jungle theme] came about."

When creating product for the juvenile market, the most important thing to remember is that the merchandise must be visually appealing to kids. "I have a philosophy that others don't follow: Think like a child," said Tinalyn Caisse-Marsten, owner of Pipsqueaks Children's Handcrafted Furniture in Petaluma, California. "A lot of times, things are made and painted to attract the parent. But you should look at the end user; it is the child who will be using it. It's tough to do this as a retailer, but you have to risk it."

Because of this new focus on the child, youthful tastes are taken into account during the design process, according to Steve Spaduzzi, director of product acquisitions at CBK in Union City, Tennessee. "I think children are more involved in the purchase now than they ever have been. You might choose a child's chair that's a bit of a different color or orientation or finish because you know the child is going to key into it, as opposed to the parent, who's got more of a sophisticated taste."

Spaduzzi adds that, in many ways, children are a much easier target, because they're a lot more impulsive. "Their attention span is a lot less, so they're going to choose things that immediately appeal to them, without a whole lot of concern as to the function, whether they need it, where they're going to put it, how much it costs, and whether it coordinates with anything they already have." He concludes, "If you can sell them quickly, you've got it made."

Bringing Up Baby

Parents have the most say as to what their children wear and how their rooms are decorated until the children enter kindergarten. That is the point at which kids start being influenced by their peers, voicing their demands, and impacting sales. Craig Helmholz, vice president of sales and marketing at plush manufacturer Purr-fection by MJC in Tualatin, Oregon, advises playing it safe with this dicey segment of the juvenile market by remembering that parents are attracted to quality, safety, and value, while children are drawn by look and feel.

As a retailer, you will want to stock a variety of product for children in your store. You should start with giftable baby products that a child can grow with. Make sure they're safe, affordable, and have a certain degree of staying power. "Congo Kids has a wide age range that it can appeal to," said Brady of Enesco. "We didn't make the line so 'baby,' so it can go from infant to about 6 or 7."

The kind of price range you opt for will be dictated by your clientele. According to The Wall Street Journal, the demand for baby and child luxury products is increasing because many parents are now well into their 30s and 40s when they have their first child, and thus have achieved a certain level of success, making such expensive purchases possible.

Also, multimillionairedom is more widespread than ever. In the past decade, the number of families with a net worth of over $1 million has reached five million, and demographers predict that the total will reach 20 million by 2010. For the first time, these nouveau riches aren't congregating in privileged enclaves like Beverly Hills or the Upper East Side-they're everywhere, including your neighborhood.

The Tween Scene

Industry viewpoints vary as to what the low end of the tween range really is, but for our purposes a child becomes a tween when he starts developing his own taste and demanding appropriate product. For the most part, once children have reached the age of seven, they know what they like and what they don't like.

In their tender years, children's desires are tied in with anything that's cool-things that their older siblings have, things that they see on TV shows like Dawson's Creek and Popular. MTV's Total Request Live is also a good place to start; it's a favorite of tweens and teens because they determine the content.

You can use these programs and the magazines mentioned above as a guide. But it's also a good idea to go right to the source. Ask teens what you should be looking for when you scout out new product. If you have teenage employees, ask them what they and their friends are talking about.

You can always look to larger companies' baby and general lines to see what they're presenting to the different market segments. "Throughout Enesco, we have product to cover all ages," comments Enesco's Brady. "For the tween market, we have a home line called Candid Expressions. We are looking to focus more on this market, to include things for their room, to make it more personalized."

As an added plus, the infantilization of women's fashion has helped to blur the line between the tastes of grown-ups and that of little girls, and this phenomenon has overlapped onto other product areas as well. As children become more sophisticated and adults more childlike, the middle ground increases, as do the chances of appealing to both segments. For example, many tween and teen picks-such as animal prints-appeal to Generation Xers as well.

Making It Work for You

Not all merchandise is for everyone. Tween and teen selections, in particular, are trend-driven and tend to have short shelf lives. This generation is promotion savvy and able to communicate and sift through information fast (think of instant online messages and TV channel flipping). Because of this, today's teens and tweens respond to pitches involving humor and/or irony. Two successful Generation Y slogans are Sprite's "Image is nothing. Obey your thirst." and Arizona Jeans' "Just show me the jeans."

Even within the juvenile market, you must determine whether items will be purchased as gifts by friends or grandparents, by parents shopping by themselves, or by parents shopping with the children (they tend to spend more with child in tow).

Spaduzzi feels that retailers shouldn't jump into unfamiliar areas just because they are doing well. "Depending on the space that you have in the store, you're always going to have to be making choices in terms of what product categories you're going to carry," he points out. "I think it's really relative to your market. [The juvenile market as a whole] is a very important growing category, but you have to choose your merchandise according to the market you're targeting."