Big-spending teens are retailers' dream

Chelsea Kuball reads Vogue, spends hundreds of dollars a month at the mall and shops online for clothes and accessories she can't find at stores so she'll stand out.

Her favorite find of late was a $500 Jill Stuart dress that was on sale.

“I'll find a dance for this dress,” she says.

She's an impulsive shopper with a sense of style and a thing for sales, a retailer's dream, and she's only 14.

Chelsea, an incoming high school freshman who lives in Brentwood, Tenn., with her parents, an older brother, two dogs and a cat, is part of a generation of teenagers who spent an estimated $179 billion last year on everything from Steve Madden shoes to Madden NFL 07 video games.

Last year, teen spending was up almost 13 percent from the year before, and it's likely to climb higher this year, according to TRU, a market research firm in Northbrook, Ill., that has helped clients from Abercrombie & Fitch to Yahoo get a handle on teen shoppers.

Spending clout is major

On average, teenage boys spend 26 percent of their money on clothes, shoes and accessories; 20 percent on CDs, DVDs and gadgets; and 16 percent on food, according to a survey of teen spenders by investment bank Piper Jaffray & Co.

Teenage girls spend 57 percent of their money on fashion — dresses, jeans, shoes and makeup among the purchases.

With no mortgages or college loans to pay off, teens “have a tremendous amount of spending power,” said Scott Krugman, a spokesman with the National Retail Federation. “Retailers recognize this, and they'd be foolish not to market to them.”

Hollister — the No. 1 clothing brand for teens according to the Piper Jaffray survey — offers a free “jukebox” on its site, hollisterco.com, with songs by Albert Hammond Jr., The New Loud and other artists parents probably haven't heard of.

American Eagle Outfitters, No. 2 on Piper Jaffray's most-popular list, has begun producing three-minute episodes of “It's a Mall World,” an original series that plays on MTV and streams on American Eagle's Web site, ae.com.

Some of the characters on the show get their clothes at American Eagle.

“I think a lot of teens will appreciate that,” said Betty Chen, vice president of equity research with Wedbush Morgan Securities, based in Los Angeles. “It is a fresh, innovative way to market yourself.”

Chains seek teen ‘buzz'

Chains are trying to attract teens through “buzz” marketing, what an earlier generation called word of mouth.

“We tell (our teenage customers) to get out there and push it,” said Korbie Rinehart, manager of the Ecko Unlimited store at Opry Mills Mall in Nashville, Tenn., which counts on teens for about half its business. “Word of mouth is the best way we've advertised so far.”

Word-of-mouth marketing is what led 13-year-old Jessica Stevens of Franklin to spend $200 on MAC Cosmetics. She's liked the brand ever since trying her friend's makeup.

“I kind of want to have their approval,” Jessica said of her friends. “We all tend to dress alike. ... It boosts our confidence.”

Not to be ignored

Sometimes teens just want a little respect before they spend their dollars.

Last weekend, 14-year-old Bailey Sharpe and her friends rushed into an accessories store in the CoolSprings Galleria mall in Franklin, Tenn., piling on four bracelets on their arms as they danced around the store and tried on sunglasses. A store employee glared at them.

Clerks at other stores barely acknowledged them.

“They're not very helpful,” said Bailey, who didn't buy anything at the stores. “They're a little rude.”

Retailers will need to cater more to teens' needs if they want teens' money, said Ann Fairhurst, University of Tennessee professor in retail and consumer sciences.

“Many times, sales associates might not see the teen customer as a real customer, and that really turns the teens off,” Fairhurst said. “They don't want to be ignored and treated indifferently.”

Source : www.theithacajournal.com