Children's Clothing - US - February 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Industry could use a boost
Figure 1: Total US sales and fan chart forecast of children’s clothing, at current prices, 2011-21
Figure 2: Percentage change over prior year for US sales of children’s clothing at current prices and birthrates, 2011-14
Companies need to get the basics right
Figure 3: Top five shopping frustrations, October 2016
Department stores face more competition
Figure 4: Select retailers shopped, October 2016
The opportunities
Consider family targeting approach
Figure 5: Role of children and other shopping preferences, by gender, October 2016
Help parents understand what’s in style
Figure 6: Attitudes toward style, by gender, race, and Hispanic origin, October 2016
Alternative channels poised for growth
Figure 7: Attitudes and behaviors regarding alternative channels, by household income, October 2016
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Sales tick slowly upward
Nearly half of sales for girls’ clothing
Under 12 population grows, but minimally
Modern day families look different than yesteryear’s
Clothing market at large is soft
MARKET SIZE AND FORECAST
Moderate sales expected for the next few years
Figure 8: Total US sales and fan chart forecast of children’s clothing, at current prices, 2011-21
Figure 9: Total US sales and forecast of children’s clothing, at current prices, 2011-21
MARKET BREAKDOWN
Girls’ clothing accounts for the most sales
Figure 10: Total estimated US retail sales and forecast of children’s clothing, by segment, at current prices, 2011-21
Figure 11: Total estimated percentage of US retail sales of children’s clothing, by segment, at current prices, 2016
Active sportswear remains an opportunity
Figure 12: Percentage of girls’ clothing expenditures by type, 2015
MARKET FACTORS
Population of kids grows slightly as multicultural composition expands
Figure 13: Boys and girls population by age group, 2012-22
Figure 14: Percentage change of population, age 11 and under, by race and Hispanic origin, 2012-17
Millennials are now parents
Birthrates may be turning around
Figure 15: Number of births by year, 2006-15
Households with children are declining
Figure 16: Percentage of households, by presence of related children, 2006-16
Changes in parenting dynamics have impact
Delayed childbirth
More single parents
Figure 17: Percentage of parents with children under age 18 in the household, by living arrangement, 2016
Figure 18: Living arrangements of children under age 18, by race and Hispanic origin, 2016
Obesity lingers as a major issue
Incomes improve for family households
Figure 19: Median household income of families with related children, in inflation-adjusted dollars, 2004-14
Other macroeconomic factors are also positive
Clothing market at large sees softness
KEY PLAYERS – WHAT YOU NEED TO KNOW
New brand launches suggest market vitality
Sector remains highly promotional
Remember the basics while creating some news
Let kids be kids
WHAT’S WORKING?
2016 saw a few new launches indicating strength in the market, but sector remains highly promotional
Figure 20: Carter’s, email ads, December 2016
Figure 21: The Children’s Place, email ad for PLACE cash, December 2016
Figure 22: Target, direct mail catalog pages for Cat & Jack, August 2016
Figure 23: Old Navy, email ad for “Instant Happy” sweepstakes, November 2016
Figure 24: Zulily, mobile ad (left) and online ad (right), November and March 2016
WHAT’S STRUGGLING?
Parents are frustrated by lack of sizes, variety, and quality
Figure 25: Shopping frustrations, October 2016
Some retailers continue to face challenges
WHAT’S NEXT?
Pink and blue are for girls and boys
Gender-neutral clothing becoming a more common theme
Figure 26: Attitudes toward gender-neutral kids’ clothing, by generation, October 2016
Is there opportunity for the luxury market in childrenswear?
New customer service models
THE CONSUMER – WHAT YOU NEED TO KNOW
Wardrobe staples rank on top as sleepwear emerges
Pre-owned marketplace on fire
Most parents shop at mass merchandisers, department stores, or specialty clothing stores
Parents want their kids to be cute and stylish
Subscription services not an immediate threat
ITEMS PURCHASED
Everyday wear items like T-shirts and jeans rank on top
Figure 27: Items purchased, October 2016
Welcome to the pajama party
Figure 28: Items purchased for girls, by age, October 2016
Figure 29: Items purchased for boys, by age, October 2016
METHOD OF ACQUIRING
Pre-owned clothing more popular for younger children
Figure 30: Method of acquiring, October 2016
Acquirement method mainly impacted by age of child, number of children, and household income
Age of child
Figure 31: Method of acquiring, by age of child, October 2016
Figure 32: Method of acquiring, by gender of child, October 2016
Number of children
Figure 33: Method of acquiring, by number of children under 18 in the household, October 2016
Household income
Figure 34: Method of acquiring, by household income, October 2016
Resale marketplace continues to thrive
Parents’ thoughts on pre-owned kids’ clothing
Open-minded
Skeptics
RETAILERS SHOPPED
Mass merchandisers and department stores are parents’ preferred places to shop . . . for now
Figure 35: Retailers shopped, October 2016
Figure 36: Opinions regarding in-store vs online shopping, by generation and gender, October 2016
Age of child influences choice of store(s)
Figure 37: Retailers shopped, by age of child, October 2016
Generational differences play a role as well
Figure 38: Top retailers shopped, by generation and Hispanic Millennials, October 2016
In their words
Favorite stores and brands
Boycotted stores/brands
SHOPPING PROCESS
Nearly half of moms are loyal to a few favorite stores
Figure 39: Shopping behaviors related to where to shop, by generation and gender, October 2016
Always seeking deals, even at the point of purchase
Figure 40: Shopping behaviors related to seeking value, by generation and gender, October 2016
Parents shop year-round for clothes
Figure 41: When clothes are purchased, by generation and gender, October 2016
In their words
Planned approach
Impulse approach
Combo approach
SHOPPING ATTITUDES AND BEHAVIORS
Why pay a lot when they will just outgrow the clothes?
Figure 42: Attitudes toward price, by household income, October 2016
Price – In their words
“Dressing the part” is important, especially for Blacks and Asian parents
Figure 43: Attitudes toward style, by gender, race, and Hispanic origin, October 2016
Style – In their words
Important
Not that important
Subscription services not a big market, but interest improves
Figure 44: Interest in subscription services, by key demographics, October 2016
Parents share advice with each other
CHARACTER AND CELEBRITY INFLUENCE
Kids want to emulate their favorite characters
Figure 45: Purchase behaviors regarding character and celebrity influence, by gender and age, October 2016
Figure 46: Popular characters, November 2015
I see, you see, we all see emoji
Parents on character clothing
CHILDREN’S INFLUENCE AND INVOLVEMENT
Dual-pronged targeting strategy warranted
Figure 47: Role of children in shopping process, by generation and gender, October 2016
In their words
What do kids think?
Figure 48: Children’s attitudes toward fashion – Agree, April 2015-June 2016
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Consumer qualitative research
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms
APPENDIX – MARKET
Sales data
Figure 49: Total US sales forecast of children’s clothing, at inflation-adjusted prices, 2011-21
Figure 50: Total estimated US retail sales forecast of infant/toddler clothing, at current prices, 2011-21
Figure 51: Total estimated US sales forecast of infant/toddler clothing, at inflation-adjusted prices, 2011-21
Figure 52: Total estimated US sales forecast of boys’ clothing, at current prices, 2011-21
Figure 53: Total estimated US sales forecast of boys’ clothing, at inflation-adjusted prices, 2011-21
Figure 54: Total estimated US retail sales forecast of girls’ clothing, at current prices, 2011-21
Figure 55: Total estimated US sales forecast of girls’ clothing, at inflation-adjusted prices, 2011-21
Figure 56: Total estimated US retail sales of children’s clothing, by segment, at current prices, 2014 and 2016
Figure 57: Percentage of boys’ clothing expenditures by type, 2015
Figure 58: Percentage of infants’ clothing expenditures by type, 2015
Other market factors
Figure 59: Population by age, 2012-22
Figure 60: Distribution of population, by age and race/Hispanic origin, 2016
Figure 61: Population by race and Hispanic origin, 2012-22
Figure 62: Population by generation, 2012-22
Figure 63: Estimated annual expenditures on clothing by married-couple families, by household income group and age group of child, overall US, 2015
Figure 64: Estimated annual expenditures on clothing by single-parent families, by household income group and age group of child, overall US, 2015
Figure 65: Annual births and fertility rate, 2003-14
Figure 66: Births and fertility rates, by race and Hispanic origin, 2003-14
Figure 67: Households, by presence and ages of own children, 2016
Figure 68: Percentage of births to unmarried women, 2000-14
Figure 69: Percentage of youth with overweight or obese BMI, by age, gender and race/Hispanic origin, 2011-2012
Figure 70: Median household income, by race/Hispanic origin of householder, in inflation-adjusted dollars, 2005-15
Figure 71: Consumer confidence and unemployment, 2000-16*
Figure 72: US gasoline and diesel retail prices, 2007-16
Figure 73: GDP change from previous period, Q1 2007-Q3 2016
Figure 74: Disposable Personal Income change from previous period, 2007-October 2016
Figure 75: Percentage of public schools requiring students to wear uniforms, by school level, 1999-00 – 2013-14 academic year
Figure 76: Percentage of private schools requiring students to wear uniforms, by school level, 2003-04 – 2011-12 academic year
APPENDIX – KEY PLAYERS
Figure 77: Carter’s, email ad for Let it Sparkle sweepstakes, December 2016
Figure 78: The Children’s Place, email ad for My Place rewards, December 2016
Figure 79: Old Navy, email ad, December 2016
APPENDIX – CONSUMER
Figure 80: Purchase incidence for children’s clothing, footwear, any accessories, April 2015-June 2016
Figure 81: Age of child that clothing, accessories, or footwear was purchased for, April 2015-June 2016
Figure 82: Mean amount spent per item, by age of child, April 2015-June 2016
Figure 83: Select stores shopped in past month, April 2015-June 2016
Figure 84: Select favorite stores among kids 6-11, April 2015-June 2016
Figure 85: How often kids 6-11 get to shop at their favorite stores, April 2015-June 2016
Figure 86: Popular characters for children, by age of children in household, August 2015
Figure 87: Percentage of kids 6-11 that receive an allowance, April 2015-June 2016
Figure 88: Source of income other than allowance, April 2015-June 2016
Figure 89: Weekly amount earned through allowance/jobs, April 2015-June 2016
Figure 90: What own money is spent on, April 2015-June 2016