Spending Habits of the Teen Consumer - US - August 2011

SCOPE AND THEMES
What you need to know
Definition
Data Sources
Sales data
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Parents provide the majority of teen spending money
High unemployment and lower median household income depresses teen spending
Young adult employment at lowest measured levels
Teen population will remain steady in the short term and expand thereafter
Teens saving more than spending
Stark gender differences characterize teen spending
Older teens more likely to spend on items away from home
Teen consumers favor mass merchandisers for purchases
Cash rules in teen buying, a challenge to online ordering
The vast majority of teens plan to go to college
INSIGHTS AND OPPORTUNITIES
Get parents on board with products geared toward teens
“Back to work” season
Upselling in a slowly improving economy
Figure 1: Griffin Courier Clip for iPod Nano (6th Gen.), July 2011
Figure 2: AMC Theatres Coca-Cola Float, July 2011
Hired teens may become brand ambassadors
Digital teens demand instant connection
Westfield offers mobile app
Figure 3: Westfield smartphone app, screenshot, July 2011
Sponsorship opportunities for high school events
INSPIRE INSIGHTS
Trend: Prepare for the Worst
TEEN DEMOGRAPHIC TRENDS
Key points
Teen population growth relatively stagnant
Figure 4: Population, by age, 2006-16
Whites make up majority of teens, Hispanic teen population rapidly growing
Figure 5: Population, by race/ethnicity, ages 12-17 only, 2006-16
TEEN SPENDING DRIVERS
Key points
High parental unemployment likely depresses teen spending
Figure 6: Unemployment, January 2007-July 2011
Figure 7: Families with an unemployed member, 2000-10
Median household income continues to decline
Figure 8: Median household income in inflation-adjusted dollars, 1999-2009
Highest income earners produce lowest number of teens
Figure 9: Median household income by race and Hispanic origin of householder, 2009
Young adult employment rate at lowest measured levels
Figure 10: Employment population-ratio, 16-24 year olds, July 2000-10, not seasonally adjusted
Figure 11: Employment population-ratio, 16-24 year olds, by gender and race/ethnicity, 2007-10, not seasonally adjusted
Not only are fewer teens working, but fewer teens are looking for work
Figure 12: Labor force participation rate, 16-24 year olds, by gender and race/ethnicity, 2007-10, not seasonally adjusted
Educational interest takes priority over summer jobs
Figure 13: Employment-population ratio and proportion enrolled in school, 16-19 year olds, summer 1989 to summer 2009
TEEN MARKETING CHALLENGES
Key point
Regulating food advertising to teens
Other regulatory measures being considered
SPENDING IMPACT OF THE TEEN CONSUMER
Key points
Teen allowance levels back to pre-recession totals
Figure 14: Total amount received annually by 12-17 year olds who get allowance/money for chores, 2006-10
Parents continue to give, give, give
Figure 15: Weekly allowance or spending money received and average amount, January 2006-December 2010
Fewer working teens earning far less in 2010 compared with pre-recession earnings
Figure 16: Weekly earnings and average amount from working full- or part-time, January 2006-December 2010
Sidebar: Teen spenders remain stalwart during the recession
Families with children spend more on food, education, clothing, insurance
Figure 17: Average annual expenditures and characteristics, by consumer units with/without children, 2009
INNOVATIONS AND INNOVATORS
Integrating music and shopping with “Shop Till You Rock”
American Express introduces prepaid card linked to the bank of mom and dad
Figure 18: American Express PASS Card, July 2011
MARKETING STRATEGIES
Overview of select brands with a teen audience
Brand analysis: Apple
Figure 19: Brand analysis of Apple
Apple online
Figure 20: Apple, Website, July 2011
Figure 21: Apple, Website, July 2011
Apple TV ads
Figure 22: Apple iPad TV ad, 2010
Figure 23: Apple iPod Nano TV ad, 2010
Brand analysis: Coca-Cola
Figure 24: Brand analysis of Coca-Cola
Figure 25: Coca-Cola, Website, August 2011
Figure 26: Coca-Cola, Website, July 2011
Brand analysis: McDonald’s
Figure 27: Brand analysis of McDonald’s
McDonald’s online
Figure 28: McDonald’s, Facebook, August 2011
McDonald’s TV ads
Figure 29: McDonald’s TV ad, 2011
Brand analysis: JCPenney
Figure 30: Brand analysis of JCPenney
JCPenney online
Figure 31: JCPenney Teen, homepage, 2011
Figure 32: JCPenney Facebook page, July 2011
Brand analysis: Payless ShoeSource
Figure 33: Brand analysis of Payless/Brash
Figure 34: Brash, screenshot, 2011
TEENS’ PRIMARY SOURCE OF SPENDING MONEY
Key points
Parents provide the majority of teen spending money
Figure 35: Primary source of spending money, May 2011
Less than one in five teens’ spending money comes from working
Figure 36: Primary source of spending money, by gender, May 2011
Targeting younger teens
Figure 37: Primary source of spending money, by age, May 2011
Parents enable younger teens’ spending more than they do older teens
Figure 38: Primary source of spending money, by gender and age, May 2011
Sidebar: Keep families invested in teen spending
MONEY SPENT AND RECEIVED PER WEEK
Key points
Teens not spending nearly as much as they’re making
Figure 39: Average amount of money spent and received each week, by gender, May 2011
Higher income among older teens makes them targets for big ticket items
Figure 40: Average amount of money spent and received each week, by age, May 2011
Young teen low-income earners are targets for small-dollar items
Figure 41: Average amount of money spent and received each week, by gender and age, May 2011
TOP WAYS TEENS SPEND MONEY
Key points
Stark gender differences characterize teen spending
Teen boys choose video games, movies, and savings for their spending money
Teen girls choose fashion, makeup, movies, and savings
Figure 42: Top ways to spend money, by gender, May 2011
Younger teens more likely to spend on items they can enjoy from home
Figure 43: Top ways to spend money, by age, May 2011
Older males most likely funding movies and restaurants
Figure 44: Top ways to spend money, by gender and age, May 2011
Sidebar: Teens, small electronics, and bigger-ticket items
Figure 45: Percentage of teens who own the following items, Feb. 21, 2011-March 14, 2011
FOOD AND SNACK PURCHASE FREQUENCY
Key points
Low cost and convenience key among teen food/snack consumers
Figure 46: Purchase frequency of food/snacks by location, May 2011
Male teens prefer food on the go, while female teens will sit a little
Figure 47: Location for food/snack purchases at least once a month, by gender, May 2011
Older teens purchase food/snacks more often at fast-food restaurants
Figure 48: Location for food/snack purchases at least once a month, by age, May 2011
Older male teens core convenience consumer
Figure 49: Location for food/snack purchases at least once a month, by gender and age, May 2011
Sidebar: Keeping an eye on nutrition
TEEN SHOPPING VENUES AND ATTITUDES TOWARD FASHION
Key points
Teen consumers favor mass merchandisers for purchases
Figure 50: Teens’ top retail stores where purchases made in the last four weeks, by age and gender, October 2009-December 2010
The importance of style
Figure 51: Teens’ attitudes toward clothing and fashion, by age and gender, October 2009-December 2010
Sidebar: Teen mall shoppers notice in-mall advertising
Figure 52: Teen mall shoppers’ mall advertising awareness*, 2009
TEENS’ PRIMARY PURCHASE PAYMENT METHOD
Key points
Cash rules in teen buying
Figure 53: Primary purchase payment method, by gender, May 2011
Figure 54: Primary purchase payment method, by age, May 2011
Figure 55: Primary purchase payment method, by gender and age, May 2011
TEENS AND ONLINE SHOPPING
Key points
Online ordering among teen consumers grows
Figure 56: Placed an online order in the last 12 months, items ordered and average amount spent, January 2006-December 2010
Teen spending habits differ by gender
Figure 57: Placed an online order in the last 12 months, items ordered and average amount spent, by gender, October 2009-December 2010
More older teens shop online, spend more than younger teens
Figure 58: Placed an online order in the last 12 months, items ordered and average amount spent, by age, October 2009-December 2010
Sidebar: Growing online sales among teen audience
TEENS’ SUMMER PLANS
Key points
School’s in for summer
Summer travel means opportunities for marketing travel merchandise
Figure 59: Summer plans, by gender, May 2011
Summer as a time of independence
Figure 60: Summer plans, by age, May 2011
Older male teens do what they want, older female teens go to work
Figure 61: Summer plans, by gender and age, May 2011
TEENS’ COLLEGE PLANS AND FUNDING
Key points
The vast majority of teens plan to go to college
Figure 62: College plans, by key demographics, May 2011
After dipping with recession, teens’ plans for college on the rise
Figure 63: College plans, by gender, 2006, 2008 and 2011
Education on someone else’s dime?
Figure 64: College funding plans, by gender, May 2011
Figure 65: College funding plans, by age, May 2011
Figure 66: College funding plans, by gender and age, May 2011
Figure 67: Advertisement featuring scholarship opportunity, July 2011
Minority respondents less likely to expect someone else to foot the bill
Figure 68: Funding college, by race/Hispanic origin, May 2011
Sidebar: The question of college
TEEN FINANCIAL ATTITUDES
Key points
Teens get what they want, but still want more
Figure 69: Attitudes toward finances, by gender, May 2011
Older teens are keen on saving
Figure 70: Attitudes toward finances, by age, May 2011
Older female teens are most interested in saving
Figure 71: Attitudes toward finances, by gender and age, May 2011
Teen interest in saving grows through recession…
Figure 72: Attitudes toward money and savings, January 2006-December 2010
…as does negative perception of credit cards
Figure 73: Attitudes toward credit cards and debt, January 2006-December 2010
Teens from high-income families are the least comfortable with debt
Figure 74: Attitudes toward credit cards and debt, by gender/age and household income, October 2009-December 2010
IMPACT OF RACE AND HISPANIC ORIGIN
Key points
Hispanic teens more likely to get allowance, less likely to get gifts
Figure 75: Primary source of spending money, by race/Hispanic origin, May 2011
Figure 76: Average amount of money spent and received each week, by race/Hispanic origin, May 2011
Hispanic teens allocate more spending money to movies and fashion
Figure 77: Top ways to spend money, by race/Hispanic origin, May 2011
Hispanic teens more likely to frequent all food venues
Figure 78: Purchase food/snacks location at least once a month, by race/Hispanic origin, May 2011
For Hispanic teens, cash is king
Figure 79: Primary purchase payment method, by race/Hispanic origin, May 2011
Hispanic teens hit the books during the summer months
Figure 80: Summer plans, by race/Hispanic origin, May 2011
Addressing Hispanic teens with the message of independence
Figure 81: Attitudes toward finances, by race/Hispanic origin, May 2011
Debt feared most by those least familiar with it
Figure 82: Attitudes toward credit cards and debt, by race/Hispanic origin, October 2009-December 2010
Sidebar: Marketing to Hispanic teens
CLUSTER ANALYSIS
Spending Allowed
Characteristics
Opportunity
Earning Savers
Characteristics
Opportunity
Lower Budgets
Characteristics
Opportunity
Characteristics
Figure 83: Teen consumer clusters, May 2011
Figure 84: Primary source of spending money, by teen consumer clusters, May 2011
Figure 85: Average amount of money spent and received each week, by teen consumer clusters, May 2011
Figure 86: Primary purchase payment method, by teen consumer clusters, May 2011
Figure 87: Summer plans, by teen consumer clusters, May 2011
Figure 88: Attitudes toward finances, by teen consumer clusters, May 2011
Demographics
Figure 89: Teen consumer clusters, by gender, May 2011
Figure 90: Teen consumer clusters, by age, May 2011
Figure 91: Teen consumer clusters, by gender and age, May 2011
Figure 92: Teen consumer clusters, by Hispanic origin, May 2011
Cluster methodology
APPENDIX—TRADE ASSOCIATIONS