DISCUSSION TOPIC: Kids Without Cash
In the past it has seemed as though teens had an inexhaustible supply of cash. Whether it was from part-time jobs, money from the Bank of Mom and Dad, birthday, graduation, gifts, etc. – kids were out and spending.
Now, it seems, even indefatigable teens and their wannabes (tweens) are cutting back due to a lack of funds. The costs of products that kids buy are going up with everything from gas to a slice of pizza to jeans at prices this generation has never seen before.
According to a piece by USA Today, teen hiring has been down five percent since March of last year. The same report noted that some economists believe this could be the worst year for teen spending since the early 1990s.
Same-store sales at retailers targeting teens were down 0.5 percent last year compared to increases of 3.3 percent in 2006 and 12.1 percent in 2005, according to figures from the International Council of Shopping Centers and UBS.
Discussion questions: How acutely affected are teens and tweens by the current state of the economy? How important are teen and tween dollars to retailers? How should retailers be adapting to current conditions to maintain the link they have with these consumers?
How parents communicate to their kids impacts those kids’ reaction to all societal topics: drugs, sex, violence, and certainly the economy and responsible financial decision-making. The current economic situation provides parents with a terrific opportunity to teach valuable life lessons regarding thrift, savings, value, and prioritization.
Certainly the simple fact that parents have cut back allowances and other funding methods has led to less teen spending. The lower the family is on the economic ladder, the more acutely this is felt. Those lost dollars are of great import across many parts of the retail landscape including convenience and grocery stores, quick-serve restaurants and of course, teen and tween apparel and accessory stores. Retailers must focus on their own value proposition, be it price, quality, service, social networking, etc., and should not start focusing on price if that hasn’t been their calling-card. Stick to your niche – this economic valley too shall pass.
Mike Osorio, your Dare to be Contagious! TM strategist
Go to the full discussion at RetailWire.com:
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