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Spending Power of the Teen Consumer - US - April 2008

SCOPE AND THEMES
What you need to know
Definition
Data sources
Spending data
Consumer survey data
Abbreviations and terms
Terms
EXECUTIVE SUMMARY
Changing composition of U.S. teens
Parents a major source of teen spending money
More evidence of a slowdown in spending
Leisure spending reserved for mostly lifestyle items, entertainment
Teen spending affects mainstream trends
Teens are enamored with electronics
Teens are engaged in non-traditional digital media
INSIGHTS AND OPPORTUNITIES
Market products designed for “green” teens
Green is the right thing to do
Green is the new black
Create a viable third zone designed exclusively for teens
Current teen hangouts aren’t cutting it
A place of their own
Use social networks to interact intimately with teens
MySpace and Facebook are forces to be reckoned with
FAST FORWARD TRENDS
User Generated Content
What's it about?
What we've seen
Specifics
Figure 1: Internet sites/retailers teens likely to visit/buy from, February 2008
Implications
MARKET BACKGROUND
Key points
Number of teens declining
Figure 2: Population, by age, 2002-12
Figure 3: Households with children under age 18 present, 2001-06
Teens become more racially and ethnically diverse
Figure 4: Population, by race/ethnicity, age 12-17 only, 2003-13
Figure 5: Population, by race and Hispanic origin, 2003-13
Figure 6: Median household income, by race of householder, 2002-06
Fewer jobs mean less money
Figure 7: Trends in summer employment rates of teens, 2000-06
College plans impact spending habits for some
Figure 8: Whether teens plan to go to college, by gender, 2006 and 2008
Figure 9: How teens plan to pay for college, 2006 and 2008
TEENS, MONEY AND INCOME
Key points
Teen spending expected to decline through 2012
Figure 10: Total U.S. teen spending at current prices, 2002-12
Figure 11: Total U.S. teen spending at inflation-adjusted 2007 prices, 2002-12
More than half of teens receive allowance, but jobs pay much better
Figure 12: Teens’ sources of spending money, by gender and age, May 2006-June 2007
Figure 13: Weekly amount for allowance/doing chores, by gender and age, May 2006-June 2007
Figure 14: Weekly salary before taxes, by gender and age, May 2006-June 2007
TEENS AND BANKING
Key points
Savings accounts the most popular financial instrument among teens
Figure 15: Teen ownership of financial instruments, summary, February 2008
Younger girls are strong savers
Figure 16: Teens’ saving account balances, by gender and age, February 2008
Teens are realistic about credit and debt
Figure 17: Teens’ attitudes towards debt and credit cards, by gender and age, May 2006-June 2007
Financial institutions make it easier for teens to spend
WHAT TEENS SPEND MONEY ON
Key points
Clothing and music top the list
Figure 18: How teens spend allowance money, 2005 and 2007
Clothing makes the teen
Teens like coffee, too
Leisure reading on the decline
Figure 19: Percentage of teenagers who read almost every day for fun, November 2007
 TEENS AND MUSIC
Teens are dictating music industry’s next steps
Teens want their music, but they don’t necessarily want to pay for it
Growth of downloads outpacing CD sales
Figure 20: Forms of music bought in last 12 months, 2005 and 2007
Teens want to choose their music à la carte
Figure 21: Number of music downloads bought in last 12 months, 2005 and 2007
Industry must find a middle ground to address file sharing
What does this mean for the music industry?
Teens respond to vinyl records
TEEN SHOPPING TRENDS
Key points
Incidence of spending on selected categories
Figure 22: Incidence of spending on selected categories in last 12 months, by gender and age, February 2008
Clothing the most common source of spending for teen girls
Fast food the most common purchase for boys
Over a third of teens have paid for their mobile phone or phone bill
Likelihood of buying from selected clothing brands/retailers
Figure 23: Clothing brands/retailers teens likely to buy from, by gender and age, February 2008
Siblings Old Navy and Gap looking to sharpen image
Teen boys favor Levi’s and Old Navy
Pink capitalizes on the popularity of loungewear as outerwear
Teen girls favor specialty stores across a range of price points
Likelihood of shopping selected shoe brands/retailers
Figure 24: Shoe brands/retailers teens likely to buy from, by gender and age, February 2008
Six out of ten teens are likely to buy Nike
Adidas and Reebok team up
Teens appreciate saving money on shoes
Likelihood of shopping selected personal care retailers
Figure 25: Personal care retailers teens likely to buy from, by gender and age, February 2008
Specialty retailers resonate with teen girls
Walgreens tops the list of retailers favored by teen boys
Likelihood of shopping selected discount retailers
Figure 26: Discount retailers teens likely to buy from, by gender and age, February 2008
Teens value the savings and one-stop shopping appeal of Wal-Mart and Target
Teen girls are more likely to favor a wider variety of retailers
LEISURE TIME SPENDING OCCASIONS
Key points
Fast food
Figure 27: Fast food outlets teens likely to buy from, by gender and age, February 2008
At least eight out of ten teens are likely to buy from McDonald’s
Teens aren’t all about burgers
Dunkin’ Donuts might be able to capitalize on popularity of coffee drinks among more price-sensitive teens
Obesity concerns may affect future teen behavior
Movies
Teens are most frequent moviegoers
Figure 28: Frequent (at least once per month) moviegoers by age group, 2002-06
Movies catering to a younger audience report strongest sales
Figure 29: Top 10 grossing films, by domestic box office and rating, 2007
Online shopping
Figure 30: Internet sites/retailers teens likely to visit/buy from, by gender and age, February 2008
Most likely Internet destinations are not retailer sites
More than half of teens are likely to buy from iTunes site
TEENS AND ELECTRONICS
Key points
Teen ownership of selected electronics
Out with the old, in with the newest technology
Figure 31: Teen ownership of selected electronics, 2002-07
Teen ownership of portable MP3 players
Figure 32: Teen ownership of MP3 players, by race/ethnicity, May 2006-June 2007
Stark differences in MP3 player ownership by race/ethnicity
Teens might not be buying MP3 players for themselves, but they are willing to
Popularity of iPod benefits market as a whole
Figure 33: Brand of MP3/digital media player owned, May 2006-June 2007
MP3 players in schools
Teen ownership of mobile phones
Keeping in touch is essential
Mobile phone ownership on the rise among teens of all races/ethnicities
Figure 34: Incidence of teens owning mobile phones, by race/ethnicity, 2002, 2005 and 2007
Teens likely on family plans
Smartphones for teens new trend
Mobile phones crowding out ownership of digital phones among teens
Figure 35: Digital camera sales, 2003-08
Teen ownership of video game consoles
Video games moving beyond the teen realm
MEDIA AND ADVERTISING
Key point
Introduction
Television ads need an edge to catch teens’ attention
Boost Mobile
Figure 36: Boost Mobile television ad, 2008
FiveStar Flex Binder
Figure 37: Five Star Flex Binder television ad, 2008
Fly Fusion Pentop Computer
Figure 38: Fly Fusion Pentop Computer television ad, 2008
Helio Ocean
Figure 39: Helio Ocean television ad, 2008
Nike 6.0 Sports Shoes
Figure 40: Nike 6.0 Sports Shoes television ad, 2008
Panasonic, Ecko Unlimited, and Vans
Figure 41: Panasonic Digital Camera television ad, 2008
Figure 42: Ecko Unlimited Footwear television ad, 2008
Figure 43: Vans Sports Shoes television ad, 2008
SOCIAL NETWORKS
Key points
Social networks are integral to teen life
Figure 44: U.S. Online social network advertising spending, by type of network, 2007-08, May 2007
Figure 45: U.S. Online social network advertising spending, 2006-11, March 2008
Popularity of social networks spawns new advertising techniques
Widgets
Recruiting brand advocates
Profile branding
Online video integrates advertiser messages in new ways
Sponsored video
Branded video
TEEN SPENDING—BY KEY CONSUMER CLUSTERS
Methodology
Key points
Miss Big Spender
Average male spender
Junior low spenders
Cluster distribution and demographics
Figure 46: Teen spending clusters, February 2008
Figure 47: Teen spending clusters, by gender, February 2008
Figure 48: Teen spending clusters, by age, February 2008
Figure 49: Teen spending clusters, by gender and age, February 2008
Methodology
APPENDIX: OTHER USEFUL CONSUMER TABLES
Respondent profile
Figure 50: Demographic profile of teens surveyed, February 2008
Household demographics of teen respondents
Figure 51: Demographics of households with teens aged 12-17, May 2006-June 2007
Trended data
Figure 52: Discount retailers teens likely to buy from, 2006 and 2008
APPENDIX: TRADE ASSOCIATIONS

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