Spending Power of the Teen Consumer - US - April 2008

Table of Contents

• 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
• 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 etter
  • 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 teebesity 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, ay 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, 2008b
• 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
• 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