When teenage twins Maggie and Rachel Wronko, 14, want to buy clothes, they let their mom, Kris Ann, know it’s time to head to their favorite stores—Hollister, Forever 21, PINK and Kohl’s.
“We get texts and emails from the stores,” Rachel says.
“And we get sponsored things on social media like, ‘Oh, we’re having a sale, come shop’!” Maggie adds, saying they see the ads on Instagram, Twitter and Pinterest.
This is typical of today’s young consumers. Tweens, who range in age from 8 to 12, and teens command $75 billion of discretionary spending, according to Piper Jaffray’s Spring 2015 Teen Survey. But they’re also value conscious.
“Teens want brands and hot products, but they’re so agile online they know how to find or wait for the discount,” says Strategic Mindshare’s founder and president Cynthia Cohen. “They know how to enter a product on a site that tells them when it will go on sale. Or they play games to win a discount. As much as parents want to save—because they’re paying for everything from tutors and lessons to the big college bills—the kids know how to do it better than anybody else.”
The majority of teens (57 percent) shop for apparel on sale, according to the Cotton Incorporated Lifestyle Monitor Survey. While 40 percent buy their clothes on impulse, which is higher than the average consumer (33 percent), 60 percent plan their purchases. According to the Lifestyle Monitor, three in four teens prefer their clothes to be cotton-rich, and nearly three in four (73 percent) say better quality garments are made from natural fibers like cotton.
Some experts say teens and tweens became more money conscious because post-recession parents cut back on household spending or because fewer jobs were available to teens themselves. But Cohen says teens are decreasing the amount they spend on apparel for other reasons.
“If teens save money on their apparel, they can spend more on other things,” she says. “A young teen female might wear a cheap top from Forever 21 with a Louis Vuitton bag. Teens can also buy more electronics, pay their cell phone bill, spend more on entertainment or a night out.”
The Piper Jaffray survey found teens increasingly prefer to take part in “shareworthy” experiences, like dining out.
This means teen apparel stores are likely to discount more often. ShopperTrak founder Bill Martin says he expects teen apparel retailer’s to discount their offerings 5 to 10 percent more this Back-to-School season than a year ago.
That would be welcome news to the Wronko twins’ mother.
“I do look for [a good] price because I have three children and they’re all girls and I look for quality,” she says. “But I also look for style because sometimes the styles are a little too old for their age. There are times I tell them, ‘Uh, I don’t think so,’ because I think it’s a little too provocative.”
Abercrombie & Fitch is one of the stores that used sexualized marketing to promote its product. This past spring, A&F announced it was terminating the use of scantily clad models and suggestive marketing. And in a move to be more inclusive, the company said nearly two years ago that it would add plus-sizes online, although larger sizes aren’t offered on every item or highlighted with a category link on the A&F site.
Last week, A&F reported second quarter sales were down 4 percent, which was actually better than forecast. Sales were down 8 percent in the first quarter of the year. Sales at A&F’s Hollister brand were healthier, declining just 1 percent, compared to 6 percent in the first quarter.
Sales were also down for American Apparel, which reported a second quarter decrease of 17.2%, leading the company to note it might be headed for closure. And Aeropostale reported net sales decreased 17 percent, although the company held a better outlook for the third quarter.
Conversely, the sales reports contained positive news for fellow teen retailers American Eagle Outfitters and Urban Outfitters. AEO saw sales increase 11 percent, attributed largely to its women’s Denim X jeans and for Flex denim for men, as well as tighter inventory controls that allow it to react more quickly to trends. Urban Outfitter saw a 7 percent climb in total net sales, also as a result of inventory controls, as well as investments in e-commerce.
Cohen says the standard teen industry players have had market share taken due to the influx of international brands like Uniqlo, Topshop, Joe Fresh and online retailer ASOS, not to mention fast fashion giants H&M and Forever 21. She adds that online stores are cannibalizing brick and mortar because teens find the e-commerce discounts or cherry pick items from one site to the next, rather than buy multiple items from one store.
“Cherry pickers go online and shop a variety of stores because they didn’t have to park the car and walk three blocks,” Cohen states. “They’re also not in store picking up other items.”
On average, teens spend about $65 on apparel each month, according to the Lifestyle Monitor data. Teens buy most of their clothes at chain stores (20 percent), mass merchants and specialty stores (19 percent), and department stores (13 percent). While specialty stores remain a top channel, teen shopping at these venues has declined from 27 percent in 2010.
Cohen says retailers will have to work hard to keep up with today’s plugged in, digitally savvy teens and tweens.
“Stores need to work on their e-commerce—especially, social media commerce. That’s growing significantly and kids live on social,” Cohen says. “Retailers should look at stores within stores, like how we see Topshop in Nordstrom. Or limited-time, in-store pop ups. Or pop ups like Target did in Bryant Park for the Lilly Pulitzer collaboration. Retailers need to be exciting to grab the younger consumer’s attention. Right now, the world of social media, all the digital technologies and the small screens are making geriatric and boomer retailers scramble—fast.”
This article is one in a series that appears weekly on sourcingjournalonline.com. The data contained are based on findings from the Cotton Incorporated Lifestyle Monitor Survey, a consumer attitudinal study, as well as upon other of the company’s industrial indicators, including its Retail Monitor and Supply Chain Insights analyses. Additional relevant information can be found at CottonLifestyleMonitor.com.