New Breed of Retailer Emerges to Tackle Tough Teen Market
NEW YORK, Nov. 17 /PRNewswire/ -- American retailers must react quickly to meet the challenges posed by history's largest group of teenagers, says a study by investment banker Ladenburg Thalmann.
According to the report, a new breed of marketer is serving this generation, which spends $80 billion annually and is expanding twice as fast as the general population. ''Youthquake -- the New Consumerism'' says few companies are reaching these demanding consumers, whose attitudes and shopping patterns are markedly different then their Predecessors.
''Today's teens are tough customers,'' says James Palczynski, the report's author. ''Public companies that understand them offer investors the potential to participate in the upside of a huge demographic shift.''
The study says today's teens, with unprecedented access to information and exposure to commerce, are sophisticated shoppers, seeking instant gratification and possessing a sense of material entitlement, yet very resistant to traditional marketing.
Seven years into a two-decade surge in teen population, which will peak in 2010 at the 30 million mark, the market is under-served. Few retailers have entered the segment since it suffered bankruptcies and store closings in the 1980s. The few that have emerged offer valuable lessons, the report says, citing a number of publicly traded teen-focused companies. Among the leaders are The North Face Inc. [Nasdaq:TNFI], an apparel maker that has capitalized on interest in extreme sports; Vans Inc. [Nasdaq:VANS] and Quiksilver Inc. [Nasdaq:QUIK], which parlayed their identification with skating and surfing into broad product lines; and Hot Topic, Inc. a retailer that uses music as a retail concept. Also well positioned are companies offering alternative distribution channels, like direct marketer dElia's.
To emulate these companies, retailers must reach out to teens who are more diverse, more responsible for household buying decisions and more independent than their Baby Boomer parents. In particular, the report found that teens respond to:
*strong brands, which provide both a vehicle for individuality and a seal of approval;
*customer service, with hospitable shopping environments of critical importance;
*hot trends, which hold the key to mastering the merchandise mix that keeps teens returning.
''Ultimately, retailers must step forward aggressively to pursue this market,'' says Mr. Palczynski. ''The only questions are which retailers will benefit from this new consumerism and which will ignore it and miss their chance with this dynamic generation.''
To obtain a copy of the Youthquake report, contact Jamie A. Glaser at Ladenburg Thalmann, telephone 212-409-2592.
Established in 1876, Ladenburg Thalmann & Co. Inc. is a full-service investment bank, engaged in corporate investment banking, institutional sales and trading, research, individual private client sales and asset management. Based in New York, Ladenburg Thalmann also has offices in Boston, Cleveland, Boca Raton, Ft. Myers and Las Vegas.
SOURCE: Ladenburg Thalmann & Co., Inc. |
