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Spending Habits of the Teen Consumer - US - August 2011

This report builds on the analysis presented in Mintel’s Teens and Finance—U.S., January 2009, Spending Power of the Teen Consumer—U.S., April 2008, as well as the 2006 report of the same title and a previous edition published in 2004.

The focus of this report is the U.S. teen consumer aged 12-17. It examines teen spending and purchasing habits, what they shop for, spending priorities, what plans are for the summer, plans for attending and financing college, and teen attitudes toward finances.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data Sources
          • Sales data
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • Parents provide the majority of teen spending money
                        • High unemployment and lower median household income depresses teen spending
                          • Young adult employment at lowest measured levels
                            • Teen population will remain steady in the short term and expand thereafter
                              • Teens saving more than spending
                                • Stark gender differences characterize teen spending
                                  • Older teens more likely to spend on items away from home
                                    • Teen consumers favor mass merchandisers for purchases
                                      • Cash rules in teen buying, a challenge to online ordering
                                        • The vast majority of teens plan to go to college
                                        • Insights and Opportunities

                                          • Get parents on board with products geared toward teens
                                            • “Back to work” season
                                              • Upselling in a slowly improving economy
                                                  • Figure 1: Griffin Courier Clip for iPod Nano (6th Gen.), July 2011
                                                  • Figure 2: AMC Theatres Coca-Cola Float, July 2011
                                                • Hired teens may become brand ambassadors
                                                  • Digital teens demand instant connection
                                                    • Westfield offers mobile app
                                                        • Figure 3: Westfield smartphone app, screenshot, July 2011
                                                      • Sponsorship opportunities for high school events
                                                      • Inspire Insights

                                                          • Trend: Prepare for the Worst
                                                          • Teen Demographic Trends

                                                            • Key points
                                                              • Teen population growth relatively stagnant
                                                                • Figure 4: Population, by age, 2006-16
                                                              • Whites make up majority of teens, Hispanic teen population rapidly growing
                                                                  • Figure 5: Population, by race/ethnicity, ages 12-17 only, 2006-16
                                                              • Teen Spending Drivers

                                                                • Key points
                                                                  • High parental unemployment likely depresses teen spending
                                                                    • Figure 6: Unemployment, January 2007-July 2011
                                                                    • Figure 7: Families with an unemployed member, 2000-10
                                                                  • Median household income continues to decline
                                                                    • Figure 8: Median household income in inflation-adjusted dollars, 1999-2009
                                                                  • Highest income earners produce lowest number of teens
                                                                    • Figure 9: Median household income by race and Hispanic origin of householder, 2009
                                                                  • Young adult employment rate at lowest measured levels
                                                                      • Figure 10: Employment population-ratio, 16-24 year olds, July 2000-10, not seasonally adjusted
                                                                      • Figure 11: Employment population-ratio, 16-24 year olds, by gender and race/ethnicity, 2007-10, not seasonally adjusted
                                                                    • Not only are fewer teens working, but fewer teens are looking for work
                                                                      • Figure 12: Labor force participation rate, 16-24 year olds, by gender and race/ethnicity, 2007-10, not seasonally adjusted
                                                                    • Educational interest takes priority over summer jobs
                                                                      • Figure 13: Employment-population ratio and proportion enrolled in school, 16-19 year olds, summer 1989 to summer 2009
                                                                  • Teen Marketing Challenges

                                                                    • Key point
                                                                      • Regulating food advertising to teens
                                                                        • Other regulatory measures being considered
                                                                        • Spending Impact of the Teen Consumer

                                                                          • Key points
                                                                            • Teen allowance levels back to pre-recession totals
                                                                              • Figure 14: Total amount received annually by 12-17 year olds who get allowance/money for chores, 2006-10
                                                                            • Parents continue to give, give, give
                                                                                • Figure 15: Weekly allowance or spending money received and average amount, January 2006-December 2010
                                                                              • Fewer working teens earning far less in 2010 compared with pre-recession earnings
                                                                                  • Figure 16: Weekly earnings and average amount from working full- or part-time, January 2006-December 2010
                                                                                • Sidebar: Teen spenders remain stalwart during the recession
                                                                                  • Families with children spend more on food, education, clothing, insurance
                                                                                    • Figure 17: Average annual expenditures and characteristics, by consumer units with/without children, 2009
                                                                                • Innovations and Innovators

                                                                                  • Integrating music and shopping with “Shop Till You Rock”
                                                                                    • American Express introduces prepaid card linked to the bank of mom and dad
                                                                                        • Figure 18: American Express PASS Card, July 2011
                                                                                    • Marketing Strategies

                                                                                      • Overview of select brands with a teen audience
                                                                                        • Brand analysis: Apple
                                                                                          • Figure 19: Brand analysis of Apple
                                                                                        • Apple online
                                                                                          • Figure 20: Apple, Website, July 2011
                                                                                          • Figure 21: Apple, Website, July 2011
                                                                                        • Apple TV ads
                                                                                          • Figure 22: Apple iPad TV ad, 2010
                                                                                          • Figure 23: Apple iPod Nano TV ad, 2010
                                                                                        • Brand analysis: Coca-Cola
                                                                                          • Figure 24: Brand analysis of Coca-Cola
                                                                                          • Figure 25: Coca-Cola, Website, August 2011
                                                                                          • Figure 26: Coca-Cola, Website, July 2011
                                                                                        • Brand analysis: McDonald’s
                                                                                          • Figure 27: Brand analysis of McDonald’s
                                                                                        • McDonald’s online
                                                                                          • Figure 28: McDonald’s, Facebook, August 2011
                                                                                        • McDonald’s TV ads
                                                                                          • Figure 29: McDonald’s TV ad, 2011
                                                                                        • Brand analysis: JCPenney
                                                                                          • Figure 30: Brand analysis of JCPenney
                                                                                        • JCPenney online
                                                                                          • Figure 31: JCPenney Teen, homepage, 2011
                                                                                          • Figure 32: JCPenney Facebook page, July 2011
                                                                                        • Brand analysis: Payless ShoeSource
                                                                                          • Figure 33: Brand analysis of Payless/Brash
                                                                                          • Figure 34: Brash, screenshot, 2011
                                                                                      • Teens’ Primary Source of Spending Money

                                                                                        • Key points
                                                                                          • Parents provide the majority of teen spending money
                                                                                            • Figure 35: Primary source of spending money, May 2011
                                                                                          • Less than one in five teens’ spending money comes from working
                                                                                            • Figure 36: Primary source of spending money, by gender, May 2011
                                                                                          • Targeting younger teens
                                                                                            • Figure 37: Primary source of spending money, by age, May 2011
                                                                                          • Parents enable younger teens’ spending more than they do older teens
                                                                                            • Figure 38: Primary source of spending money, by gender and age, May 2011
                                                                                          • Sidebar: Keep families invested in teen spending
                                                                                          • Money Spent and Received Per Week

                                                                                            • Key points
                                                                                              • Teens not spending nearly as much as they’re making
                                                                                                • Figure 39: Average amount of money spent and received each week, by gender, May 2011
                                                                                              • Higher income among older teens makes them targets for big ticket items
                                                                                                • Figure 40: Average amount of money spent and received each week, by age, May 2011
                                                                                              • Young teen low-income earners are targets for small-dollar items
                                                                                                • Figure 41: Average amount of money spent and received each week, by gender and age, May 2011
                                                                                            • Top Ways Teens Spend Money

                                                                                              • Key points
                                                                                                • Stark gender differences characterize teen spending
                                                                                                  • Teen boys choose video games, movies, and savings for their spending money
                                                                                                    • Teen girls choose fashion, makeup, movies, and savings
                                                                                                      • Figure 42: Top ways to spend money, by gender, May 2011
                                                                                                    • Younger teens more likely to spend on items they can enjoy from home
                                                                                                      • Figure 43: Top ways to spend money, by age, May 2011
                                                                                                    • Older males most likely funding movies and restaurants
                                                                                                      • Figure 44: Top ways to spend money, by gender and age, May 2011
                                                                                                    • Sidebar: Teens, small electronics, and bigger-ticket items
                                                                                                        • Figure 45: Percentage of teens who own the following items, Feb. 21, 2011-March 14, 2011
                                                                                                    • Food and Snack Purchase Frequency

                                                                                                      • Key points
                                                                                                        • Low cost and convenience key among teen food/snack consumers
                                                                                                            • Figure 46: Purchase frequency of food/snacks by location, May 2011
                                                                                                          • Male teens prefer food on the go, while female teens will sit a little
                                                                                                            • Figure 47: Location for food/snack purchases at least once a month, by gender, May 2011
                                                                                                          • Older teens purchase food/snacks more often at fast-food restaurants
                                                                                                            • Figure 48: Location for food/snack purchases at least once a month, by age, May 2011
                                                                                                          • Older male teens core convenience consumer
                                                                                                            • Figure 49: Location for food/snack purchases at least once a month, by gender and age, May 2011
                                                                                                          • Sidebar: Keeping an eye on nutrition
                                                                                                          • Teen Shopping Venues and Attitudes Toward Fashion

                                                                                                            • Key points
                                                                                                              • Teen consumers favor mass merchandisers for purchases
                                                                                                                • Figure 50: Teens’ top retail stores where purchases made in the last four weeks, by age and gender, October 2009-December 2010
                                                                                                              • The importance of style
                                                                                                                • Figure 51: Teens’ attitudes toward clothing and fashion, by age and gender, October 2009-December 2010
                                                                                                              • Sidebar: Teen mall shoppers notice in-mall advertising
                                                                                                                • Figure 52: Teen mall shoppers’ mall advertising awareness*, 2009
                                                                                                            • Teens’ Primary Purchase Payment Method

                                                                                                              • Key points
                                                                                                                • Cash rules in teen buying
                                                                                                                    • Figure 53: Primary purchase payment method, by gender, May 2011
                                                                                                                    • Figure 54: Primary purchase payment method, by age, May 2011
                                                                                                                    • Figure 55: Primary purchase payment method, by gender and age, May 2011
                                                                                                                • Teens and Online Shopping

                                                                                                                  • Key points
                                                                                                                    • Online ordering among teen consumers grows
                                                                                                                      • Figure 56: Placed an online order in the last 12 months, items ordered and average amount spent, January 2006-December 2010
                                                                                                                    • Teen spending habits differ by gender
                                                                                                                      • Figure 57: Placed an online order in the last 12 months, items ordered and average amount spent, by gender, October 2009-December 2010
                                                                                                                    • More older teens shop online, spend more than younger teens
                                                                                                                      • Figure 58: Placed an online order in the last 12 months, items ordered and average amount spent, by age, October 2009-December 2010
                                                                                                                    • Sidebar: Growing online sales among teen audience
                                                                                                                    • Teens’ Summer Plans

                                                                                                                      • Key points
                                                                                                                        • School’s in for summer
                                                                                                                          • Summer travel means opportunities for marketing travel merchandise
                                                                                                                              • Figure 59: Summer plans, by gender, May 2011
                                                                                                                            • Summer as a time of independence
                                                                                                                              • Figure 60: Summer plans, by age, May 2011
                                                                                                                            • Older male teens do what they want, older female teens go to work
                                                                                                                              • Figure 61: Summer plans, by gender and age, May 2011
                                                                                                                          • Teens’ College Plans and Funding

                                                                                                                            • Key points
                                                                                                                              • The vast majority of teens plan to go to college
                                                                                                                                  • Figure 62: College plans, by key demographics, May 2011
                                                                                                                                • After dipping with recession, teens’ plans for college on the rise
                                                                                                                                  • Figure 63: College plans, by gender, 2006, 2008 and 2011
                                                                                                                                • Education on someone else’s dime?
                                                                                                                                  • Figure 64: College funding plans, by gender, May 2011
                                                                                                                                  • Figure 65: College funding plans, by age, May 2011
                                                                                                                                  • Figure 66: College funding plans, by gender and age, May 2011
                                                                                                                                  • Figure 67: Advertisement featuring scholarship opportunity, July 2011
                                                                                                                                • Minority respondents less likely to expect someone else to foot the bill
                                                                                                                                  • Figure 68: Funding college, by race/Hispanic origin, May 2011
                                                                                                                                • Sidebar: The question of college
                                                                                                                                • Teen Financial Attitudes

                                                                                                                                  • Key points
                                                                                                                                    • Teens get what they want, but still want more
                                                                                                                                      • Figure 69: Attitudes toward finances, by gender, May 2011
                                                                                                                                    • Older teens are keen on saving
                                                                                                                                      • Figure 70: Attitudes toward finances, by age, May 2011
                                                                                                                                    • Older female teens are most interested in saving
                                                                                                                                      • Figure 71: Attitudes toward finances, by gender and age, May 2011
                                                                                                                                    • Teen interest in saving grows through recession…
                                                                                                                                      • Figure 72: Attitudes toward money and savings, January 2006-December 2010
                                                                                                                                    • …as does negative perception of credit cards
                                                                                                                                      • Figure 73: Attitudes toward credit cards and debt, January 2006-December 2010
                                                                                                                                    • Teens from high-income families are the least comfortable with debt
                                                                                                                                      • Figure 74: Attitudes toward credit cards and debt, by gender/age and household income, October 2009-December 2010
                                                                                                                                  • Impact of Race and Hispanic Origin

                                                                                                                                    • Key points
                                                                                                                                      • Hispanic teens more likely to get allowance, less likely to get gifts
                                                                                                                                        • Figure 75: Primary source of spending money, by race/Hispanic origin, May 2011
                                                                                                                                        • Figure 76: Average amount of money spent and received each week, by race/Hispanic origin, May 2011
                                                                                                                                      • Hispanic teens allocate more spending money to movies and fashion
                                                                                                                                        • Figure 77: Top ways to spend money, by race/Hispanic origin, May 2011
                                                                                                                                      • Hispanic teens more likely to frequent all food venues
                                                                                                                                        • Figure 78: Purchase food/snacks location at least once a month, by race/Hispanic origin, May 2011
                                                                                                                                      • For Hispanic teens, cash is king
                                                                                                                                        • Figure 79: Primary purchase payment method, by race/Hispanic origin, May 2011
                                                                                                                                      • Hispanic teens hit the books during the summer months
                                                                                                                                        • Figure 80: Summer plans, by race/Hispanic origin, May 2011
                                                                                                                                      • Addressing Hispanic teens with the message of independence
                                                                                                                                        • Figure 81: Attitudes toward finances, by race/Hispanic origin, May 2011
                                                                                                                                      • Debt feared most by those least familiar with it
                                                                                                                                        • Figure 82: Attitudes toward credit cards and debt, by race/Hispanic origin, October 2009-December 2010
                                                                                                                                      • Sidebar: Marketing to Hispanic teens
                                                                                                                                      • Cluster Analysis

                                                                                                                                          • Spending Allowed
                                                                                                                                            • Characteristics
                                                                                                                                              • Opportunity
                                                                                                                                                • Earning Savers
                                                                                                                                                  • Characteristics
                                                                                                                                                    • Opportunity
                                                                                                                                                      • Lower Budgets
                                                                                                                                                        • Characteristics
                                                                                                                                                          • Opportunity
                                                                                                                                                            • Characteristics
                                                                                                                                                              • Figure 83: Teen consumer clusters, May 2011
                                                                                                                                                              • Figure 84: Primary source of spending money, by teen consumer clusters, May 2011
                                                                                                                                                              • Figure 85: Average amount of money spent and received each week, by teen consumer clusters, May 2011
                                                                                                                                                              • Figure 86: Primary purchase payment method, by teen consumer clusters, May 2011
                                                                                                                                                              • Figure 87: Summer plans, by teen consumer clusters, May 2011
                                                                                                                                                              • Figure 88: Attitudes toward finances, by teen consumer clusters, May 2011
                                                                                                                                                            • Demographics
                                                                                                                                                              • Figure 89: Teen consumer clusters, by gender, May 2011
                                                                                                                                                              • Figure 90: Teen consumer clusters, by age, May 2011
                                                                                                                                                              • Figure 91: Teen consumer clusters, by gender and age, May 2011
                                                                                                                                                              • Figure 92: Teen consumer clusters, by Hispanic origin, May 2011
                                                                                                                                                            • Cluster methodology
                                                                                                                                                            • Appendix—Trade Associations

                                                                                                                                                              Companies Covered

                                                                                                                                                              • Abercrombie & Fitch Co
                                                                                                                                                              • American Apparel & Footwear Association (AAFA)
                                                                                                                                                              • Apple, Inc
                                                                                                                                                              • Charles Schwab Corporation
                                                                                                                                                              • Coca-Cola Company (The) (USA)
                                                                                                                                                              • Consumer Electronics Association
                                                                                                                                                              • Federal Deposit Insurance Corporation
                                                                                                                                                              • Food and Drug Administration
                                                                                                                                                              • Google, Inc.
                                                                                                                                                              • J C Penney Company, Inc
                                                                                                                                                              • Kohl's Corporation
                                                                                                                                                              • Macy's, Inc.
                                                                                                                                                              • McDonald's Corporation
                                                                                                                                                              • National Retail Federation (NRF)
                                                                                                                                                              • Research In Motion (USA)
                                                                                                                                                              • Target Corporation
                                                                                                                                                              • U.S. Bureau of Labor Statistics
                                                                                                                                                              • US Department of Labor
                                                                                                                                                              • Victoria's Secret
                                                                                                                                                              • Walmart Stores (USA)
                                                                                                                                                              • Westfield Group

                                                                                                                                                              Spending Habits of the Teen Consumer - US - August 2011

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