Businesses Vie for $60-Billion Teen-Age Market
Comedian Jay Leno tells a joke about how a parent punished her teen-ager by sending him to his room.
Big mistake. The kid should have been sent to the parent’s room, a place devoid of the accouterments of youth, like CD boom boxes or high-tech sneakers.
Leno delivers the punch line in a TV commercial for tortilla chips, but as an increasing number of businesses are discovering, today’s teens are in a position to buy far more than snack foods. Controlling more cash than the thirtysomething set can imagine, many adolescents are downright affluent, and they’re making big-ticket purchases as never before.
“They’re not buying just fast food, soft drinks and dime-store makeup anymore,” said Peter Zollo, who heads Teenage Research Unlimited in suburban Chicago. They are “significantly more confident in their ability to buy big-ticket items than they were just one year ago,” he said.
Teen ownership of new cars is up 13% and used cars 9% over 1989, according to Zollo’s survey of more than 2,000 people 12 to 19.
Nearly half of teens own their own television sets, compared to 29% a decade ago, according to the New York market research firm Rand Youth Poll. It said 20% own video cassette recorders.
Gone are the days of $5-a-week allowances. Teens spent $55.9 billion last year just on day-to-day needs, such as food, clothing and entertainment, Rand said. The figure was $25.3 billion in 1975.
Michelle Moiger, a 16-year-old from New York’s Long Island, said most of her allowance and baby-sitting money goes toward “makeup and hair spray.”
But teens are also buying some of the family groceries -- $31.7 billion worth last year.
That hasn’t gone unnoticed by corporate America. Weight Watchers and Lean Cuisine, for instance, have begun advertising frozen entrees in youth magazines in hopes that teen-agers will pick up a box or two while shopping for the family.
“We know teen spending is becoming incredibly more important,” said Jane Fitzgibbon, senior vice president of the advertising agency Ogilvy & Mather’s TrendSights division.
Some experts speculate that two-income parents suffering guilt over long hours at work tend to be more generous when giving teens money. Others say that because couples are having fewer children, there’s simply more money to go around.
When it comes to earning power, demographics and economics have combined nicely for today’s teens. For one thing, there are fewer teens out there, which means more jobs available.
The number of Americans between 13 and 19 has fallen 15.5% since 1980 to 22.76 million, Rand said. Although the teen population is expected to be begin increasing in 1992, no substantial upturn will occur until the year 2000, it said.
“The changeover from a manufacturing to a service economy requires just the type of employee the teen-ager is,” said Rand President Lester Rand. “And some (teens) do get premium pay, because in many suburban areas there is a shortage of this type of personnel.”
McDonald’s Corp., for one, boasts that it is not a “minimum-wage employer.”
It is not unheard of for a high school student to bring in $100 to $300 a week for part-time work, Rand said.
Beyond their own spending, teens have an ability to influence the purchases of their parents.
“They are used as advisers to adults in the family to buy high-tech audio equipment--where they know a hell of a lot more than grown-ups--as well as vacations, automobiles and where (the family) goes to dinner tonight,” Fitzgibbon said.
Zollo’s survey said 57% of teens influenced the purchase of a personal computer this year, 69% influenced family vacation plans, 49% had a say in the car their families bought and 43% helped parents pick out a TV.
“We’re always very interested in the presence of children in the home,” said Daniel Infanti, a spokesman for Sharp Electronics Corp.
Not only do young people influence family purchases, they embrace the latest in technology.
“There are many adults out there who don’t know how to program a VCR, but they ask their 13-year-old son and he can,” Infanti said.
To reach the younger set, Sharp engages in promotions at sporting events--such as giving away company hats at baseball games--instead of contracting for print and television ads.
Apple Computer Corp. prefers giving kids hands-on experience instead of directing advertising at them. The company is the leading provider of computers to schools, from kindergarten to high school.
In a national promotion this year, students from 30,000 schools saved receipts from 40 supermarket chains to swap for Apple computers. More than 20,000 computers and 6,000 printers were awarded to the schools, said spokeswoman Mary Fallon.
Other companies that sell products that do not directly touch teen lives are advertising in teen magazines to begin instilling brand consciousness. Lenox china, for example, makes pitches in magazines aimed at teen-age girls, even though the wedding day is usually a long way off.
