Big retailers seek teens (and parents)

 

Jayne O'Donnell and Erin Kutz

USA Today
April 14, 2008

 

Having lost shoppers to hip specialty shops, department stores are reinventing themselves to attract both adults and their style-minded children.

J.C. Penney, Macy's, Bloomingdale's, Saks Fifth Avenue and Kohl's are all adopting approaches — from celebrity-designed fashions to mobile marketing to better fitting rooms — to try to lure young shoppers without turning off their parents.

With consumers cutting back on spending, many retailers have decided the best way to recapture them is to deliver a more cutting-edge experience and trendier clothing to attract their kids. The reasoning: Even as parents tighten their belts, they still spend freely on their children. If kids can get their parents to drive them to stores, the parents will end up shopping for themselves, too.

Middle-class teens, it turns out, represent a fairly recession-proof demographic, with outsize influence on household purchases.

That thinking has led J.C. Penney, long known as "my mom's store," to overhaul its teen merchandising, introduce new brands and redesign its teen departments. The retailer, which slashed its first-quarter earnings forecast by a third late last month and last week posted a larger-than-expected 12.3% March sales drop, will announce the changes today. Many of its rivals are taking similar steps, though the 106-year-old Penney chain, with its core clientele of middle-age and older shoppers, faces an especially stiff challenge and is making the biggest push.

While Penney says it commands the biggest share of the market for 13- to 20-year-old girls and women, CEO Mike Ullmann acknowledges his stores are most popular with teens until they get their own driver's license and credit card. At that point, Penney tends to lose them — until they grow up and return with kids of their own.

"With the teens, we have to capture them with a brand and a look," says Mike Boylson, Penney's chief marketing officer.

Today, teens influence up to an estimated 90% of grocery and apparel purchases, according to studies by digital marketing agency Resource Interactive. Even beyond their sway over household budgets, teen buyers, with their willingness, even eagerness, to spend, are highly sought-after consumers in their own right.

That's especially true in a shaky economy that's cut into sales at most retailers. Exhibit A: the success of Aéropostale, Urban Outfitters and some other youth-oriented specialty shops, which have been outperforming stores that cater more to older shoppers.

Penney, like other department stores, faces an uphill battle. By virtue of its size, it commands a huge share of the teen market, ranking first among mall-based stores for teens, according to market research firm TRU. But TRU trends director Rob Callender notes that those studies ask teens where they shop most often — not where they like to shop most often. Unless it can forge the kind of loyalty from teens enjoyed by such specialty stores as Abercrombie & Fitch and Forever 21, Penney will remain a destination that teens will follow their parents to, not one they'll seek out.

If drawing teens is crucial to gaining both the youth and adult crowds, some retailers face an institutional problem, too: Department stores can feel too physically unwieldy for teenagers, says Dan Hill of research firm Sensory Logic: "It's very hard to hug a giant."

Some teens may even eschew department-store shopping as a way to distance themselves from their parents, says Leon Schiffman, a marketing professor at St. John's University in Queens, N.Y.

"It's somewhat of a natural process to reject the kinds of retail environments that your parents are associated with," Schiffman says.

That can frustrate parents. Wendy Queal of Hutchinson, Kan., says her 15-year-old son and 12-year-old daughter are "addicted" to American Eagle Outfitters and also favor Abercrombie & Fitch and Hollister.

"They like the stores with the loud music playing when they go in," Queal says. "They both told me to not buy them things from Dillard's anymore, which is where I have always bought a majority of their clothes. At this point in their lives, their shopping tends to be all about the name."

Well aware of this, Penney executives are stressing its brands' names — not its company name — much as Oldsmobile did years ago, when it began introducing trendier cars. Penney last month announced an exclusive new apparel line, Fabulosity, designed by reality TV star and former model Kimora Lee Simmons. In July, it will launch another brand, Decree, which Boylson says is "more updated than Abercrombie … with the same look, same feel, at half the price."

The clothes will be sold in departments with better lighting and more displays showing how to wear different outfits. (Penney's research found teens were seeking more fashion guidance from stores.) Apparel will be divided into different "lifestyles," ranging from wholesome active wear to hip city styles.

The Decree brand will be marketed "as if it's a national brand," Boylson says. "We don't beat them over the head with J.C. Penney."

The teen psyche

Youths are among the few categories of shoppers who seem comfortable spending freely these days. Other factors driving the interest in the teen market:

•Teens say they're closer with their families than the previous generation, Gen X, said at the same age, according to TRU. A recent TRU survey found that nine out of 10 teens say they're "close" to their parents; 75% agreed they "like to do things with their family"; and 59% say family dinners are "in."

•Teens are their households' de facto technology officers. They set up iPods and iPhones, troubleshoot PCs and spend hours with cellphones and social-networking sites. These 24/7 modes of rapid-fire communication allow teens — as well as brand marketers — to ignite interest in shopping trends faster than ever.

An informal USA TODAY survey of its panel of shoppers found teens are quick to name small specialty stores, such as American Eagle, as favorites. But they're habitually inconsistent.

John Crouch of Charleston, W.Va., says his 15-year-old daughter, Elizabeth, loves Delia's, American Eagle and Aéropostale. Yet, in the past two years, she's also become a fan of Penney and says it's now stylish. How about Sears? No way. Crouch says Elizabeth calls Sears' apparel "old ladies' clothing."

Schiffman says Bloomingdale's and other upscale department stores appeal to teens because their assortments and atmospheres are superior. "If you offer enough," he says, "you can get teens to go anywhere. J.C. Penney and Sears are just not pulling that."

But Adriene Solomon, like Elizabeth Crouch, disagrees, stressing the other side of the Penney story.

Seeing Penney as hip

"My children love to shop at the 'trendy' stores: Hollister, Aéropostale, Abercrombie & Fitch, Wet Seal, Journeys, Champs (Sports) and any other tennis shoe store," says Solomon of Missouri City, Texas. "They most definitely don't like to shop at the top department stores like Macy's and Dillard's, but they will shop at J.C. Penney," because its styles seem trendy.

Roland Solomon, 15, says he'd go to Penney even if his mom weren't driving there, because he likes their jeans and shirts.

Yet, even the label "teen" is fraught with contradictions. A 13-year-old shopper bears little resemblance to a teen heading to college — at which point, says retail brand consultant Ken Nisch, high school posturing suddenly seems uncool.

"Things like resale gets to be a big trend in college, because there's more sense that it's not OK to show off what you have too much," Nisch says. "You might have needed an 'outfit' to go to high school, but when you go to college, God forbid if you have an 'outfit.' That means you're trying too hard."

LittleMissMatched, which sells brightly colored and patterned socks, loungewear and other apparel, finds that sales drop once kids head to college. They don't want to draw as much attention to clothes or to be viewed less seriously, says co-founder Arielle Eckstut.

But teen shoppers do want to look as if they know how to dress. Like Penney, the young women's apparel store Dots is redesigning stores to provide more fashion guidance. The retail design and branding firm FRCH, which is handling the redesign, is using splashy graphics and style tips. The goal, says managing creative director Steve McGowan, is to establish an "emotional connection" with shoppers.

"It's retail theater," McGowan says.

But how to reach the elusive teens in the first place?

"Newspaper and direct mail are useless against teens, and TV is not very effective," Boylson says. "Teens are much more in the digital space."

Several retailers are using social-networking sites as marketing tools. They're creating store profile pages, just the way teenagers build personal pages. H&M's boasts 60,000 "fans" — Facebook users who add a link to the H&M page on their own profile pages.

Some of the retail pages include photo albums of the store's seasonal collections and let fans upload photos of themselves wearing the store's clothing. Others provide podcasts of interviews with designers and links to virtual dressing rooms. And they send e-mails alerting fans to sales and discount codes.

American Eagle, which has nearly 30,000 fans, has a Facebook page. So do Hollister, Target, Forever 21 and Abercrombie & Fitch.

Facebook is "such a game-changer," says Dave Hendricks of Datran Media, which helps brands reach online consumers. "Facebook allows retailers to create a more viral experience. The tastemakers among youth spend all of their time in social media."

Penney is targeting teens through ads in theaters, interactive website features and mobile marketing.

"Teens know when they're being marketed to, so you have to be very careful," Boylson says.

Nor can you change their perceptions overnight.

"We understand it's about getting them to love the brands — not just J.C. Penney," says Liz Sweney, Penney's EVP for women's and girls' apparel.