Teens Have Money, Willingness to Spend It, Authors Say
September 21, 2003
Michael Aguilar, a 14-year-old from Peoria, Illinois, is a good representative of the Millennials.
That’s not a pop group. Rather it’s a label for the market segment that comprises the most numerous, affluent and ethnically diverse generation in American history, according to Neil Howe and William Strauss, authors of “Millennials Rising,” a book about the generation born in the 1980s and 1990s.
“The Millennials are a consumer behemoth, riding atop a new youth economy of astounding scale and extravagance. These days, kids have cash and know what to do with it,” said the authors.
Aguilar knows what to do with his money. The Richwoods High School freshman recently purchased a 35 mm camera at Peoria Camera Shop in Metro Centre that cost $350.
“Two hundred dollars of that was mine I earned from mowing lawns this summer,” he said, adding that his mother made up the difference. “I shopped around (before buying the camera). I did a lot of research,” said Aguilar, who recently joined the staff of the Richwoods school newspaper as a photographer.
But Aguilar is not the only young person who’s learning how capitalism works from experience. By doing lawn work, he was among those Millennials who have full or part-time jobs—almost a third of the group.
“There’s a revolution under way among today’s kids—a good news revolution. This generation is going to rebel by behaving not worse, but better. Their life mission will not be to tear down old institutions that don’t work, but to build up new ones that do,” noted Howe and Strauss.
“Remember the 1960s. When the decade started, the experts who looked at Baby Boomers assumed they would come of age even more pliable and conformist than the gray-flanneled ‘Silent Generation’ just before them.
That didn’t happen,” said the authors.
The group of Americans aged eight to 21 represent a group of 57 million people with spending power of more than $170 billion a year, according to Harris Interactive, a Rochester, N.Y.-based research firm.
The age group earns roughly $211 billion, spending all but $39 billion of it, Harris noted. “This shows that this age group has been willing to forego savings in order to keep their spending levels consistent,” said John Geraci, the firm’s vice president of youth research.
But the group does more than spend a lot of money, he said. “(Their) opinions drive many adult purchase decisions, and they, literally, represent the future market for most consumer brands,” said Geraci.
They may be the future but they’re doing pretty well now, market researchers note. Americans aged 12-19 spent $170 billion last year, according to Teenage Research Unlimited, a Northbrook-based market research firm. That’s up 10 percent from the $155 billion the group spent two years earlier.
More and more young people are packing plastic, too. According to a Public Broadcasting System report, a 2000 study of college students found that 22 percent possessed a credit card in high school, compared with 11 percent in 1994.
Some businesses don’t just encourage teen business, they cater to it, with or without credit cards. Dry Ice, a trendy retailer based in St.
Louis, Mo. that sells items such as orb chairs and lighted palm trees, looks to teens as major customers, said Maria Poole, a manager at the Dry Ice outlet in Peoria at The Shoppes at Grand Prairie shopping center.
“More than half of our customers are teens,” she said.
Targeting a young crowd keeps a store on its toes, said Poole. “We add new stuff every week. We always put different items by the front door and in the window, using bright colors,” she said.
One of the hottest teen items going now is a dream net, Poole said. “It hangs from your ceiling over your bed. We carry them in a variety of colors,” she said.
Tales of teen involvement at shopping malls are legendary, of course, and Peoria’s Northwoods Mall is no exception.
“The teen has tremendous importance at the mall,” said Amie Oswalt, Northwoods marketing director. “Simon Co. (the Indianapolis, Ind.-based mall owner) looks at teens as one of our best customers,” she said.
Teens are also good customers when it comes to attending shows of all kinds.
“From a concert point of view, the teen audience is very important,” said Marc Burnett, marketing director at the Peoria Civic Center. “We try to attract teens to four or five events a year,” he said.
But young people go to the movies even more than concerts. “Those kids are very important to us. That age group—14-, 15- and 16-year-olds— makes up a huge portion of the market,” said Verne Reynolds, who owns and operates movie theaters in Canton, Chillicothe, Elmwood and Morton.
“They’re also big spenders at the concession stand. They want to have a good time with their friends and they’re willing to spend money,” he said.
Teens are also willing to spend money for video games, although they don’t dominate that industry as they once did.
“We have a much broader audience now, but teens still make up about 40 percent of our business,” said Brad Morse, manager of Game Stop, a video store outlet at Northwoods Mall.
Although video game customers include older players, manufacturers keep their eye on the young people, said Chris Nelson, member services manager for Washington DECA, a Kirkland, Wash.-based organization that promotes business leadership among high school students.
“Nintendo (a video game manufacturer) is located nearby (in Seattle).
They’re strugging to figure out how to reach these students,” he said.
“They realize that young people represent where the money is.”