GenDigital

Back To School Retail & Shopping Report Highlights: Part Three

For the last post highlighting some of findings from the recently released Youth Trends Back To School Retail & Shopping Report, we'll focus on the financials as well as provide a re-cap of the methodology used to conduct the annual survey. First, in terms of methodology, the survey interviews for BTS Retail & Shopping '08 were completed online the week of July 7th using a nationally representative sample of 1,024 four-year, full-time college students between the ages of 18 and 24. Like the rest of our syndicated reports, our target sample composition is based on data from the National Center For Education Statistics. The reason why I bring this up is because a couple of other back to school survey results have hit the wires in recent days and several of their key findings are in conflict with ours. As an example, the National Retail Federation released their annual back to school survey findings earlier in the week and their outlook was quite a bit rosier than ours. Based on the results of the Youth Trends Back to School Retail & Shopping Report, college students plan to spend an average of $427 for products and services, while the NRF said college students will spend about $599. Last year we pegged college student back to school spending at $616 and the NRF had it at $641, a bit closer, but still off. The other point that needs some clarification was the mention in the NRF press release regarding the percentage of college students who live at home and commute to school which they say is more than 50%. That is no where near indicative of the four-year, full-time college population. Less than 10% of all four-year, full-time college students live at home permanently and commute to school. So, I have to think their stat is inclusive of the entire college population (four-year, two-year and grad). Just by speaking to a wider net of students will present inconsistencies with the numbers, and I believe this to be the case here. Ok, so net net, the Youth Trends Back to School Retail & Shopping Report is based solely on the four-year, full-time college audience.

Now, back to the numbers...For back to school '08, college men on average will spend 18% more than college women. The increase can be attributed mainly to electronics and technology related purchases which even in the subdued economic climate have remained steady over the past year. On the other hand, the decrease in spending from college women is centered on clothing and accessory purchases and to a lesser extent dorm and residence furnishings--a product category that up until this year has been on a tear. College men said that nearly half of their back to school related spending, about $192 will go towards electronics and technology related product and services. These items include computer software programs, iPods, stereo systems and docking stations, DVD burners and digital cameras, among other devices. The bulk of purchases made by college women will consist of clothing and accessory items. More than two thirds of their planned spending, or about $268 will be for clothes and accessories compared to the $342 they spent last year.

Although our visibility for the upcoming holiday season remains limited as this point, our concern based on past years is that weak back to school shopping seasons tend to result in a depressed holiday shopping season. Basically, spending habits, unlike something like TV program preferences, don't change on a dime for this audience. The notion that student spending will rebound by late October/early November as the holiday shopping season heats up is probably more myth than reality, at least at this point. It's not like students are the ones receiving those rebate checks in the mail, it's their parents. I guess you could shoot for the optimistic angle and hope that parents stash away their rebate checks until November and then use them to purchase their holiday gifts for the year, but how real a possibility is that?

Back To School Retail & Shopping Report Highlights: Part Two

Ok, part two of the highlights from our recently released 2008 Back to School Retail & Shopping report. To follow up and clarify a key point made in yesterday's post regarding general attitudes from would be shoppers let me say this...yes, without a doubt there will be a measurable decrease compared to previous years in terms of overall spending, but that's not to say the market is sitting on the sidelines completely, they're still shopping just spending less or in some cases deferring purchases (or ideally, hoping those planned purchases come to them instead in the form of a gift from Mom or Dad or another relative). So, what are the hot or "must have" products this season? Let's start with consumer electronics and technology-related devices. In our latest waves of Youth Trends Lifestyle along with additional validation from the BTS report, we see a modest number of respondents who have plans to purchase a digital camera, about 14% in total (22% of females). Models from Casio and Canon received the most mentions on an un-aided basis. Following digital cameras, about one in ten respondents (12%) plan on purchasing a new portable digital media player, almost all say they plan on purchasing some sort of iPod model. The iPod Touch, followed by the Classic received the most mentions. Finally, about one in ten respondents (9%) said they plan on purchasing a new computer for back to school. The overwhelming majority of those respondents (84%) said they plan on purchasing a laptop computer, no real surprise there. The laptop brand and model of choice for the third straight year is Apple's MacBook. Apple has a nice little back to school promo going on right now for students interested in purchasing MacBooks. Smartphones and multimedia phones remain a hot commodity for the audience. However, since the vast majority of youth are part of family share plans there ability to upgrade and/or change carriers to acquire a new device is somewhat limited. The new iPhone 3G is without a doubt the most coveted mobile phone followed by LG's enV, the BlackBerry Curve and the BlackBerry Pearl. Based on the current growth rate, we expect that 32% to 35% of all teens and college students will own a smartphone or multimedia phone by year's end. On the fashion and footwear front, it looks like we are headed back into the preppie casual look once again. Bright knit tops and skirts for the girls and polos and vnecks for the guys seem to be garnering a lot more attention than all those graphic t's and hoodies we saw previously. The preppie retailer du jour is J. Crew, which over the past year and half has made a strong comeback with the college audience in particular and we now expect them to do well with teen consumers as well. If Mom and Dad are throwing down the plastic, female shoppers would snap up as many pairs of Tory Burch flats as they can, but in reality, it's more of an aspirational buy. The much talked about release of Under Armour's new trainers haven't made a dent with the market yet, they're still fixed on Nike. The ultimate brand accessory of choice for back to school for college females, and again this is more of an aspirational measure than anything else are the new handbags from Burberry. I'll wrap up the highlights posts tomorrow with a final tally of the numbers and comparisons to recent years.

Back To School Retail & Shopping Report Highlights: Part One

Our third annual Back to School Retail and Shopping report is now complete. As we expected the combination of reduced funds received from parents (and other relatives) along with a general mindset of deferring big ticket purchases (think laptops and residence furnishings) will put a heft crimp on planned spending for back to school '08. No doubt the sizable decrease in funds from Mom and Dad attributable to high gas and food prices is the prevailing element for the generally weak outlook. But like pretty much everything else with this audience there is a silver lining, at least for a few retailers who will be the beneficiaries of the shift. Without a doubt the back to school shopping season is already underway. Nearly four in ten respondents (37%) said they already made a back to school-related purchase, and mind you, the survey was completed the week of July 7th. It's not like the audience will just sit this crucial shopping season out completely, they're just changing their shopping habits. More than eight in ten respondents said they plan to do the majority of their back to school related shopping at discount mass retailers like Wal-Mart and Target. What's more, and this is certainly symbolic of current climate, more than half of all respondents (64% of females) said they will only purchase products that are on "sale" or products that come will a special offer like a rebate exclusively for students. Within the fiercely competitive specialty clothing retail category, we expect to see the first pull back from some of the higher priced items like premium denim ($80 and above), dresses, knits and even those $40 and $50 fragrances. The beneficiaries will be the lower priced stores that still carry a certain level of cachet with the audience like Aeropostale and Forever 21 while Abercrombie and Urban Outfitters will see more browsers than purchasers. At the end of the day, the audience is looking for a deal and will use the Internet to find those deals. About two thirds of respondents (64%) said they will spend more time this year compared to last year searching for product deals online and about four in ten respondents (38%) said they are more likely to purchase sale products online this season. All told, respondents plan to spend $427 for back to school items, which is down considerably from $616 last year. Tomorrow I'll jump into more of the must have products and brands as well as go over some of the brand purchaser profiles we created.

Update On Back To School Retail & Shopping Report

Just a quick update for everyone as the emails have been rolling in regarding our annual Back to School Retail & Shopping Report. All of the interviews were completed as of this past Tuesday. As soon as we put Lifestyle and the mid-year Insights to bed we'll produce the BTS report. Assuming everything goes as planned, it will drop the week of July 21st. Like last year, I'll post some of the highlights and key findings.

Inside The iPhone 3G And Its Youth Appeal On The Eve Of Its Release

Before jumping into the release of the new iPhone 3G (which comes to market officially at 8am tomorrow), let me first apologize for recent hiatus in posting. It's not like we've all been on vacation these past couple of weeks, instead we've been in the trenches putting the finishing touches on the next wave of our Lifestyle reports for College and Young Independents, both of which are our most comprehensive to date. We're also finalizing our third annual mid-year and second half outlook Insights report, lots of good stuff and we're all extremely excited to get everything out to our clients. Ok, now for the topic of the day, the new iPhone 3G, as it is being referred to as. First, a little history...it was about a year ago that Apple introduced the first iteration of the iPhone and the buzz leading up to its release was quite remarkable, even for Apple. A year and change later, Apple has sold about six million iPhones. According to the results of our latest wave of College Lifestyle, just over 4% of college males own an iPhone while slightly less than 3% of college females own the device. If you run the numbers that works out to approximately 500,000 college kids nationally, which means about one in ten current iPhone owners are college students. Not bad, but perhaps not as robust as many pundits originally thought. Apple and its exclusive carrier partner AT&T Wireless have a lot riding on the new iPhone 3G, but there are sure to be some immediate questions that come up regarding its features and functionality as well as the costs associated with ownership. My initial thought when hearing the term 3G was faster speed, i.e. a device that leverages a faster broadband network. Essentially that's the case, but you have to read the fine print on 3G network availability. Those kids who are lucky enough to snag a new iPhone this summer should first make sure they live or attend school in one of the 3G coverage areas, because for the most part, coverage is limited. Of course 3G coverage will expand over the next year, but it might make sense to hold off for now...Beyond speed, most of the buzz this time around is about the lower purchase price. The 8GB version costs $200 (compared to $600 if you purchase the first iteration a year ago...wonder how those people feel) and the 16GB retails for $300. That's definitely in the purchase wheel house for many college kids. That said, there is a little catch. The minimum monthly plan rates have increased to $70 from $60 or an extra $120 a year, so technically you're up to either $320 or $420 and after perusing through the AT&T site, those plan costs are exclusive of any messaging plan and what's the most pervasive mobile activity for this audience? Right, it's messaging. So assume an extra $5 to $10 a month for a data plan and now you're up to $75 to $80 a month or $900 to $960 a year. All in all, it actually might end up costing more to own the device over time. Ok, so that's the deal with pricing, now for the features and functionality. The audio quality has reportedly been improved dramatically and some say it's crystal clear and literally impossible to distinguish that a call coming through is being made via a mobile device. The second really cool thing is the new Apple App Store as it is being called. Most of the apps will be free for download directly from the Apple site, this addition next to the enhanced audio quality is definitely the coolest thing the device has going for it. For the 10% to 15% of students who are voracious mobile gamers, this will be a strong selling point. All in all, we don't expect student ownership to increase exponentially by year's end, rather it will in all likelihood increase modestly somewhere between 7% to 9% of all college students by the end of this calendar year. In the meantime, the must smartphone device for this audience segment will continue to be the BlackBerry (mainly the Curve model, followed by the Pearl), which if it continues on its current growth trajectory pattern will be in the hands of 14% of students by year's end, up from less than 4% in '07. Enjoy the rest of the week.