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The Kids Are Alright: Healthy BTS Paves Way for Strong Holiday Season

It is great to be an American tween: old enough to know what is trendy, yet blithely ignorant of U.S. and global economics.

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Cotton Incorporated

Photo By Lifestyle Monitor™ Survey

It is great to be an American tween: old enough to know what is trendy, yet blithely ignorant of U.S. and global economics. So, even though Mom and Dad might worry about job and foreclosure reports, the kids plow ahead with their endless requests. Mixed with a seven-month high in consumer confidence, Back-to-School saw strong numbers — Target was up 4.2%, Macy's increased 5.1% and Gap jumped 9% — which experts say bode well for holiday.

The National Retail Federation's Mike Gatti, spokesperson, says comparing BTS and holiday spending is like comparing apples and oranges, but the overall trend is positive.

"The feeling among consumers is better because housing is up, companies are hiring," Gatti says. The NRF expects retail sales to increase 4.1% this holiday. "There's been a lot of positive news, and that's all good as we head into the holiday season."

Parents intended to spend an average of $213 on Back-to-School clothes, according to the Cotton Incorporated Lifestyle Monitor™ Survey. For holiday, gift givers with children plan to drop another $226 on apparel gifts (up 34% from 2011), $182 on gift cards (down 8% from 2011), $342 on electronics (up 15% from 2011) and $193 on toys (up 10% from 2011). Overall, the Monitor shows those with children will spend $598 on gifts this year, up 22% from $490 in 2011.

Kit Yarrow, Golden Gate University consumer psychologist and author, Gen BuY, says this will be an "extremely strong" holiday season, even though BTS is not the indicator it used to be.

"Back-to-School used to be more of a bellwether, but the economy and the way people buy throughout the year have made it less so," Yarrow says. "Still, even in the recession, parents spent on their kids. Now, we're solidly in recovery — and people are spending judiciously — but we're fully back in the teen and tween areas. This Back-to-School was a strong indicator that parents are all-in again. They're confident and they're once again treating their kids to the best things in life."

Nearly half (49%) of consumers with children say they love or enjoy shopping for holiday gifts, significantly higher than consumers with no children, the Monitor shows. More parents start buying holiday gifts in October (23%) and November (35%) and are less likely than those without kids to shop all year long for holiday gifts (10% versus 17%). This holiday, 55% of shoppers say they plan to buy apparel as gifts.

At Izzy and Ash, which has two better tween boutiques in Austin, TX, as well as an online business, BTS sales were up across the board, says Jennifer Mazuelos, owner. After strong pre-sales of fall items from June through September, she expects holiday to be strong.

"Austin is great; we haven't been hit too hard by the economy," Mazuelos says. "So we have a pretty steady business here. The kids know our Austin stores and want to come in and get something because their friends do. And online, we have such a great following because there aren't a lot of sites that do tween well. We're mostly reaching the moms on our site, and we've also got Facebook, Twitter — and we just started Pinterest."

Among consumers with children, 54% plan to shop in-store and 48% will be online on Black Friday, significantly higher than consumers with no kids (33% and 36%, respectively). Also, 45% of parents plan to do holiday shopping on Cyber Monday. The next most popular days for in-store shopping are after Christmas (27%), Christmas Eve (15%) and Thanksgiving Day (15%) among parents. Online, National Free Shipping Day (24%) and Thanksgiving Day (22%) prove to be the most alluring for parents.

At Berkley Girl, a tween retailer with two Manhattan boutiques, fall business surpassed target numbers, says Jennifer Bruder, owner.

"That was a good sign," Bruder says. "On the other hand, in terms of foreshadowing, we have to consider things store-to-store because our Upper West Side boutique gets a strong tourist business for holiday no matter what."

Berkley Girl has a web site, but Bruder does not sell online — or even engage in much social media.

"I guess you could say in some ways we're an old school store," Bruder says. "I've dabbled a bit in it, but with the tween age you have to be careful. So I focus on face-to face-interaction, I run focus groups, we talk to mothers. And we send out old school mailings."

Yarrow says even though tweens cannot actually purchase online, their parents are allowing them to shop a site.

"The parents check to see what the kids put in the cart and if they approve, they'll move in with the credit card. So the kids are active online and they're influencing purchases."

The NRF's Gatti says 63.5% of parents say children have a 50% say in what is purchased. So whether online or in-store, the influence has been growing over the years.

"And the online factor is growing for kids," Gatti says. "So retailers have to be online. It's critical. The goal is to build a dual relationship with the kids and the parents, because the mom is as much a customer as the kids. And you want her to continue through all the seasons."

This article is one in a series that appears weekly on WWD.com. The data contained are based on findings from the Cotton Incorporated Lifestyle Monitor™ Survey, a consumer attitudinal study, as well as upon other of the company’s industrial indicators, including its Retail Monitor and Supply Chain Insights analyses. Additional relevant information can be found at CottonLifestyleMonitor.com.

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