NPD Spotlights ‘The Megapower of Kid Fans’ In Kickoff of LIMA Executive Breakfast Series
During her talk on “The Megapower of Kid Fans” that kicked off the LIMA/NPD Executive Breakfast series on Tuesday in New York, The NPD Group’s Kristen McLean spotlighted kids’ growing buying power and influence; kids under age 12 directly spend $1.5 trillion annually, according to one study she cited. They’re frequently taking their cultural and brand cues from YouTube, and it was apparent from the presentation that companies marketing in the kid space would be well served to have a YouTube strategy firmly in place.
“The cycle of brands has completely accelerated and they are uniquely tied into a child’s personal identity, so innovation is going to be really important” in developing both brands and products, McLean said. “They are finding things on YouTube and forcing the market to adjust.”
Though brands are pervasive in kids’ lives — McLean cited outside research that finds that the average 10-year-old has memorized about 400 brands, while kindergarteners recognize 300 – it’s not all about brands. She pointed to how online dialogue among kids in the first part of 2017 propelled a run on Elmer’s Glue – the key component of homemade Slime. There were more than 10 million YouTube and Instagram #slime posts fostering the craze, she pointed out.
Part of what is driving the children’s business is digital technology, McLean said. “Their digital reality is they should get what they want when they want it,” McLean said. “This the first time children are an authority on something, which is the digital revolution.”
Yet children’s awareness of brands shouldn’t be construed as “slavish attention” to them, McLean said, given YouTube and other digital service’s broad range of content.
Licenses are figuring prominently in their purchases; according to NPD’s recently launched U.S. Kids License Tracker, 26% of unit sales overall in the children’s category in a six-month period ended March 31 with the highest concentration in consumer electronics/accessories (48%), sporting goods (43%), baby gear (40%) and home products (38%). Walmart was seen with the highest share of the kids’ market, followed by Amazon and Target.
Other forces cited by McLean:
*In an examination of consumers’ disposable income, she noted the corrosive effect of increased health care costs, but also a more subtle factor that NPD labels “committed consumption” – the array of monthly or annual memberships and subscriptions (i.e. Amazon Prime, Netflix/Hulu, Spotify, warehouse club membership, cell phone bill, Microsoft Office fee) that have taken their place alongside more traditional expenses such as rent/mortgage, food, utilities, insurance etc.
*She noted research that shows that parents – perhaps freed up by the pervasive ability to perform job functions remotely — are spending more time than ever with their kids; she cited TD Ameritrade research that shows 84% of Millennial parents describing their parenting styles as “very involved.”