Trolling for tween dollars: Discount retailers target the allowance-spending crowd with a constant rotation of trend-driven items and scorching hot licenses
Fickle and very trend driven, landing the elusive tween shopper has become something of a holy grail for retailers of late. And a few wily State-side entrepreneurs have created a new way to capture some of that market, giving tweens and teens discount-store chains that cater squarely to their tastes.
Ninety-five percent of the inventory at tween-focused dollar store chain BTween $1 and Five falls right between those price points. President and CEO James Berk says parents have become more value conscious, frequenting discount retailers such as Wal-Mart in ever-increasing numbers, and it makes sense that their behavior would influence their kids. ‘Dollar stores have been the hot-button genre of retailing lately,’ he says. ‘It’s interesting to see that kids this age understand relative value.’ In short, they want to save money and they’ll gravitate to the store with the best prices – especially if they’re dropping their own moolah at the till.
And kids today have more disposable income than ever before. According to the Roper Youth Report, from New York-based research firm GfK NOP, teens and tweens have about US$29 burning a hole in their pockets each week, two more bucks than last year. At the same time, toys priced below US$10 accounted for 43% of overall toy sales in the U.S in 2004, according to industry analyst The NPD Group.
So far, Philadelphia-based Five Below is the biggest contender in the ring. The chain went through a growth spurt last year, opening 25 outlets and now has 47 stores located across the East Coast. Launched in 2002 by former Zany Brainy founder David Schlessinger and ZB CEO Tom Vellios, Five Below also carries a constantly changing assortment of items priced between US$1 and US$5.
The idea was to create a place where tweens and teens could return to repeatedly spend small amounts of their own money, Schlessinger says, dubbing the strategy micropurchasing. The key is to have a continually rotating selection of trend-driven items such as iPod cases and room décor and accessories along with seasonal impulse products such as Halloween costumes. It’s equally important to stay on top of hot licenses from indie-hot Napoleon Dynamite to the ubiquitous SpongeBob SquarePants.
With plans to open more outlets this year, Texas-based BTween $1 and Five got off the ground in 2004 and added four stores to its roster of seven last year. Each of the mall-based outlets has about 3,500 SKUs at any given time, which are refreshed every four to eight weeks. Berk says on an average day, the stores sell around 1,000 different items, indicating that this demo has diverse tastes.
Because stock turns over so quickly, Berk’s buying cycle never really wanes. He picks up much of the chain’s inventory at various trade shows and over-stock closeout sales throughout the year, keeping a vigilant eye on trends.
Last year the hot item was the poncho and this year he’s stocking shrugs. Rubber bracelets are out and blinged-up jewelry and accessories are in, while electronics accessories such as cell phone cases and anything iPod are gold. Room décor is also popular – in fact, the retailer’s best selling item is a US$5 lava lamp that, according to Berk, goes for US$14.99 at other stores.