Over the next five years, American kids three- to 11-years-old will command more purchasing power than their predecessors and their parents will be spending more to keep them in the style to which they’re accustomed. According to the recently published 228-page report The Kids Market in the U.S. from Rockville, Maryland-based market research firm Packaged Facts, by 2010 kids and tweens will wield about US$21.4 billion in purchasing power and their parents will lay out a hefty US$143 billion on their care.

In 2005, the figures sat at US$18 billion and US$115 billion, respectively, with parents shelling out US$58 billion for food with the remainder purchasing other consumer goods, including entertainment. This is something of a decline from previous years but Don Montouri, report editor and publisher at Packaged Facts, explains an expected increase in the U.S. birthrate will mean more kids with more cash to spend in the near future. In the next five years aggregate expenditures on kids three to five and six to eight should spike 24%, Montouri says. For the nine to 11s growth will ring in at a more modest14.3%.

This looming boomlet presents a golden opportunity for marketers and retailers to start catering to kids and parents needs more aggressively to cash in. However, Montouri explains while kids will command a lot of personal buying power, parents will continue to decide how most of the money gets spent. As such, marketing to caregivers will become more important than ever and Montouri pegs pushing the beneficial aspects of product, such as focusing on nutritional and educational features, will remain key to winning over gatekeepers.

A report from Scottsdale, Arizona-based high-tech market research company In-Stat, shows the potential for the educational toy market, for example, is already there. NotJust Child’s Play projects the market will balloon to US$5.5 billion by 2010 from it’s current US$1.5-billion value.

In terms of other demos, the Boomers command an ever-growing share of market spend, as it represents about one-third of the U.S. population. But the kids market is poised to outpace the teen market over the next few years. ‘In terms of pure dollars, the teens will command much more buying power. But it terms of annual growth [for purchasing power] you’ll see a slightly stronger showing in the kids segment,’ Montouri says. DW