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Merchandising To Kids - It Ain't Childs Play!

Dave Siegel gives us his inside view on the kids of today, what they want and the influence that they wield.

Merchandising and marketing to kids has become one of the hottest areas of interest for today's consumer packaged goods marketers. Why is it happening? How is it being done? Is it going to escalate and what might be it's effects? Just read on!

Dave Siegel.

Today's savvy businesses have come to realize that the old saying, "Kids should be seen, but not heard," is long, long gone, especially when it comes to their role in the purchase of just about any product or service within the household. Businesses are spending billions of dollars in marketing and merchandising to children via licensing, in-store display activity, packaging and advertising. Children's consumer research is at an all time high as companies explore new and different ways to appeal to this market. And it's not just toy or cereal companies interested in children anymore! This year alone, my firm has been approached by such industries as home electronics, paints, fragrances, clothing, automobiles, health care and, of course, food companies. All are seeking help in talking, marketing and advertising to kids. Why the Sudden Interest The reason for all of this new attention being placed on children is - their influence! Kids actually influence between 20% and 80% of the purchases in most categories. In fact, a few years ago, a study found that children were extremely influential in the purchase of 20% of all cars made by families with children. Our own work has found that anytime children believe there is a product designed especially for them and they know about it, their influence in the category goes way up! Modern moms and dads regularly ask their children: What do they want brought home from the store? Where would they like to eat? Where would they like to go on vacation? What do they want to do? What's causing this? Kids are being forced to become adults at a dramatically early age. No longer do many have the luxury of both a mom and a dad. In fact, at any one point in time, roughly 1 in 4 children are living with only one parent. They no longer have mom home watching them because she is usually working. They no longer have a problem making their own food because of microwaves and toaster ovens, and the vast majority of kids are experts at using these appliances by the age of six. They also know more information than their parents ever hope to regarding new products and services. 95% of all kids are using computers and over 70% of these kids are under the age of six. Most kids get their own magazine subscriptions and, unlike their parents, eagerly await the next commercial on TV. How Do You Reach Them? Businesses approach children through several avenues. Among the most widely used are: Licensing Licensing has become a huge marketing tool when it comes to attracting kids. Children continually tell us in research that before they ask for a specific product, they want to know that the product is made specifically for them.. Businesses have found that one of the best ways to let children know that a product or service is for them is to associate it with a recognizable character. Even by the age of two, children are able to point to a picture of Barney on a particular piece of clothing and urge mom to buy it for them. Licensing makes up an estimated 50% of all toy industry sales. Virtually all video games (99.2%) and action figures (96.7%) are sold solely because of their license. However, licensing goes far beyond its use for selling toys. To insure a top selling fruit snack to kids, Farley added the Rugrats license to their product. Kraft General Foods has now licensed its' major lines with Nickelodeon; McDonalds with Disney; Curad Bandages with the Cartoon Network and on and on and on. More and more major consumer companies are frequenting the annual licensing show, reading Licensing Magazine, and employing licensing agents to help them find the right license with which to associate.

The important thing for us to remember is that the reason businesses have turned to licenses is in order to reduce their risk when appealing to children. Therefore, when it comes to choosing a license, most aggressive, knowledgeable businesses will seek a proven, hot license property with which to associate. This is good news for those animators with a proven, hot license. If you are developing a new one or are holding a property that is less than stellar, good luck! In-Store Displays In over half the families we interview, children regularly go grocery shopping with their moms to insure that the "right" foods are being brought home. 62% of all kids 9-11 years old report visiting the supermarket at least once a week. By the age of five, half of all kids go to the supermarket without their parents, instead using an older sibling or friend as a chaperone. With all of these children in all of these shops, it is no wonder that in-store merchandising to children has become more prolific and dramatic. Many U.S. supermarkets sport a highly effective Frito Lay Chester Cheetah display whereby kids can look in a funny mirror, pick out their own snacks and be entertained. Kid-oriented floor graphics and signage is becoming more prominent because kids pay more attention to floors than any other area of a store. This year alone, we have produced in-store displays for bicycles, toothbrushes, computers and fruit products. Advertising Have you watched any kid TV lately? If not, you will be surprised to see who is advertising to kids. Suntan lotions, shampoos, clothing, vacations, entertainment alternatives and of course, the ever present, food products, even those that require that pal, the microwave, are all cramming the airwaves. Furthermore, this type of advertising attention is not just occurring on the tube, but also in magazines. As I've said, many kids have their own magazine subscriptions and it is possible for a business to reach about half of all targeted kids with just a few magazines like, Nickelodeon, Sports Illustrated for Kids, and Disney Adventures. These magazines contain not only the advertising mentioned above, but other categories such as home electronics, cars, and more. Businesses have realized that if you research kids and develop products for them, then you had better advertise to the kids and not just their parents. That is why advertising targeted to kids has now topped the US $1 billion mark. Will it Escalate? There is little doubt in my mind that marketing, merchandising and licensing to children will continue to escalate through the foreseeable future. Kids are becoming even more influential in the purchase of goods and services, and more importantly, businesses are finding success in marketing and merchandising to them. For example, the fruit snack category alone amasses sales of over US $1 billion annually. This category did not even exist a few years ago. "Lunchables" (a packaged lunch product) and other take-to-school lunch products sell in the hundreds of millions of U.S. dollars annually. Children's yogurt such as "Sprinklins," "Danamals," and others, also enjoy hundreds of millions of U.S. dollars in sales annually. Also, kids are continuing to become more comfortable with searching for and processing information. Kids are surfing the Internet, using electronic pagers and listening to their own radio stations, such as Radio Aaah's which is just for children. Lastly, businesses have already begun to escalate their use of merchandising and marketing to children. Businesses are beginning to look at using school menus, book covers, in-school posters, Internet advertising and more, to target today's kids. Kids media is expanding as well with programming, stations, and magazines being developed specifically for this target group. In short, if kids are seeking more information and becoming more influential and businesses are seeking more business and are seeing great results with this market segment - how could efforts not escalate?

The Effects

Now it's time to speculate...where is this all going to lead? Here are my guesses: The demand for kids' products, services, toys, etc. will increase. As kids see more and learn more, they will want more. Just like us adults! I recently had the opportunity to tour the Biltmore Estates in North Carolina, and while there I saw a Christmas gift-giving diary. Not surprisingly, in the early 1900's children, even of the very wealthy, received one gift for Christmas. Today, children receive dozens. When I began marketing toys 15 years ago, it was impossible to sell a toy for over U.S. $20. Kids have become so influential that the magic price point is now more like U.S. $200! There is little doubt in my mind that kids will continue to get better and better in their ability to process complex information quickly. All one has to do is watch how kids currently work on computers. They want their information to be interactive and they want it fast. They want it brightly colored and they want it to talk to them...and not to their parents. This, in turn, will lead to more dramatic, colorful, interactive efforts on the part of marketers. This will also mean that even more attention getting devices/licenses/techniques will be needed to break through the clutter and capture a child's attention. Kids will continue to grow up at younger and younger ages. Today kids can talk to other kids around the world. They can watch television that is produced and being aired in cities all over the globe. As a result, they will be exposed to life not only in their neighborhood, but in the streets and alleys of the world. In summary, the time ahead bodes well for many of us involved in kids marketing and advertising. For those involved in animation, there will be even more needs placed upon you to develop more attention grabbing, satisfying, breakthrough work. The kids will want it. The businesses will need it. Dave Siegel is the general manager of Small Talk, a leading kids marketing and advertising consulting group. He has been in the consumer packaged goods marketing and advertising business for more than 25 years, with over 20 years of hands-on experience marketing to kids. Dave has been interviewed in The Wall Street Journal, The Washington Post, The Atlanta Constitution, Advertising Age, BrandWeek, and many others. He has also been a featured speaker for the American Marketing Association, Disney, Grocery Manufacturers Association and the U.S. Olympic National Convention, among others.