How the Teen Psyche Shapes the Market for Teenage Retailers

Creating brand loyalty among teenage shoppers is a challenge given the wide and rapid swings in their tastes. Despite this uphill climb, the rewards of becoming le gout du jour (and, hopefully, de la saison) for teenagers is not only highly profitable but also a sure-fire means of expanding a brand’s consumer base. The first shots across the bow have already taken place as retailers such as Uniqlo, H&M and Forever 21 have changed the way in which the game is played – namely, by lowering price points and offering a much broader variety of merchandise.

With the emergence of these new retailers, once major teenage fashion giants such as Abercrombie & Fitch, Aeropostale, and American Eagle have taken a drastic hit in sales and have realized that competition within the teenage market is as competitive as the bouts of yesteryear between Ali and Frazier. According to a survey conducted by Piper Jaffray & Co. of 5,200 teenagers in 2013, it appears that these brands simply do not currently resonate with teens. So, what gives?

Apparently, these retailers simply did not stay “on-trend”. In a demographic segment subject to the capriciousness of memes and the viral youtube video of the day, this morning’s fashion is that afternoon’s old news. In many respects, the traditional teenage retailers have failed to keep up with the times and needs of teenage consumers. Industry analysts note that merchandise within Abercrombie & Fitch, American Eagle, and Aeropostale contain large brand logos and are monolithically tailored to the “preppy” crowd; merchandise of the new retailers rarely contain any insignias and cater to a panoply of fashion genres. Today’s younger consumers develop their own conception of “cool” and craft their own unique identity, illustrated through their choices in clothing, art, and music. Thus, the omnichannel approach by the new retailers – namely, its clothing collaborations with famous musicians and/or celebrities, and ubiquitous presence on social media – resonates with teenagers and precipitated a boom in profits.

Those who study and comment upon teenage retail report that the business models of Uniqlo, H&M, and Forever 21 focus on cheap, trendy fashion, and recognize how fickle and cost-conscious teenagers are. Industry analysts opine that producing a variety of cheap, trendy products may not only shield these retailers from the detrimental effects of the eventual fashion misses (and resultant lackluster sales), but also allow these retailers to be especially sensitive to the slightest shifts in the winds of fashion. It would seem to behoove all retailers targeting the teenage market to keep a watchful eye (and a nimble hand) on trends and styles and avoid an “all-in” approach to a particular style and merchandise mix.

Related topics: Retail, Retail Sales