WHAT PEOPLE BUY: INFANT AND CHILDREN S CLOTHING AND APPAREL


WHAT PEOPLE BUY: INFANT AND CHILDREN'S CLOTHING AND APPAREL

Just over one-third of households (36 percent) bought infant and children's wear in the past year. This is a category of purchase that is perceived more as a necessity than one that is discretionary. After all, babies grow fast and they need clothes, rather than fashion.

Industry Snapshot

Americans spent $11 billion on clothing for infants, about 4.1 percent more than they spent in 2000 (see Figure 6.3). With the industry's fortunes linked directly to birth rates, prospects are good for the category over the next ten years or so as the millennial generation, 71 million strong and almost as big as the baby boomers, marries and has children, thus starting another baby boomlet, this one being the grand-children of the baby boomers.

 

2000

2002

% CHG '00–'02

Total Personal Consumption in millions

$10,617

$11,050

4.1

Source: Bureau of Economic Analysis


Figure 6.3: Infant's Clothing Industry Snapshot

New statistics about the age of first-time mothers also bode well for the baby clothing business. Today the average first time mother is older than she's ever been, just a little older than 25 years, a significant increase since 1970 when the average age was 21.5 years. Older, more mature mothers have more financial security and thus more money to spend on their newborns. Another positive sign for the baby and children's industry comes out of the same study: Birth rates among the most mature mothers, aged 35 to 44, are at their highest levels in three decades.

Retail Overview

Shoppers turn first to discount department stores to buy infant and children's clothes, as two-thirds of buyers said they shopped in these stores. Next comes traditional department stores, a source for infant and children's clothing among 60 percent of shoppers. Clothing specialty stores follow third, used by 41 percent of kids clothing shoppers in the past year.

Rising acceptance of discounters' private label brands in children's clothing is an important reason why shoppers turn to these outlets. According to NPD Group, private label clothing brands account for 36 percent of the total apparel market. For retailers like Target, their private label infants' business is a platform on which they construct the entire baby department.

Key specialty competitors in kids clothing include The Children's Place with nearly 650 stores targeting kids clothing and accessories from infant to age 12; GapKids and BabyGap, the chain of Gap stores just for kids spun off by the apparel giant; Gymboree, with 580 stores for infant through age 7, who then graduate to the company's Zutopia tween chain; Carter's, a leading brand in infant apparel, with 160 outlet stores, as well as branded boutiques in department stores; and OshKosh B'Gosh, which operates 150 outlets and specialty stores as well as distributes through 4,600 stores nationwide. (See Figure 6.4.)

 

2002 SALES

Kids R Us

$1.9 billion

The Children's Place Retail Stores Inc.

587 million

Too Inc.

545 million

The Gymboree Corp.

448 million

OshKosh B'Gosh Inc.

222 million

The William Carter Co.

207 million

Source: The 2002 Directory of Apparel Specialty Stores


Figure 6.4: Infant and Children's Apparel Market Share Leaders

The children's apparel market is losing a major player as Toys R Us closes its 146 freestanding Kids R Us chain locations. At the same time, they will continue to operate their 180 Babies R Us stores, which target the infant and toddler market. Babies, rather than Kids, has proven a more successful concept for the company. They also announced that about 15 of the Kids R Us stores may be converted to Babies R Us stores.

Purchase Drivers

Being tied to birthrates, the infant clothing market is destined to grow over the next ten years. With this new generation being the grand-babies of the baby boomers, they will be blessed with the most active, healthy, and affluent grandparents of any generation that has come before. Wealthy boomer grandparents will lend support to their own off-spring in caring for the next generation by getting back into the market for baby clothes among other things. This will mean new opportunity at the luxury end of the market. With over 30 franchised specialty boutiques located in only the most exclusive shopping centers nationwide, Jacadi Paris offers a very exclusive line of children's clothing and nursery accessories at ultra exclusive prices. Many luxury brands, such as Burberry's and Ralph Lauren, are also getting into the business of out-fitting kids, as is Saks Fifth Avenue, which now stocks Ralph's baby line along with Burberry's, Best of Chums, and Petite Bateau.

Demographic Variables

Women take the lead in buying infant and children's clothing. Some 42 percent of women, as compared with 30 percent of men, report making these purchases in the past year. The peak age for buying kids clothing is 25 to 34 years, while the age ranges that bracket those years (i.e., ages 18 to 24 and 35 to 44) also have high purchase incidence. There is another small bump in purchase incidence found among consumers 55 to 64, a prime age for grandparenting.

Affluence links with purchase incidence of children's clothing, with the highest income households, $75,000 and above, having the highest purchase incidence. And, of course, the presence of children in the home is tied directly to purchase incidence, 54 percent among households with children as compared with 25 percent among households with none. For these households with no kids, gifting is the primary reason behind purchase.

Key Demographics for Buyers of Infant and Children's Clothing and Apparel.

  • Women take the lead, though men also buy.

  • Peak buying years are ages 25 to 34, with elevated incidence among ages 18 to 24, 35 to 44, and 55 to 64.

  • The most affluent buy more.

  • Households with children are the primary buyers.