Retailers cautious about sales impact of first-time parents - Merchandising Through The Ages: 25-44

The |baby boom' generation has earned a bad reputation with mass merchants and suppliers because of its ability to confound demographic projections. This 24 to 44 age group is expected to start having more children and thus, drive sales of juvenile products, infant products in domestics, and perhaps infant and pre-school toys. But retailers and suppliers are leery.

"The baby room phenomenon has been the topic of conversation for the past 15 years; it has been the defining force that you can put your hands on. But I look at the better business we are enjoying as being a measure of the economy rather than because of the baby boom," said a division merchandising manager from a major chain based in the South.

Indeed, there is good news in the 8% sales increase reported by the Juvenile Products Manufacturers Association, and the industrywide, 20% first quarter increase in the juvenile products within domestics. There are also some bright spots in some pre-school and infant toy categories being reported by the Toy Manufacturers Association. But retailers are not convinced that first-time parents in the "boomer" generation are a significant driving force behind these changes.

At Shopko, Barry Horwitz, vp of planning and research, says, "We are going through the planning process to see where we are strong, where we need to strengthen and where the demographics suggest we should be looking."

Consistent with the chain's |Vision 2000' store concept, Shopko is directing more of its attention to young women and young mothers. One of the adjustments involves a pricing change to take advantage of higher spending levels by first-time parents. Horwitz says the chain will maintain its entry price points, but will probably move up a notch in the |best' end of its good, better, best presentation.

Other potential opportunities involve the use of multiple packs to produce bigger ticket sales for freer-spending first-time parents, and more emphasis on classical licenses that appeal to new parents and gift-giving grandparents.

Pamida vice president Frank Washburn says the chain uses existing demographics within its market areas to tailor assortments, but relies less on population projections to anticipate new buying patterns by consumers, and more on the experiences of its buying staff.

"We do react to demographics, but they have to be market specific. It has to be a trend, rather than a fluctuation. Most of the demographic information we see is coming from metropolitan areas and we have to be careful because our markets in rural areas and the upper Midwest are not the same as cities on the East and West Coasts."

A spokesman for the Juvenile Products Manufacturers Association noted that birth rates have been increasing since 1990. But even with these increases in births, there has been fluctuation. In 1990, new births reached 4.2 million, good news for makers of car seats, strollers, high chairs and baby carriers. But during 1991, the increase slowed to about 4 million.

For suppliers tightly focused on one product category, the opportunities that demographic changes in the baby boomer generation represent seem more apparent. At Wamsutta-Pacific, Scott White, director of marketing, pointed out that, "The 35- to 45-year-olds in the baby boomer generation have the buying power, and despite the recession, they will purchase juvenile products for their children."

He describes this consumer group as being less character driven, and more influenced by style and fashion. "With our new Pinocchio ensemble we really went after that senior citizen group that buys it for gifts," he said. White noted recent Bradlees circulars that promoted percale sheets for youngsters was evidence of an overall upgrading by consumers shopping for their children.

Clarence McMerty, executive vp of marketing for Dundee Mills' baby products division, described families with newborns as the company's key target market and reports that spending levels by parents and grandparents has stayed fairly high.

"We have been very successful in packing a comforter, bumper pad and a crib sheet into a set. We have been doing it for the last two years and it has done very well. It makes an ideal starter set for the mother and it is also an ideal gift item," he explained.

At the Bibb Company, Thomas P. McCaffrey, executive vp for sales and marketing, said, |The whole issue of demographics in juvenile products is interesting, but what drives the business is when the key licenses are available." Although he agrees that classic licenses are much less volatile and more familiar to first-time parents and grandparents, he believes the tremendous advertising programs that support new licenses help inform these newcomers as to what's hot.

           Toy Sales
                     '90    '91
Infant Toys          $320   $356
Musical Toys          102     94
Blocks/Accessories     25     26
Talking/Sound Toys     51     59
Learning Toys         114    121
Total Infant and Preschool toy sales for 1990
were $992 million, and for 1991 were
$1,086 billion.
Source: Toy Manufacturers of America
      Juvenile Products
      1991 Sales Volume by
      Category in Millions
Cribs                   $300
Child Restraints         240
Infant Restraints         90
Strollers (full size)    200
Strollers (portable)      90
Swingers/Jumpers         112
Walkers                   80
Overall sales reflect an 8% increase, with
no declines in any category
Source: Juvenile Products
Manufacturers Association

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