Target taps a teen trend

Scott Carlson
April 7, 2005

Target Stores appears to be hitting the bull's eye with teenagers in a surprising retail category: home furnishings.

The Minneapolis-based discount giant ranked third among 18 national retailers as the top choices of teens for home and room furnishings, according to a study released Wednesday by brokerage firm PiperJaffray Cos.

Only Ikea and Pottery Barn polled higher than Target, Minneapolis-based PiperJaffray said in its semi-annual survey, "Taking Stock With Teens.'' Sixteen percent of respondents picked Ikea as their top choice while 9 percent chose Pottery Barn.

Target also polled at 9 percent but got slightly fewer votes than Pottery Barn. It also topped major retailers like Bed Bath & Beyond, J.C. Penney and Crate & Barrel. Target slipped from the No. 2 ranking in last fall's survey, even though it was the top choice of 9 percent of teens then, too.

Wal-Mart placed seventh, with 4 percent of respondents naming it their first choice for home furnishings.

While Piper's national survey focuses mostly on teen preferences and buying habits for apparel brands and retailers, the study also recognizes the growing importance of home furnishings to this group. In the last few years, home furnishings have gained immense popularity, turning into a $17 billion-a-year market among school-aged youth (ages 8 to 18) who live at home, said Greg Livingston, executive vice president of WonderGroup, a Cincinnati-based youth marketing and advertising firm.

"I believe Target has captured the attention of teens through trend-right merchandising in apparel and innovative 'image' advertising,'' said Piper analyst Jeff Klinefelter, who started the survey three years ago and uses it to guide some of his retail stock recommendations. "This has led to more interest on the part of teens to purchase not only apparel but also room accessories.''

Klinefelter said Target's high ranking among teens for home furnishings is a big plus for the retailer, given that the category is among its most profitable departments.

WonderGroup estimates U.S. households spend nearly $390 per child over the course of a year on home and room furnishings. That figure is in line with Piper's latest survey that parents' spending on teen furnishings has increased to $345 on an annual basis, up from $297 last fall.

The trend is fueled by teens who want to equip and decorate their rooms ? with everything from TVs and CD players to desks, beds and sheets ? and parents willing to accommodate them, Livingston said. TV programs like "Extreme Makeover: Home Edition'' have contributed to the craze, he said.

Piper's survey is based on visiting some 600 students at 11 high schools last month across the United States. The firm also polled 125 parents.