Retailers targeting baby-boomer kids

Real Estate Weekly, August 31, 1994 by Lois Weiss

The phenomenon of working baby-boomers having raising kids is leading to a surge in children-oriented retailers, say area marketing experts. Not only are there more of these children of baby-boomers, but they have more discretionary allowances and affect more family purchasing decisions than ever before.

These mini-consumers are being targeted by an ever-growing list of retailers, who are creating store environments specifically to service their needs.

"Specialty store retailing has reached a point where 'kids' in and of themselves is a specialty, and warrants independent entertainment," explained Benjamin Fox, president of New Spectrum Realty Services.

While in the past, a store like Buster Brown's shoes and a hobby shop specializing in models was about as kid-oriented as one could get, today there are a variety of retailers targeted at kids. Restaurants, indoor play centers, collectibles retailers, book and video stores, day care centers, active wear retailers, hair cutters and even the local shoe seller are gearing their shops to kids. And hobby shops now sell sophisticated computer fantasy games next to the model rockets.

"What you have is a reaction to the Baby Boom years of the 1950s," explained Fox, noting that the Boomers are now having babies. "The metropolitan area has gotten younger and not only is there a (new) baby boom, but there is a baby boom in an upwardly mobile direction."

In the post-war boom, few people had any money to spend, he recalled, but the 1990s has provided a more solid, upwardly mobile baby boom. "We are able to provide our kids with more things and more opportunity," said Fox. "And not only are we able to provide more opportunity, but more entertainment."

That entertainment can be in the form of an afternoon at Discovery Zone; a video rental from Blockbuster; a shopping expedition to Gap Kids, Herman's or the Warner store; a trip to the mall to try a virtual reality ride; or an evening on Broadway to see Beauty and the Beast or Cats.

Thomas Arbuckle, general manager of The International Toy Center, managed by Helmsley-Spear, sees toy retailers as recession-proof businesses. The nearly 1 million square feet of showroom space that comprises the International Toy Center is actually housed in two buildings, 200 Fifth Avenue and 1107 Broadway, that are linked via a bridge over 24th Street, said general partner Peter L. Malkin.

"Children don't play with toys as long as they did before, but its still considered by many to be a recession-proofproduct," Arbuckle said. "Even in the worst of times, parents try to insulate their kids."

In February, the Javits Center and the Toy Center host 22,000 buyers and an equal number of sellers, most of whom are adults, who pick and choose what products will make it to retailers for sale in the coming months. The small, innovative toy companies often "grow" into full-time space at The Toy Center as their businesses expand.

Arbuckle says the smaller businesses, however, have a hard time producing the output that is needed to supply today's super toy stores.

"We believe there is a lot of strength in the smaller specialty toy retailers," he noted. They can carry the innovative new products, and help with the cash flow to expand the companies. "The large retailers are not innovative because people can't afford to take chances," Arbuckle added. "So there is a real opportunity for smaller retailers."

While these small service-oriented neighborhood shops thrive and open all around the city, other retailers are eyeing children as their next targeted consumers.

In the past, many retailers have had kids as a small part of their customer base, but they are now spinning off their children's sections into freestanding stores, observed Paul Kurnit, president of Griffen & Bacal, and advertising agency that handles a variety of children's products, including Discovery Zone and Hasbro's toy lines.

The Gap, for instance, has spun off its children's section into stand-alones. Toys 'R Us has opened freestanding clothing stores called Kids 'R Us. "The Gap is a pioneer, with Gap Kids and Baby Gap, with several of them in Manhattan," said Albert Bialek, president of the retail store consulting firm of Albert Bialek & Associates.

Entertainment giants like Warner and Disney have their own shops, and Kurnit does not believe it impossible that a day will come when a comic book concern like Marvel has its own store, and other collectibles, found in retailers like Comics Plus, Forbidden Planet, or Dragon's Den, spin-off even more specialized retailers. "How good are any of us in looking into a crystal ball?," he wondered.

Kurnit also points to what he calls "the boutiquing concept of the store within a store," with areas of major retailers reserved for different concepts, such as a CD section or kids' videos.

Book retailers and even toy giant Toys 'R Us are expanding their children's book sections and video offerings and starting to compete with mom and pop stores that are targeted only at children.