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Young, hip singles seek brands at cheap prices

Molly Prior

While chain drug stores work tirelessly to court moms--the proverbial female head of household--a younger group of spendthrifts, who are already treading through their stores, represents an attractive consumer base.

NOP World categorizes this consumer group of young adults as Fun/Atics. As their LifeMatrix profile suggests, these young, single men and women lead active, fun-filled lifestyles and strive for the good things in life, such as luxury brand names and designer clothes.

The only catch is that these young professionals, who generally have some college education, have just begun their careers and may be low on discretionary income for pricey purchases. However, because Fun/Atics are kid-free and have virtually no family responsibilities to prioritize, they are free to spend every penny they earn.

Fun/Atics' "make it, spend it" mentality translates into impulse shopping.

"They really enjoy shopping. They find it relaxing and fun. For them it's an event," said Kelly Sirimoglu, vice president of the brand strategy group at NOP World. "These are the mall rats grown up."

In fact, these young 20-somethings, who are moving into their first apartments and homes, need to shop. Establishing a household requires the basics, such as towels and pots and pans, which makes this group attractive to retailers such as Target and Bed Bath & Beyond, explained Chip Walker, the Chicago-based director of account planning for the advertising agency BBDO, who referred to Fun/Atics as "pro-sumers," or professional shoppers. Walker, whose client list includes Jim Beam, is an authority on this consumer, having spent a great deal of time getting to know prototypical Fun/Atics through focus groups and consumer research.

Aside from a trail of receipts, such recreational shopping translates to a significant amount of dollars spent at retail along the way. Because Fun/Atics enjoy the act of shopping, they tend not to make frequent purchases online. This group is after instant gratification, so if they have to shell out a few more dollars to own the product now, they will.

Because of their aspirational tendencies, this group is concerned with looking good and adorning themselves with brands that have their peers' approval.

"They want to buy a piece of the good life now. So they are going to look for brands to bring that [good life] to them," said Sirimoglu. "Brands tell the world who they are."

"While they don't have loads of dollars, they are very sophisticated shoppers because they've grown up in a marketing culture. They understand marketing," said Walker. What's more, Fun/Atics don't always view marketing and content as church and state.

"Interestingly, for this group, advertising and content are starting to blur together," said Walker, adding that product-focused magazines that elevate shopping to the status of a hobby, such as Conde Nast titles Lucky and its brother magazine Cargo, are extremely popular with this consumer group.

Fun/Atics are already drug store shoppers, knowing they can dash in for a bottle of soda and a magazine or to pick up the hot new shampoo they recently saw advertised. In fact, female Fun/Atics are more likely than their fellow LifeMatrix profiles to purchase cosmetics, toiletries and over-the-counter products at the drug store. When asked if they had purchased these products in the last six months, female Fun/Atics indexed significantly higher, according to 2003 NOP World research. In fact, Fun/Atics' medicine cabinets are usually stocked with contact lens solution, PMS pain relief and at-home pregnancy tests.

And while they shop at drug stores, LifeMatrix findings indicate that this group is heading to competitive retail channels, namely grocery stores, discount retailers and department stores, more frequently.

This freewheeling group of young consumers makes frequent trips to food stores most likely because they do not plan ahead. They are not the kind of shopper who heads to the store with a list in hand.

While retailers' lower-priced proprietary brands, which have become more prevalent in recent years, may do well to entice LifeMatrix consumer groups, such as Priority Parents and Home Soldiers, Fun/Atics tend to want big name brands that have already gained acceptance with their peers.

Therefore, unknown lines don't always work with Fun/Atics unless they are backed with compelling advertising campaigns, explained Sirimoglu. "If no one else has heard of it, it's not worth their money because they are buying it to make an impression," said Sirimoglu.

For chain drug stores' proprietary brands--such as Duane Reade's cosmetic brand apt. 5 and CVS' exclusive hair care line Cristophe, to work with this crowd, they'd likely need to be featured in the pages of magazines such as Allure and Maxim.

Marketing channels such as magazines, Internet and radio work best for getting the word out about new products and brands to this group. Whether it's a function of their active lifestyles or need for excitement, they rate rather low on television viewing. This group would opt for a night on the town over watching the evening news.

Because Fun/Atics are rarely at home and, instead, are usually en route from point A to point B, Walker calls them "trans-sumers." Their on-the-go lifestyles make portable devices a necessity. "Their cell phone is practically an extension of their hand," said Walker.

Their overactive social lives necessitate looking good. "They're at a life stage where they're looking for mates. So how they look is important," said Walker.

Fun/Atics dress fashionably and spend money on products that will improve their appearance so they can remain active players in the dating game. Hair care is increasingly an important category for both men and women. To their credit, chain drug stores are injecting salon-brand hair care products into their offerings to attract the attention of these premium brand-driven consumers. Drug stores also have responded to male Fun/Atics' high-maintenance personal care regimens by expanding their men's grooming sets with skin care lines from Nivea, Old Spice High Endurance and Gillette.

Several high-growth retailers have built their businesses around offering this consumer group the image they want at a price they can afford.

"One trend you see is retailers like H&M, Target and Ikea really trying to offer this group sophisticated, high-badge value items at a great price," said Walker, adding that the definition of a value-conscious consumer has changed.

"Years ago, being a budget-conscious consumer meant that you cut corners everywhere," said Walker, adding that today's 20-somethings group their purchases into what the consumer magazine Marie Claire has coined as "splurge versus steal."

Thus, female Fun/Atics may opt to buy designer jeans, but store-brand paper towels, while male Fun/Atics might buy a PlayStation 2 video console, but a store-brand body wash. "The things that convey their identity tend to be the things they want to spend money on," said Walker.

"Fun/Atics are all about show," concluded Sirimoglu.

The LifeMatrix Segments

Fun/Atics               10%
Struggling Singles      12%
Priority Parents        14%
Home Soldiers           11%
Renaissance Women        9%
Dynamic Duos            11%
Rugged Traditionalists   6%
Free Birds               6%
Settled Elders          12%
Tribe Wired              9%

Source: NOP World

Note: Table made from pie chart.

Appealing
to Fun/Atics

                            Agree mostly

I tend to make impulse
purchases.                      169

I find shopping a great
way to relax.                   139

I prefer products that
offer the latest new
technology.                     139

I prefer stores that
specialize in one type
of product service.             138

Celebrity endorsement
may influence
me to buy.                      132

Source: MRI Fall 2003 LifeMatrix
Average index=100

Fun/Atics stats

LIFESTYLE

* Tend to be gamblers and risk-takers

* Heavier than average drinking and use of tobacco products

* Play variety of sports and games

SHOPPING

* Frequent convenience store and food store shopping

MEDIA USAGE

* Big on magazine reading, the Internet and listening to the radio

* Low TV viewing

* High interest in dating programs

PRODUCTS

* Heavy consumers of malt liquor, tequila and rolling papers

* Hondas and Toyotas in the driveway

Ricky's: where hipsters and drama queens find the latest lipstick.

Ricky's Urban Groove has built its business delighting Fun/Atics. The Manhattan-based specialty chain--some 13 stores strong with a newly opened store in Miami Beach--has created a retail haven for thrill-seekers, drama queens, drag queens and high-maintenance 20-somethings.

After all, upon entering a Ricky's store--chock full of colorful wigs, fishnet stockings, false eyelashes and a smattering of personal care brands--the urge to impulse shop strikes even the most frugal consumers. Ricky's merchandising prowess, especially when coupled with a consumer group, such as Fun/Atics, that loves to shop, translates into big sales.

Ricky's is the brainchild of Ricky Kenig and his brother Todd. Together, the two have created compelling retail-tainment for their customers.

In-store ambiance, comprised of disco balls, mirrored walls, over-the-top merchandise and boutique-style departments, is backed with show-stopping merchandising. While the store's consumer base tends to skew younger, shoppers of all ages head to Ricky's in search of hard-to-find salon brands, such as Kerastase by L'Oreal.

Ricky's in-your-face approach to merchandising has been known to raise a few eyebrows among its more conservative clientele, but Fun/Atics, who are always in search of the next party, eat it up. Ricky Kenig understands that his hip, young shoppers look to trendsetting fashion designers, such as Marc Jacobs, for inspiration on how to wear their makeup and hair.

Moreover, unlike some of the store's more conservative passersby, Fun/Atics know to look past Ricky's risque, at times gaudy storefront windows. The stores' Studio 54-esque interiors are filled to the brim and often include a curtain-cloaked backroom filled with merchandise only patrons over 18 years old can see.

Ricky's aisles are filled with personal care brands one. would find at a drug store, along with pricier specialty lines, such as Burt's Bees and Dirty Girl, and salon hair care brands like American Crew, Rusk and ARTec, which tend to be extremely attractive to brand-conscious Fun/Atics. And while Fun/Atics tend to have a "make it, spend it" mentality, Ricky's offers a deep selection of private-label products across several categories to allow cash-strapped Fun/Atics to do a little impulse shopping, as well.

Fun/Atics enjoy shopping and even view it as a recreational activity. Ricky's merchandises its stores around the premise that everything in life, particularly shopping, ought to be fun. Ricky's treasure-hunt atmosphere has earned the funky retailer a spot on Fun/Atics' shortlists.

First homes need stylish, but not-too-pricey wares.

Fun/Atics, or unattached 20-somethings, have either just settled into their first house or apartment or have traded up recently to a new pad. In either case, they need stuff--ranging from a shower curtain to pots and pans. Their lack of basic household items necessitates a serious shopping trip. Because Fun/Atics are just starting their careers, they generally don't have tons of cash to spend on items such as towels and sheets. And they certainly don't want these purchases to eat into their entertainment funds. However, because Fun/Atics are generally single and kid-free, they often view their entire paychecks as discretionary income.

That's not to suggest they are willing to spend big on basic household items. They will head to retailers that promise cost savings and one-stop shopping. Through their marketing messages, Bed Bath & Beyond and Target have done a good job of attracting this "just getting settled" consumer group.

Among Fun/Atics, the value, ready-to-assemble furniture retailer Ikea has become known as the "go to" furniture and home-accessories store. Its trend-right merchandise appeals to Fun/Atics, who often have expensive tastes, but limited budgets.

Target appeals to this group through exclusive merchandising deals with designers such as Michael Graves--whose line ranges from appliances to games--and exclusive brands, namely Swell, a bedding and home line created by fashion designer Cynthia Rowley and writer Ilene Rosenzweig.

As much as Bed Bath & Beyond, Ikea and Target are destinations for Fun/Atics looking to establish a livable household, drug stores help these young consumers fill their kitchen cabinets and pantries with basic goods, as well.

In fact, several drug stores--CVS and Walgreens included--offer a range of household items. The depth of their offerings vary according to store location. A CVS store located in busy mid-town Manhattan stocks everything from floor mops to the portable Shark Turbo Hand Vacuum.

What's more, a Walgreens store located in Hatboro, Pa., a suburb of Philadelphia, carries big-box appliances such as microwaves, Brita water purifiers and George Foreman Grills. Also on hand are kitchen accessories, such as can openers and dish towels.

Such extensive selections allow the Fun/Atic, who is not much for planning ahead, to run into a drug store for overlooked household items, such as a much-needed corkscrew for a party she is hosting that evening.

COPYRIGHT 2004 Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
COPYRIGHT 2004 Gale Group






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