Pencils, Pensand PDAs?

Nearly every family with school-aged children buys clothing, shoes and three-ring notebooks during back-to-school season. But some retailers and several brand manufacturers are trying to spark more interest in another major product category — electronics — as parents stock up for their teens and tweens.

Recent research by the National Retail Federation suggests that 44% of back-to-school shoppers this fall will purchase electronics, up from last year’s 41.7% — but will spend $1 billion less. Consumers polled in June said they will spend an average of $68.08 on electronics, down from last year’s $101.03, meaning the overall spend is expected to fall from $3.09 billion to $2.06 billion.

“We were a little surprised when we saw those figures,” says NRF VP Scott Krugman. “But people have been aggressively buying computers for their kids during the last two years. Computers are like cars: you buy one, then don’t need another one for a couple of years — so electronics spending should be down next year as well.”

Electronics retailers have begun digesting the NRF findings. Office Depot believes parents will still make computers a priority for teens and tweens this year.

“According to our research, 60% of parents think a computer is the top-priority purchase for their children’s success,” says Ivan Reed, marketing manager for the Delray Beach, FL-based retailer. “We’ve had successful back-to-school computer sales the past two years, and we think we’ll be successful again this year.”

Office Depot’s primary audience is small-business customers, but back-to-school is still crucial each fall. A Valpak coupon program and sweeps offer via 43 million mailings will plug its Coolest Ride To School sweeps. The program showcases Office Depot’s sponsorship of NASCAR driver Carl Edwards, who will drive the grand-prize winner and three friends to school in the No. 99 Office Depot car. Mailings dropped July 27.

The promotion asks consumers to enter in stores. Once there, a bundled HP Pavilion with a Pentium 4 processor, a 15-inch flat screen monitor and a printer will be centerstage, priced at under $600 after rebates, Reed says.

Though he is pushing the bundle, Reed says laptops are surpassing desktops, in terms of gross volume, as families look to upgrade kids’ machines. Portable thumb drives, a.k.a. flash drives, are another big seller, as more teachers ask students to transport homework assignments on them. Reed notes they can be used on any computer with a USB port, and with 1 gigabyte of storage space, can hold as much info as 700 floppy disks.

PDAs, such as Palm Pilot, are becoming a more popular purchase for school use, NRF’s Krugman says, although most are purchased by or for teens. The portable communication devices are becoming more accepted in schools, since teachers encourage their use in homework management.

And although Office Depot’s unofficial motto is “Tools, Not Toys,” the retailer predicts a boom in sales of MP3 players and iPods during the fall.

“I think they are a distraction in the classroom, but iPods are something that everybody wants,” says Reed. “I have one, and my seven and 10 year-olds are always begging me for one.” Office Depot put the hot new iPod minis, which range in price from $199 to $249, on its shelves last month. They sit alongside the original 20 and 60-gig iPods ($299-$399), and the iPod shuffle ($99-$129).

Customers of the future

With or without retail support, several marketers, especially those hawking mobile phones and wireless services, have the younger set squarely on their radar. It’s about setting the pace for the future.

There’s plenty of room for growth in cell phone service for kids (estimated at 82 million teens and tweens in the U.S.), says David Garver, Cingular’s executive director-marketing, while other segments are fully penetrated.

“[Teens and tweens] are responsible for $170 billion to $200 billion in spending a year, and their pester power can influence parental buying decisions. They are also the adult consumers of the future, so we need to build a loyal following at this age.”

Tween ownership of cell phones is on the rise, says Doug Eckard, senior account manager with Alloy Media + Marketing, as more parents and schools permit their use. While cell phones may distract kids from schoolwork (most phones now have gaming, video and still photography capabilities), Eckard says parents have become more inclined to let their tweens have phones, especially if they sign up for pre-paid calling plans that limit minute charges.

“Parents want to be in touch with their children, so they are letting them have cell phones at a younger age,” Eckard says. “And let’s not forget the cool factor. A 13-year-old is all about his or her cell phone. Between sending text messages, using it as a camera and making calls, communicating by cell phone is now a 24-hour option for teens and tweens.”

Firefly Mobile is one of the few brands that target tween users exclusively. It recently released a pay-as-you-go voice-only wireless phone specially designed for smaller hands. The Firefly is about the size of a small pocket calculator and weighs just two ounces; users can choose ring tones, animations and background colors. With just five keys instead of a regular dial pad, parents use a PIN to program up to 22 outgoing numbers into the phone, including speed-dial keys (users can place calls by pressing the “Mom,” “Dad” or “Phone Book” keys, and then “Send”).

Firefly phones rolled out nationwide last month via fireflymobile.com and retailers such as Target. It also sells via Firefly kiosks at shopping malls.

“The Firefly phone provides parents with peace of mind, knowing that they can always communicate with their child; and kids love to stay connected,” says Robin Abrams, CEO, Firefly Mobile.

Parents are key, of course, since it’s their wallets that get tapped. Instead of tweens themselves, wireless provider Nextel targets parents by stressing price and safety features. Nextel’s sister company, Boost Mobile, then hooks kids with an array of ringtones, games and accessories.

“We carry two handsets that are ideal for tweens (Motorola’s i265 and i275),” says Michelle Leff, spokesperson for Reston, VA-based Nextel. “We have parents that come in and buy those models for their kids because of their low price point.” The i275, which comes in a variety of colors, has a built-in camera and simple Internet access for downloading games; it costs just $99.

Other wireless providers are teaming with manufacturers to make their mark via mall tours and concert series, knowing these are places tweens and teens are drawn. Samsung, for example, has signed up with carrier partner Cingular for a concert tour designed to lure adolescent crowds.

The two returned this summer as the title sponsors of the 49-city Vans Warped Tour, the largest summer music festival in the U.S., with 500,000 concert-goers. Last year, Samsung worked with the creators of the tour to offer scheduling updates and exclusive behind-the-scenes information and access to attendees via text messages. Additionally, Samsung and Cingular coordinated autograph sessions and on-site promotions featuring the lead musical acts.

Cingular is also partnering with 16 different Simon Mall Properties through September to put on the Cingular Sounds Live tour.

The goal of the program, handled by Alloy’s AMP division, is to increase brand awareness for Cingular and give something back to their consumers. The event kicks off three hours prior to closing at a Simon Mall, with activity centered on a Cingular-themed “village.” In the village, the audience is invited to try out new phones and enjoy performances in a DJ scratching area.

At closing time, the concert begins for Cingular Subscribers and their guests. Emerging artists, whose songs are a part of Cingular Sounds (a program that launches new singles as ringtones on wireless phones before they play anywhere else, or simultaneously with their debut on radio), perform for 30 minutes to an hour. Performers such as Brooke Valentine, Gratitude and Fatty Koo can be heard at rucingular.com.

“We’re trying to expand the reach of our customer base, but the tour is designed really to reward Cingular customers,” Eckard says.

Samsung then adapts its Vans Warped formula with carrier T-Mobile later this month when the two kick off the All Access Sponsored by Samsung tour. After hitting 10 cities, the concert series culminates in a private concert in New York City in October. The carrier and phone maker give consumers exclusive admission to concerts in which their favorite acts perform. Consumers in designated markets who purchase a Samsung phone at a T-Mobile store get a free ticket to one of the concerts.

They may not have their licenses yet, but these are the types of offers that will drive tweens to the store — with Mom and Dad in tow.