Where Mom Spends the Money

If you're the chief breadwinner in your family and you ever wonder where all the money goes, here's part of the answer:

Apparel, Entertainment Account for Much of Moms' Spending on Kids

According to a new report from The NPD Group, the categories of apparel and entertainment receive the greatest portion of every discretionary dollar spent by moms on their children.

Included in the entertainment category are products such as toys & board games, leisure activities, books, music, movies, video games, consumer electronics, subscriptions and events/concerts. Despite growing public concerns surrounding childhood obesity, the report finds that fast food and beverages capture only 12 percent of moms' total discretionary spending on their kids.

Contrary to popular belief, it is not the household income that's the main driver of moms' spending, but the age of the child that has more influence of how spending is allocated and how much is spent. Moms who only have kids older than 5 years of age spend approximately 35 percent more than moms with younger kids.

The age of the child also has a strong influence on the categories of products capturing the greatest portion of total spending. Interestingly, gender does not impact the average amount spent by category, with two exceptions: moms of girls spend more on apparel while moms of boys spend more on video games.

"Monitoring how and where parents spend money on behalf of their kids is critical information for anyone involved in the youth market," said Anita Frazier, industry analyst, The NPD Group. "There are a lot of product categories competing for a fixed amount of discretionary spending, and understanding the factors that drive purchases has profound implications for product development, marketing, promotions, and licensing for all youth-oriented products and services."

The report also looks at the factors impacting purchase decisions. Six out of 10 moms (59 percent) report that their kids have a strong influence on the purchases they make for them. Surprisingly, the category least impacted by kids' influence is apparel while video games purchases are most impacted. Brand name influences consumer electronics and footwear decisions, but is not a major factor for the other categories.

One factor that is important to purchasing decisions across all categories is the style and look of a product. Even at young ages, kids want products with appealing styles and designs.

(Source: The NPD Group, 05/27/08)

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