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--:-- Jessica Mendoza: Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza.
--:-- Ryan Knutson: And I'm Ryan Knutson.
--:-- Jessica Mendoza: Today, we're talking about the power of tween spending. Our colleague Javi Lieber has been following this story and joins us now.
--:-- Javi Lieber: Thanks for having me on the show.
--:-- Jessica Mendoza: Every day, 17-year-old Demetra Diaz looks at her closet and decides what to wear. And when she does, she hits record on her phone and makes a video.
--:-- Javi Lieber: Demetra started making these kinds of videos about a year ago. Since then, she's done some typical high school things, gone to prom and finished 11th grade. But she's also had some not-so-typical experiences, like collaborating with clothing brands and pulling in 3 million followers on TikTok.
--:-- Ryan Knutson: Our colleague Javi Lieber reports on internet culture and has been following Demetra. She loves shopping. She loves clothing. She has great style.
--:-- Javi Lieber: This is all stuff I already have, and I'd recommend for you for back to school. First, let's start with jeans.
--:-- Jessica Mendoza: Some of Demetra's top videos, they have, you know, she has 29 million views and it's just her shopping for low-rise jeans.
--:-- Javi Lieber: So I thought, you know, there's definitely something here. I think this is a combination of TikTok boosting her videos, but also just the power of Gen Alpha engagement on TikTok.
--:-- Ryan Knutson: Gen Alpha. That's the generation of kids born after Gen Z. Demetra's average TikTok follower falls in that demographic, mostly kids who are about 8 to 12 years old, also known as tweens.
--:-- Javi Lieber: And Javi found that these tweens are spending a lot of money, buying things that teenagers like Demetra are posting about.
--:-- Jessica Mendoza: Her influence is pretty astounding. You know, I talked to this one brand, and the CEO had told me that anything that Demetra posts, like, they just totally sell out.
--:-- Ryan Knutson: She just has comments and comments and comments and comments. Where's that hoodie from? Like, 400 times.
--:-- Jessica Mendoza: Welcome to The Journal, our show about money, business, and power. It's Wednesday, September 4th.
--:-- Ryan Knutson: Coming up on the show, the power of tween spending. creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands.
--:-- Jessica Mendoza: This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars.
--:-- Ryan Knutson: I'm so excited to embark on this adventure with all of you. Make the best idea win! On Brand with Jimmy Fallon. Series premiere Tuesday on NBC.
--:-- Ryan Knutson: This episode is brought to you by State Farm. Checking off the boxes on your to-do list is a great feeling. And when it comes to checking off coverage, a State Farm agent can help you choose an option that's right for you.
--:-- Jessica Mendoza: Whether you prefer talking in person, on the phone, or using the award-winning app, it's nice knowing you have help finding coverage that best fits your needs.
--:-- Ryan Knutson: Like a good neighbor, State Farm is there.
--:-- Jessica Mendoza: In June, Javi drove to Demetra's home in northern New Jersey to see her in action. At the time, Demetra had about 2.5 million followers.
--:-- Javi Lieber: So show me. So. Yeah. Okay. Oh, what's all this? These are packages.
--:-- Jessica Mendoza: I ended up you know spending time with Demetra. I went to her house. Is this where you record? Yes. We made some TikToks together. It's not like I'm not here. Okay, so I pick out like my outfits for the video.
--:-- Javi Lieber: We went through her closet. This was, like, my spare room, and I kept, like, all my boxes, but now... Oh, stop! Now it's my closet.
--:-- Jessica Mendoza: Demetra, this is crazy. Every week, roughly half a dozen boxes arrive at Demetra's doorstep. They're filled with things that companies want Demetra to show off in her videos.
--:-- Javi Lieber: Things like sweatshirts and tank tops and jeans. It's the kind of stuff teens and tweens would wear.
--:-- Jessica Mendoza: And the kind of thing Demetra was wearing when her videos started going viral.
--:-- Javi Lieber: Like, what were you wearing? I was wearing these jeans. Are they low-rise? Yeah, they're low-rise, baggy. Of course. That's what started it.
--:-- Jessica Mendoza: It was, like, my, like, outfit. It just went from, like, 1,000 to, like, 10,000. And it just kept growing.
--:-- Javi Lieber: It was more of like a realization because I can never imagine 2.5 million people like in a room.
--:-- Jessica Mendoza: And a secret to Demetra's success is that she's relatable. She seems like a fun, nice, cool, big sister.
--:-- Javi Lieber: If you look at the comments, it's so much like, you radiate positive energy or you seem so sweet.
--:-- Jessica Mendoza: And I think it's important to note that for kids on TikTok, this is so much more relatable than a Kardashian or a celebrity.
--:-- Javi Lieber: Whereas Demetra is, she's going to be a senior in high school. She lives in New Jersey. She studies for chemistry homework.
--:-- Jessica Mendoza: Like, I think for the kids that follow her, you're more likely to want to buy what she is promoting.
--:-- Javi Lieber: A lot of Demetra's posts lead to a bump in sales for brands that she's wearing.
--:-- Jessica Mendoza: Her influence on tween shopping has even led to the circulation of a TikTok hashtag called the Dimitra Effect.
--:-- Javi Lieber: Her followers use it when they buy something she posted about.
--:-- Jessica Mendoza: One of Dimitra's followers told Javi that she changed her style and started buying low-rise jeans instead of high-rise jeans because of Dimitra.
--:-- Javi Lieber: I talked to this one brand, Amare, which is a new teen-focused brand. And the CEO, she did a Valentine's Day collaboration with Demetra and it sold out in like an hour and made $90,000 in sales.
--:-- Jessica Mendoza: It's interesting because when you think about tweens, you know, between the ages of 8 and 12, like, I feel like I don't really think about them going around, you know, dropping dollars, like spending a bunch of money.
--:-- Javi Lieber: They're kids. Well, you need to remember, like, this is generation internet. And so if you think about how technologically savvy they are, by the time they hit, you know, 8, 9, 10 years old, a lot of them already have smartphones and a lot of them are already on social media.
--:-- Jessica Mendoza: That's where they see fashion trends and stuff. And so they are very big shoppers.
--:-- Javi Lieber: And like the demographic that I'm talking about most likely have their own smartphones or some sort of iPad and have access to the Internet and are either using their own babysitting money or allowance money to go shopping or they're using their parents' credit cards.
--:-- Jessica Mendoza: Right. So they have they have the means and have the access, basically.
--:-- Javi Lieber: OK. And so what are tweens buying these days? So denim and status sneakers, accessories and purses.
--:-- Jessica Mendoza: And for boys, it's skater denim, also sneakers. Skincare. Teens are obsessed with skincare.
--:-- Javi Lieber: They love a lot of the same type of status accessories. So if you walk around the mall, you'll probably notice the exact same Lululemon crossbody bag.
--:-- Jessica Mendoza: They like status water bottles like a Stanley cup.
--:-- Javi Lieber: This demographic is pretty homogenous. They kind of all dress the same. They want the same trends.
--:-- Ryan Knutson: Were we like that? I think so. Honestly, I think so.
--:-- Jessica Mendoza: I keep thinking about this quote from the original Mean Girls where you know someone goes I saw Katie Heron wearing army pants and flip flops so I bought army pants and flip flops.
--:-- Javi Lieber: Yes, yes.
--:-- Ryan Knutson: A big difference is kids today are starting to shop at a much younger age and they're spending more.
--:-- Jessica Mendoza: One survey of parents found that on average, 8 to 13-year-olds in Los Angeles spend $54 a week. In New York, they spend $76 a week.
--:-- Javi Lieber: So that, I mean, that is way more than like the $2 allowance that I got.
--:-- Ryan Knutson: Right, I was going to say. I was buying like a book a month or something like that.
--:-- Jessica Mendoza: Yeah, exactly. Kids are shopping and becoming indoctrinated, if you will, into consumer habits earlier and earlier.
--:-- Javi Lieber: They're getting most of their content on TikTok. So there is like TikTok shop or shopping on Amazon or shopping with their parents online.
--:-- Jessica Mendoza: I think that makes this generation a little bit different from ours.
--:-- Ryan Knutson: And brands are trying to take advantage of this generation's shopping habits. That's next.
--:-- Jessica Mendoza: My marathon isn't about time. It's about my 26 friends with intellectual disabilities I'm dedicating each mile to. I'm Joseph. I'm running my first Bank of America Chicago Marathon for Special Olympics Illinois to help give my friends a place to shine.
--:-- Ryan Knutson: Join Bank of America in supporting Joseph's cause. Give if you can at bofa.com slash support Joseph.
--:-- Jessica Mendoza: What would you like the power to do? Bank of America. References to charitable organizations is not an endorsement by Bank of America Corporation.
--:-- Ryan Knutson: Why shop at Burlington? Maybe it's the deals that are new each time you drop by. Maybe it's the brand names you'll be shocked Burlington has in store.
--:-- Jessica Mendoza: Or maybe it's the quality of the items, the amazing selection, and the newest trends.
--:-- Ryan Knutson: If you like to save but also like to stay in style, Burlington is your answer. And the question you'll be asking yourself is, why go anywhere else? Burlington. Deals. Brands. Wow.
--:-- Jessica Mendoza: Brands have been using influencers to market their products for years. But the amount of money they're spending on those influencers is growing by leaps and bounds.
--:-- Ryan Knutson: Here's our colleague Javi Lieber again. The influencer marketing budget, it just gets higher and higher.
--:-- Javi Lieber: I read a report that brands are going to spend $24 billion on influencer marketing this year. As opposed to in 2022, it was half of that.
--:-- Jessica Mendoza: More recently, companies have started to catch on to how teens and tweens are spending money on stuff they see on social media.
--:-- Ryan Knutson: And to tap into that behavior, brands have been turning their attention to even younger influencers.
--:-- Javi Lieber: Everybody wants to work with teen influencers because they have power and sway over what kids are buying.
--:-- Jessica Mendoza: Like I can tell you, when I interviewed the CMO of Steve Madden, And they said that they are going to be working more with teen influencers because it works so well for them.
--:-- Ryan Knutson: Some brands pay influencers to promote their products. Anything from a few hundred bucks up to a million for some of the biggest names like Kim Kardashian.
--:-- Javi Lieber: Someone like Demetra, who has a huge following, can charge something like $20,000 for a single post on TikTok.
--:-- Jessica Mendoza: Other times, companies will send young influencers free products, hoping that they'll post about the product and spread the word about the brand.
--:-- Ryan Knutson: Many of the companies working with young influencers are teen and tween focused. But even brands that sell mainly to adults, including some very high-end ones, are sending their products to these influencers.
--:-- Javi Lieber: They had gotten boxes from YSL Beauty and from Armani Beauty. And those are luxury beauty brands.
--:-- Jessica Mendoza: And the target demographic for those brands I imagine is way older. Probably my age.
--:-- Ryan Knutson: Right. Like this is between and teen shopping demographic is really important.
--:-- Jessica Mendoza: I think that a lot of brands are realizing this. So even if the shopper, the one spending money is a little bit older, they probably think it's important to get eyeballs at a younger age.
--:-- Javi Lieber: But not all tweens are going to be able to buy these high-end products.
--:-- Jessica Mendoza: I think that some of the more savvy brands are expanding their product offering to appeal to Gen Alpha.
--:-- Ryan Knutson: So for example, I reported in my story, the women's wear brand, lifestyle brand, Love Shack Fancy. It's really popular with Gen Z. And also, you know, it's pricey.
--:-- Javi Lieber: It's a pricey women's wear brand. They've been doing a bunch of Gen Alpha focused collaborations.
--:-- Jessica Mendoza: For example, They just put out body mist sprays, you know, so kids can't really spend $250 on a skirt, but they could buy like a perfume spray.
--:-- Ryan Knutson: Javi, why is it important for brands to pay attention to how tweens are spending money?
--:-- Javi Lieber: Big picture, this is a very important shopping demographic for a couple of reasons.
--:-- Jessica Mendoza: First of all, they are the future shopper. When I spoke to CEOs and brands for this story, everyone talked about customer loyalty.
--:-- Ryan Knutson: You know, so if a sneaker company or denim company hooks a kid at a young age, they'll be more likely to shop with them as they get older.
--:-- Javi Lieber: And then I also want to say they influence their parents. They influence their older siblings.
--:-- Jessica Mendoza: I spoke to so many moms when I was reporting about tweens buying skincare. You know, the moms were like, I don't know what any of these ingredients are.
--:-- Ryan Knutson: But my 13-year-old is telling me that I need hyaluronic acid.
--:-- Javi Lieber: Yeah, they're like little dermatologists now.
--:-- Jessica Mendoza: So they really do influence their family members and their parents and their siblings.
--:-- Ryan Knutson: And that impacts a brand's bottom line.
--:-- Jessica Mendoza: Are there any concerns for the tweens or teens when it comes to brands being able to reach them so easily?
--:-- Javi Lieber: Sure, there are parents who are annoyed that their daughters are now thinking about moisturizer and crop tops.
--:-- Ryan Knutson: There's also the discussion of internet safety and who is watching these videos and who gets to interact with teens online.
--:-- Jessica Mendoza: Which is why I think it's super important for parents to know about this. They should know what their kids are consuming, who is influencing their teenagers to buy what and why.
--:-- Ryan Knutson: And to sort of like engage in the conversation because so many teens are already on TikTok.
--:-- Jessica Mendoza: What does it say about the kind of power that tweens have today when it comes to spending?
--:-- Javi Lieber: The consumer appetite is just skewing younger and younger.
--:-- Ryan Knutson: Also, because this demographic just shop, shop, shops, they want more, more, more.
--:-- Jessica Mendoza: They have the power to really swing a business's bottom line.
--:-- Ryan Knutson: You know, if you're popular with a teen demographic, that can really help your brand become hot, especially on TikTok.
--:-- Jessica Mendoza: What's your takeaway, Javi?
--:-- Javi Lieber: I don't really want to give my kids a credit card ever. I mean, truly. Truly, truly.
--:-- Ryan Knutson: That's all for today, Wednesday, September 4th. The Journal is a co-production of Spotify and The Wall Street Journal.
--:-- Jessica Mendoza: If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon.
--:-- Ryan Knutson: Thanks for listening. See you tomorrow.
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