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That means they have more disposable income to spend on their children, and they may be willing to trade up for designer clothes for their kids, said Euromonitor senior research analyst Ayako Homma.Budget conscious parents also have more options to choose from at the lower end of the scale. Walmart, for example, launched Wonder Nation, its first kids’ line, in March.Yet the pace of growth in the industry is expected to slow over the next few years as the birth rate declines and more retailers turn to discounts and promotions, noted Neil Saunders, managing director at GlobalData Retail.Related: Why diapers are in trouble: Americans are having fewer babiesSucharita Kodali, a retail analyst at Forrester Research, questioned whether parents will be willing to trade up for higher priced clothes that their kids will quickly outgrow.”The biggest challenge for the kids space is it’s an uphill battle to convince parents they need this, and then to get them to stay loyal to the program,” she said. “Stitchfix has built its business on being an alternative to Macy’s, which has slightly higher price points.

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