Teens Are Shopping Differently, And That Could Spell Promise, Or Trouble, For These Brands
Updated: Nov 18, 2019
The latest Piper Jaffray teen survey showed American teens are cutting back on spending, but they still will spend for things including food and athleisure.
Learning how teens spend has been a years-long effort for retailers because their likes and dislikes can decide the fate of a brand or a season. Cracking the code on today’s teens, dubbed digital natives, is no exception.
As retailers gear up for the industry’s critical holiday sales season, the latest reading on teens may offer some cause for worry: Teens, part of Gen Z, have lowered their self-reported annual spending by 4% from a year earlier, to $2,400, the lowest level in eight years, investment bank Piper Jaffray reported in its Taking Stock With Teens fall survey, released Tuesday.
One culprit: About a third of the teens, up from a quarter a year earlier, said they believe the economy is getting worse, according to the survey, which polled 9,500 teens across 42 U.S. states, with an average age of 15.8 years.
But that’s not the only reason. Female teens’ spending on handbags has hit a new low of $90 a year in the 38th edition of semi-annual survey, less than half of the record $197 reported in the spring 2006 survey. Cosmetics spending also declined more than 20%, to $106, from a year earlier.
Overall, the survey’s results echo other findings associated with today’s teens. For instance, they care about social and political issues including global warming, immigration and gun control. To do their part for the environment, nearly half of the teens said they are changing their habits, including using more metal straws, recycling more and using less plastic.
Here are other takeaways:
The preppy-style teen uniform is out: Mirroring fashion brands’ performance scorecards, the survey showed athletic labels dominate teens’ top fashion preferences. Lululemon hit a new survey high as the No. 7 preferred apparel brand and catapulted to No. 2 among upper-income female teens. Nike, whose stock recently jumped to a record high after it posted better-than-expected results, remained the No. 1 shoe and clothing label for teens.
Skate shoe Vans remained teens’ No. 2 favorite footwear brand, followed by Adidas and Converse. Plastic-clog maker Crocs saw the biggest jump, rising to the No. 7 shoe spot, from No. 13.
“The casualization of fashion continues,” said the 70-page study, adding that preppy brands including Ralph Lauren, Sperry and Vineyard Vines continue to lose share among teen apparel makers to athletic labels. The teen fast-fashion label Forever 21, which recently filed for bankruptcy protection, saw its favorite apparel brand share among teens decline 2 percentage points, to 3%, over the past year.
Accessible luxury handbags are losing favor: As handbag spending hit a new survey low, Michael Kors, Kate Spade and Coach saw their combined favorite-brand share among female teens decline to 49%, from 57% last year. Michael Kors, while still No. 1, saw its share slump to 27% this fall, from 36% in spring 2018.
European luxury brands including Louis Vuitton and Gucci, on the other hand, picked up mind share among teens, thanks partly to online resale platforms including The RealReal and StockX that give them “access to luxury for less,” according to the report.
Food takes the biggest chunk of teens’ wallet share: Food has continued to outpace clothing as the biggest spending category for teens, the study showed. For instance, restaurants represented 23% of spending among upper-income teens in the most recent survey, topping clothing at 21%.
Where teens are eating doesn’t bode well for full-service restaurants: The percentage favoring limited-service restaurants has jumped to 68%, from 44% ten years earlier.
Their favorite restaurant? Chic-fil-A, followed by Starbucks and McDonald’s in the top five for both upper-income and average-income households. Fast-casual and fast-food chains Chipotle, Dunkin’ and Taco Bell rounded out the top five for either of the income groups. Olive Garden was the only full-service chain to make the top five.
Amazon is cultivating a bigger teen following: 52% of teens voted Amazon as their favorite e-commerce site, up from 47% a year earlier. Nike, in second place, trailed far behind, with a 4% mind share.
Amazon’s major rival eBay, No. 5 with a 2% share, “continues to face mind share challenges with teens,” according to the study. Amazon’s major brick-and-mortar rivals Walmart and Target didn’t make the top ten. In another sign of Amazon’s growing popularity with teens, it’s become the No. 5 beauty-shopping destination for them, up from No. 17 a year earlier, according to the survey.
“Amazon remains well positioned to take share of overall retail sales, and having the support of the teen (demographic) is critical,” the study said.
Amazon isn’t just winning teens from the upper-income household bracket, either. With the Amazon Prime adoption rate among teens rising to 78%, from 74% a year earlier, the study found the growth was led by teens from the lowest household-income bracket ($21,000 to $41,000).