May 24, 2019 | By Cassandra Napoli
Experience the leading provider of consumer foresight.
Apr 12, 2018
What do teens want to buy and are they being hit by the same spending malaise as other consumer groups at the moment? It’s something that WGSN Insight report on extensively, as the purchasing power of this generation increases.
Well, in the US, it seems that food, streetwear, beauty and video games are all among the top categories on their priority list. What’s more, their spending remains healthy, rising 6% in the last six months and 2% year-on-year.
Those are results of the latest Piper Jaffray Gen Z survey of more than 6,000 US teenagers.
It discovered that the athletic-wear cycle is above the historical average, while the streetwear cycle is accelerating and teens are opting to use Snapchat and Instagram in larger numbers over Facebook (despite Facebook’s engagement beginning to stabilise).
It’s the 35th semi annual Taking Stock With Teens survey and, as a guide for discretionary spending trends and brand preferences, it’s invaluable.
This age cohort contributes $830bn to US retail sales each year and because little about that spending is devoted to dull necessities like mortgages or daily household items, it really is the strongest reflection possible of just what these teenagers desire and buy.
Food is their top spending category, but nothing so mundane as weekly groceries. Instead it’s all about eating out and it seems to have accelerated this time, returning to a peak at 24%.
For males, video games remain important and have reached a new high of 13%, which means they’re now rivaling male fashion spend. For females, beauty is key and again, is gaining share. It hit a new high at $368 a year, led by skincare, which is up 18% year-on-year.
It’s interesting, given how fond Gen Z remains of shopping in physical stores, that department stores and legacy channels “continue to shed share as online hits new highs”. It could be concerning for shopping mall operators that have always been traditionally reliant on the teenage segment as the one consumer group devoted to hanging out in shopping centres.
Apart from food, fashion really is the major obsession for all genders. Erinn Murphy, senior research analyst at Piper Jaffray, said: “We are seeing strong signs of a brand cycle led by 1990s and streetwear styles with adidas, Vans, Supreme and Tommy Hilfiger as the most notable positive brand movers”.
The researchers said that streetwear has seen the largest incremental gains led by Vans (which is the top footwear brand), and Supreme (which is the seventh placed apparel brand, despite it being unaffordable for many in this group). It looks like a complete 1990s revival within this consumer group, with Champion and Tommy Hilfiger both riding high and benefiting from strong marketing activity.
The survey also showed that Adidas is the third placed fashion brand overall, with a 14% share of footwear and 6% share of clothing.
There are, however, a few brands that are on the decline amongst Gen Z.
Ralph Lauren has been in the top 10 for males since 2002 but has now dropped out of that list. Additionally, eBay’s mindshare is at its lowest level yet recorded with a 1.8% share compared to 3% just last autumn.
But Apple’s iPhone is still riding high – in fact it’s at a new high with intent-to-buy running at 84% of survey respondents. That’s up from 82% six months ago since when the iPhone 8 and X have both launched.
Back with fashion, Nike’s mindshare may be falling but it remains the top clothing brand overall at 23% and also the top footwear brand at 42%. American Eagle is second in the clothing list on 10%, ahead of Adidas at 6%, Forever 21 at 5% and Urban Outfitters also at 5%.
The top handbag brand is Michael Kors at 28%, in front of second-placed Kate Spade at 17% and Coach at 14%. Gucci is on 9% and Louis Vuitton on 7%.
Amazon is still the top shopping website at 44%, with the remaining top destinations way behind it. Nike is second at 6%, American Eagle third at 4%, with Urban Outfitters and Forever 21 on 3% each.
With beauty being so important, it’s worth knowing that Sephora is the top destination on 44%, although Ulta has a healthy 28%. Target is on 11%, CVS and Walmart on 3% each. And the brands Gen Z likes? Neutrogena is in the lead on 24%.
As we’ve seen, food is a key priority, less as a daily necessity and more as a social activity. Teens’ favourite restaurants and cafes include Chick-fil-A on 13%, Starbucks on 12%, Chipotle on 7%.
Other activities that they spend a lot of time on include video consumption with 39% viewing Netflix daily and 30% YouTube. Some 20% watch cable TV, 5% Hulu and 6% other streaming services.
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