Sportswear on display at a Lululemon Athletica store.
Xaume Olleros | Bloomberg | Getty Images
Teens are spending more and changing their buying habits, even as they worry about growing economic uncertainty, according to a new survey.
Activewear brands such as Lululemon and Nike that combine comfort and fashion are trumping traditional clothing brands, Piper Sandler’s semi-annual “Taking Stock With Teens” report released Wednesday revealed.
Many teens say they’re unsure or uninterested in the so-called metaverse – the idea of buying goods through a virtual reality experience. Retailers like Nike, PacSun, Forever 21 and Ralph Lauren have all dipped into the burgeoning technology.
A growing number of teenagers also say they are much more familiar with NFTs, or non-fungible tokens, than they were last fall, when only a small percentage actually bought one.
But they are also increasingly concerned about the Russian war in Ukraine, the survey found, and less concerned about the Covid-19 pandemic.
The results of the biannual survey have implications for companies vying to earn this generation’s dollars. This is especially true today with the economic environment riddled with uncertainty.
Teens plan to spend about $2,367 this year on everything from fast-food meals to video games to handbags and sneakers, Piper Sandler found, for an estimated overall total of about $66 billion. This represents an increase of 9% from spending levels reported in the Spring 2021 report and 4% from Piper Sandler’s fall survey. Reported annual spending by teens peaked at about $3,023 in the spring of 2006.
Piper Sandler surveyed 7,100 teenagers from February 16 to March 22. The average age of respondents was 16.2 and the average household income was $69,298. Thirty-nine percent of teens surveyed worked part-time, up from 38% last fall and 33% last spring.
Concerns about the rising economy
Although teen spending levels have steadily improved since a low in the fall of 2020, businesses are still grappling with the question of what could derail growth and whether consumers will cut spending.
A whopping 71% of teens told Piper Sandler they think the US economy is getting worse, up from 56% last fall and 46% last spring.
When asked what political or social issues mattered most to them, teens’ top response was Russia’s invasion of Ukraine, with 13%. Next comes the environment, at 11%; racial equality, 10%; gas prices, 10%; and inflation at 4%.
The coronavirus notably fell off the list of teens’ top 10 concerns, after ranking fourth in Piper Sandler’s survey last fall as well as last spring.
Piper Sandler consumer analyst Matt Egger noted that Gen Z consumers’ continued concern about the environment bodes well for rental platforms such as Rent the track and resale companies like ThredUp and The RealReal.
Nike and Amazon retain their top spot
Meanwhile, Nike has remained the favorite clothing brand for teenagers, a spot it has held for 11 consecutive years. It also widened its margin as the preferred footwear brand for Gen Z shoppers, according to the survey, ahead of Converse, Adidas, Vans, New Balance and Crocs, in that order.
American Eagle retained its spot as the second favorite clothing brand for teens, followed by Lululemon, which moved up one position on the list from a year earlier. Fast fashion retailer H&M fell from ninth place to fourth place a year earlier. Adidas remained in fifth place.
Overall, the sports brands mentioned in the survey released Wednesday accounted for 44% of teens’ favorite clothing brands, the highest levels Piper Sandler has seen for the category. This aligns with a broader consumer shift during the pandemic towards stretchy, looser clothing to wear around the house. And many teenagers are still incorporating sports brands into their wardrobes even as they return to school and the office.
Shein, a Chinese e-commerce fashion juggernaut reportedly weighed a funding round at a valuation of around $100 billionranked seventh for teens’ favorite place to buy clothes, down from sixth in fall 2021 but eighth last spring.
According to the Piper Sandler survey, women continue to spend significantly more on clothing than men, while men spend an average of about $51 more than women on shoes each year.
Amazon remained by far the preferred website for shopping overall, with a 53% market share, up from 52% last fall. Shein remained in second place, but her teen preference share fell to 8% from 9%. Other retailers on the list were Nike, PacSun, Lululemon and Princess Polly, in that order.
When it comes to the Metaverse and platforms such as Roblox or Decentraland, 26% of teens said they own some sort of virtual reality device, with only 5% using it daily. Forty-eight percent said they were unsure or not interested in the Metaverse.