Teen spending increases from pandemic lows: Piper Sandler - The Entrepreneurial Way with A.I.


Friday, April 8, 2022

Teen spending increases from pandemic lows: Piper Sandler


Dive Brief:

  • Teenagers' spending is bouncing back from 2020 levels: Piper Sandler's annual survey of 7,100 U.S. teenagers found that their self-reported spending rose by 4% from last year to $2,367. A little under two-thirds (60%) of their spending came from their parents.
  • Teens spent $264 on cosmetic, fragrance and skincare purchases, up 10% from the previous year. The survey found that Ulta was the top beauty retailer, followed by Sephora (which lost 400 basis points of market share), and e.l.f. was the leading cosmetics brand, overtaking Maybelline.
  • The teenagers surveyed spent less than a tenth (7%) of their shopping time on secondhand items. However, nearly half (46%) have bought secondhand goods, and over half (56%) have sold used items.

Dive Insight:

Despite widespread economic concerns, teens' spending seems to have picked up from the early stages of the COVID-19 pandemic. In the fall of 2020, Piper Sandler's survey found that teen spending dipped by 9% from the previous year to $2,150. At that time, nearly half of teen survey respondents thought the economy was getting worse. In the Spring 2022 survey, teen respondents said the Russian invasion of Ukraine, the environment, racial equality, gas prices and inflation were their top concerns.

Food has again become the number one wallet priority among teenagers from high-income families. That's a shift from last fall when survey respondents said clothing was a higher priority than food. While athletic clothing brands ranked high on teens' lists — Nike was the No. 1 apparel brand for teens and 44% of teens preferred athletic apparel brands — Coach and Michael Kors took the top two spots for handbags among Gen Z, Piper Sandler found.

Nike was also the preferred footwear brand for teens, and its sister brand Converse took second place away from Vans. Nike has been the top brand among Gen Z teens for more than a decade, Piper Sandler's 2021 survey found. A March report from the student affinity network Unidays found that Nike was one of the brands Gen Z viewed as exhibiting inclusivity and challenging gender norms. Lululemon also gained in popularity with teens this year, increasing its rank by 300 basis points.

Piper Sandler's research builds upon previous findings indicating that TikTok remains a top social platform for reaching Gen Z consumers. TikTok has surpassed Snapchat and Instagram as the preferred social network for teenagers. TikTok was one of the platforms Gen Z turned to leading up to last year's holiday season for inspiration, a McKinsey 2021 holiday survey found

Piper Sandler's research suggests that Gen Z isn't into the metaverse. The survey found that 26% of teens own a virtual reality device, but only 5% use it every day. Plus, just under half (48%) are either unsure of or not interested in the metaverse. A 2021 report from Wunderman Thompson Intelligence found that only 38% of consumers worldwide knew what the metaverse was. 

While alternative payment methods gained steam during the pandemic, 89% of Gen Z respondents said they used cash at some point in the past month, making it the most penetrated payment method. Apple Pay is their most commonly used payment app, Piper Sandler found, in part because the majority (87%) of respondents own an iPhone.

via https://www.aiupnow.com

Tatiana Walk-Morris, Khareem Sudlow