Gen Z back in love with denim, streetwear, plus Supreme, Dunkin’ Donuts, iPhones and Snapchat – surv
Adidas – tick. American Eagle Outfitters – tick. Supreme – tick. Vans – tick. Snapchat – tick. iPhone – tick, tick, tick. Yes, they’re all brands that win big in the latest six-monthly Piper Jaffray Taking Stock with Teens survey.
That’s good news for their bottom line because we all know the positive impact ‘pester power’ is likely to have on their balance sheets come the Holiday season (and the impact it probably had during the Back-to-School/College shopathon too).
But what about the brands losing favour with Gen Z? Where does that leave Facebook, Under Armour and Steven Madden that are losing teen appeal?
Well, probably not on skid row just yet, but certainly agonising over how to reach a group that already has significant discretionary cash (around $380bn, or 7% of total US retail spending) and whose spending power is set to explode over the next decade.
So, let’s look closer at the survey. As mentioned, Piper Jaffray conducts it twice a year, which makes it one of the most sensitive to trend-based shifts of any. And because it speaks to around 6,000 teens, it’s also a lot more rigorous than some surveys with a much lower sample size.
For a start, 23% of teens prefer to shop at speciality retailers, but that’s down 3% year-on-year. But pureplay e-commerce is becoming more popular. Some 17% of teens prefer it, level with the result of this spring but up 2% year-on-year.
And what’s their favourite pureplay? Yep, teens increasingly prefer Amazon. It has a 49% share – up 9% year-on-year.
Fashion ups and downs
When it comes to apparel, the appeal of athleisure is slipping, the survey shows. Not that it will go away completely any time soon, but for teens, other trends are taking its place. Only one-third of teens say that athletic apparel brands are their favourites now, compared to 40% just six months ago. Instead they’re favouring denim, street brands and festival looks, the latter perhaps reflected in Birkenstock finally breaking into the top five preferred footwear brands for upper-income teens.
But while athleisure is waning, there’s no shift away from athletic footwear and even in clothing, athletic brands remain strong.
Nike is still Gen Z’s top clothing brand, but it has fallen from 29% with only 23% of teens now putting it at number one. A resurgent American Eagle Outfitters and adidas are picking up the slack. AEO stays at number two this year but has increased its share, albeit only to 11%, while adidas has doubled its share to make its number three on 4%. It’s particularly popular with guys.
Nike remains top footwear brand too, with 46% of teens rating it number one. But its share is falling and adidas has picked up what Nike has lost. That means the German gaint is now in third place on 11%, behind second-placed Vans on 12%, and ahead of Converse (7%).
The tastes of male Gen Z consumers were key this year and in particular helped push Vans higher and drove Supreme’s rating sharply higher into the top 10, too. And Tommy Hilfiger also hit the top 20 for the first time, again helped by males.
And it’s clear that a blend of athletic and street is proving key at the moment. “Brands such as adidas, Puma and New Balance has been capturing more mindshare as teens gravitate towards that 1990s retro look,” said Erinn Murphy, Piper Jaffray’s senior research analyst.
So what about the brands losing favour? Nike has seen it ratings dip despite still being hugely popular, but Ralph Lauren, Steve Madden, Ugg, Fossil and Michael Kors also saw the largest declines among major brands. In fact, Ugg fell out of the top footwear 10 for the first time in over a decade.
Victoria’s Secret was also missing and Nordstrom was absent for the second consecutive year.
Under Armour seems to have an image problem with teens, too. It had already started to slip last time and it’s again number one for males as the “old brand” they no longer wear. It doesn’t reach that lofty height among teen girls, but still only got one vote for preferred apparel brand.
Also losing favour is the handbag category in general. Only 25% of females say they plan to buy a new handbag soon, down from 37% only six months ago, and 41% as a multiyear average. The top three brands remain Michael Kors, Kate Spade and Coach. Louis Vuitton is number four and Vera Bradley number five, but Calvin Klein has entered the top 10 for the first time (do we have Raf Simons to thank for that?), hitting number eight for upper-income females and number 10 for average incomes.
Overall, teen spending has dropped 4.4% year-on-year this time, while parent contribution to teen spend at 67%, just below the long-term average of 68%. Fashion retained its share at 38% of the total, although when this is divided between apparel, accessories and footwear, food remains the top single category.
Wallet shifts in autumn 2017 include a slight downtick for video games, a slight uptick for clothing, and moderate downtick for food. Food ticked down from 24% in spring 2017 to 22% in autumn 2017, but remains larger than clothing at 20%.
Gen Z is big on eating out but they’re spending less at restaurants. Restaurant spending dipped to 22% of the total share from 24%. This time last year McDonald’s was number one and two years ago it was Panera. This time? Step forward Dunkin’ Donuts, which was last number one three years ago. For average income teens, Buffalo Wild Wings was number one.
When it comes to teens and technology, Snapchat is the preferred social media platform with 47% of them using the platform – up an impressive 12% year-on-year and over 7% quarter-on-quarter. They also like Facebook’s Instagram but Facebook itself is regularly used by only 45%, down from 51% this spring.
Does Instagram represent a threat to Snapchat? Of course. There’s a lot of user overlap and Piper Jaffray said that “Instagram is a better channel for branding, has better ad units, and stronger advertiser engagement.” But Snapchat doesn’t appear to be on the ropes just yet, as its growth in the latest survey shows.
Worried about Apple’s future? Don’t be. Some 82% of teens expect their next phone to be an iPhone, which is up from 81% in spring 2017, and more importantly, the highest ever seen in the survey. Some 78% of Gen Z already own an iPhone, up 2% from the spring and 4% on last year.
They don’t like the Apple Watch as much with only 12% owning one but 17% say they’re planning to buy one in the next six moths, Back in the spring, the survey showed 10% ownership and 13% intention to buy.
Meanwhile those teens who expect up to half of their future video games to be digitally downloaded increased to 50% from 45%.
Netflix is the top video consumption service with 37%, ahead of YouTube’s 29%. Streaming continues to gain teen video share as preference for linear TV declined 2% since last autumn, and streaming is also getting bigger for music. Only 35% of teens listen to Pandora radio versus 49% last year as on-demand services such as Spotify, YouTube and Apple Music continue to gain share.