Gen Z spending falls to 8-year low
Thirty-two percent of teens think the economy is worsening, up from 25% who thought the same last fall, according to a Piper Jaffray survey of American teenagers. Teenagers' spending decreased by 4% year-over-year and 10% sequentially to $2,400, which is the lowest level since 2011, the survey found.
Amazon is the clear winner when it comes to e-commerce, with 52% of teens citing it as the No. 1 preferred shopping website, followed by Nike (4%) and American Eagle (3%). Nike held the top spot in apparel (23%) and footwear (42%), the survey found.
Among female teens, the majority preferred spending their money on clothing, the survey found. Piper Jaffray's research also notes that 91% of female teens like to shop in-store versus online for their beauty buys, and 89% of them also find new beauty brands through influencers. However, the survey also noted that cosmetics spending was down more than 20% from last year.
Teens could be internalizing their families' fears about America's overall economic health, which may explain their shift in spending habits. Consumers and retailers alike have been concerned for some time about the impact of an economic recession and tariffs on foreign goods.
"We saw the lowest teen spending levels in eight years. The two most challenged categories were handbags and cosmetics as females reprioritize their spending with eating out and footwear/apparel," Erinn Murphy, Piper Jaffray senior research analyst, said in a statement. "Broadly, the casualization of fashion continues."
On the upside, the report offers some insight into what Gen Z shoppers are interested in buying. Given that female Gen Z consumers look to influencers to find beauty brands and like to purchase cosmetics in-store, it's worth noting that Ulta is the leading beauty retailer (38%), followed by Sephora (26%) and Walmart (8%), the report also found.
Piper Jaffray's report also illustrates Lululemon and Amazon's continued sway with Gen Z. Per the firm's research, Lululemon peaked this year as the 7th preferred activewear brand among Gen Z compared to No. 11 last fall. And preppy brands like Ralph Lauren Vineyard Vines continue to lose share to athletic brands, with Piper Jaffray noting that 36% of the preferred apparel brands fall within the sportswear category (up from 34% last year).