Dive Brief:

• Teens tightened their budgets this spring as the coronavirus worsened and more people self-quarantined. Self-reported spending for the age group fell 13% year-on-year and 4% sequentially from Feb. 17 to March 27, reaching the lowest point since the fall of 2011, according to the latest semi-annual survey of Gen Z habits from Piper Sandler.
• Food remains teens' top priority with a 25% share of spending, up from 23% in the fall. Chick-fil-A landed as the No. 1 preferred restaurant brand for the age group, besting Starbucks, which still commanded a double-digit share. Chipotle also made notable gains over the period, Piper Sandler said.
• Cosmetics spending among females slid to a 10-year low with a more than 26% year-on-year drop, while spending on handbags hit a new overall survey low. Nike fortified its position as the top footwear and apparel brand, while Lululemon scored a survey-best spot as the No. 6-ranked apparel brand.

Dive Insight:

Piper Sandler's 39th semi-annual survey of teen habits indicates that the age group is taking the coronavirus seriously, with concerns over the pandemic and its effects on the economy resulting in an adjustment in spending habits. A more conservative sentiment from Gen Zers could create an adverse effect on categories that were already under pressure heading into the pandemic, but also fortify brands in sectors like food and apparel that have established loyalty with the otherwise elusive cohort.

Nearly half (47%) of Gen Zers said they believe the economy is getting worse, and the coronavirus ranked as No. 2 among the group's top social and political concerns of the moment, falling only behind the environment. Piper Sandler surveyed 5,200 U.S. teens with an average age of 16.2 years for its research, and several participants took the survey while self-quarantined at home.

Perhaps unsurprisingly, cosmetics felt a sharper plunge in spending among young women, who are going out less as shelter-in-place policies take hold. Beauty trends already popular with female Gen Zers, such as the "VSCO girl" aesthetic, have leaned toward more natural looks, which could have also contributed to declines, according to CNBC.

How teens are shopping for goods like cosmetics further underpins the age group's strong preference for e-commerce. Amazon remains a top-five destination for beauty brands, according to Piper Sandler, and 53% of Gen Zers name the platform as their top e-commerce site. As nonessential retail locations continue to shutter, Amazon could firm up a reliance on its Prime delivery offerings that's already apparent among teens and is in higher demand across the board for locked-down consumers.

National restaurant chains, many of which have been hammered by store closures, similarly could grow their loyalty with teens as the cohort focuses their budgets on food. Several of the age group's favorite brands, including Starbucks and Chipotle, have quickly adjusted their business models to accommodate more delivery and mobile pickup options that fall in line with social distancing guidelines.

Teens' preferred channels for entertainment also appear to be receiving a boost with schools closed and more people stuck at home. Video consumption remains a huge diversion for Gen Zers, with 33% of daily consumption dedicated to Netflix, followed by YouTube at 31%. Disney+, the entertainment giant's streamer that launched last November, commands 7% of daily video consumption among teens, per Piper Sandler.

On social media, Instagram continued to be the most-frequented platform by teens for the fourth consecutive survey, Piper Sandler said. TikTok, whose preference has climbed quickly among the age group, debuted in third place.