Dive Brief:

• Teens’ top brands for cosmetics, apparel, footwear and restaurants have remained the same, while there has been some volatility amid lower ranked brands, according to Piper Sandler’s 46th semi-annual Taking Stock With Teens report.
• E.l.f. Beauty remains the top cosmetics brand, jumping 13 points YoY to 29% for women consumers. Nike remains the top brand for both apparel and footwear and Chick-fil-A remains the top-ranked restaurant among this age group. Meanwhile, New Balance surpassed Vans as the fourth favorite footwear band, while Sephora passed Ulta for the top beauty shopping destination.
• Teen self-reported spending decreased 1% year-over-year to $2,316, the first time a decrease has been observed since before the pandemic. Average spending by male teens is up 11% YoY, but spending by women is down 8% YoY.

Dive Insight:

As the spending power of Gen Z continues to grow, understanding where and how they spend their money is of paramount importance to marketers. Piper Sandler’s semi-annual survey evaluated top brands for this cohort, along with changes in spending habits. While spending among men is up and spending by women is falling, several brands have been able to carve out a loyal place among consumers, with E.l.f. making significant gains.

The survey also measured how teens spend their time on mobile and digital channels. TikTok improved 80 bps versus spring 2023 and remained the favorite social platform of teens (38%) followed by Snap (28%) and Instagram (23%). YouTube (29.1%) gained 100 bps versus spring 2023 while Netflix (28.7%) lost 220 bps over the same period when measuring how teens spend their daily video consumption. Meanwhile, Spotify made small gains in usage (70% up from 68%) and subscribe/pay rates (46% up from 44%).

Since the fall of last year, Gen Z consumers have started to show a preference for off-price and online-only retailers, up 545 bps/YoY and 121 bps/YoY, respectively. Discount retailers saw the largest decrease YoY, falling 440 bps. Over half of respondents (55%) said Amazon was their favorite e-commerce site, followed by Shein, Nike, Goat and Temu.

Despite the decrease in spending by female consumers, the “core beauty wallet,” consisting of cosmetics, skincare and fragrance, was up 23% YoY to $324. Cosmetics made up the highest percentage of beauty spend at $127, the highest level since 2019. Sephora passed Ulta as the preferred beauty shopping destination. Additionally, Sephora had a loyalty membership at 67%, higher than Ulta’s at 60%. In footwear, New Balance gained about 200 bps of mindshare YoY while Vans lost about 350 bps of mindshare YoY, while On Running and Hoka One One overindex as preferred athletic footwear brands for upper income teens.

The spending slowdown may be spurred by growing economic woes among this age group, with inflation becoming a top-of-mind issue for many young consumers, according to Piper Sandler.

“Our survey points to initial signs of a slowdown in teen spending. Inflation reached its highest mindshare in terms of political and social issues, right behind the environment,” said Edward Yruma, senior research analyst at Piper Sandler, in a press release.

The survey was conducted between Sept. 4 and Sept. 27 and includes responses by 9,193 U.S.-based teenagers.