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Cha-Ching: Gen Z Spending Habits Shift

2 Mins read

The newest data about teens, the Taking Stock With Teens survey, recently released by Piper Sandler, an investment bank, shows that while teens spent slightly more than they did in last fall’s survey, their spending is down 6% from last spring. Piper Sandler says this is “well below pre-pandemic levels.

This may be bad news for some well-established brands selling to the teen market. A senior research analyst at Piper Sandler says the 47th semi-annual survey reveals “some significant shifts in brand preferences including the rise of smaller, innovative brands which are taking share from incumbents.”

That’s good news for newer businesses in the market. Piper Sandler attributes the shift to social media contributing to “an accelerated trend cycle including an increased emphasis on key products, and brands will have to be nimble to keep up.”

Clothing and footwear trends

Teens report they spend $2,263, up 1% from the fall. They’re spending far less on clothes. The upper-income teen girls said they spent 12% less on clothes, 13% less on shoes, and 21% less on accessories.

Their favorite brands haven’t really changed, but their share is shrinking. For instance, Nike is still the top footwear brand, but its share is down. The footwear brand that gained the most share was New Balance, while Converse lost the most.

Among upper-income teens, footwear brands on the rise include HOKA and On Running. Lululemon still ranks second in athletic apparel (among upper-income teens), but Alo Yoga and Vuori are quickly growing share.

Technology and social media trends
Teens say TikTok is still their favorite social media platform, but Instagram boasted significant improvement, booting Snapchat out of the second spot. For daily video consumption, teens’ first choice is Netflix (29% share) and YouTube (27% share).

Beauty
The stellar category in this survey was beauty. Spending on beauty reached its highest level in six years (since 2018), hitting $339, up 8% since last spring. All beauty categories grew, led by fragrances with 23% growth. The top teen beauty brand was e.l.f. Beauty, which came in first in the beauty category and in the top 10 in skincare. Most teens (85%) prefer buying beauty products in-store rather than online. Teens mostly shop for beauty at Ulta and Sephora, both of which have programs for new beauty businesses.

Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbusinesscurrents.com, follow her on Twitter @Rieva, and visit her website SmallBusinessCurrents.com to get the scoop on business trends and sign up for Rieva’s free Currents newsletter.

Photo courtesy: e.l.f. Cosmetics

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