Commentary
Teens, Brands And Shopping Behavior
- by Greg Peverill-Conti , Columnist, November 28, 2014
The whirlwind of holiday shopping is underway. The National Retail Federation projects U.S. retail sales of more than $600 billion during November and December, a 3.8% increase over 2013. Per-shopper spending is expected to reach nearly $600, higher than any point in the past seven years. This is excellent news for merchants across the country.
For many retailers and brands, teens are where the action is and when it comes to understanding how and where teens spend their money there are few better sources than Piper Jaffray’s “Taking Stock with Teens” consumer insights project. It’s a treasure trove of information
For this year’s research, Piper Jaffray surveyed more than 7,000 teens. The average age of respondents was 16. Piper Jaffray classified respondents by income level: upper, those with a household income of $109,000; and average, with household incomes of $56,000. The data does not look at the spending patterns and preferences of low-income teens, which seems unfortunate.
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As with overall consumer spending, teens are increasing the amount they are planning to spend in the Fall of 2014. According the Piper Jaffray, per-teen spending across all categories will reach $2,725, its highest level since the Spring 2006. Here is the breakdown of teen spending by category:
- Clothing – 21%
- Food – 20%
- Accessories – 10%
- Automotive – 9%
- Shoes – 8%
If you roll clothing and shoes into one category (and who doesn’t?) that allows electronics and video games to slip into the top five, with 7% each.
One of the reasons that teens may be spending more is that parents are giving kids more money to spend. For upper-income teens, parents are the source of 70% of teen spending money, compared with 66% for average-income teens.
Piper Jaffray also looked at where teens shopped: online, department stores, off price retailers, etc. One of the interesting points, but one not explicitly made, is teens’ preference for in-store shopping. While most teens do shop online (boys at a slightly higher rate than girls), both groups still prefer shopping in brick-and-mortar stores. In fact, among teenage girls, the preference for shopping online has declined over the past year and a half.
One of the most interesting parts of the research are its details on brand preferences by category:
Upper Income | Average Income | |
Clothing | Nike – 22% American Eagle – 8% Forever 21 – 7% Ralph Lauren – 6% Urban Outfitters – 4% PacSun – 4% Hollister – 2% Nordstrom – 2% T.J. Maxx – 2% Victoria’s Secret – 2% | Nike – 18% Forever 21 – 8% American Eagle – 7% Ralph Lauren – 6% Hollister – 4% PacSun – 3% Victoria’s Secret – 2% Aeropostale – 2% Charlotte Russe – 2% Rue21 – 2% |
Shoes | Nike – 43% Vans – 10% Converse – 6% Sperry – 5% Steve Madden – 5% DSW – 4% Nordstrom – 2% Adidas – 2% UGG – 1% Payless – 1% | Nike – 46% Vans – 11% Converse – 5% Sperry – 4% Steve Madden – 3% Adidas – 2% Foot Locker – 2% UGG – 2% Payless – 1% TOMS – 1% |
Handbags (girls) | Michael Kors – 30% Coach – 18% Kate Spade – 10% Louis Vuitton – 4% Longchamp – 4% Vera Bradley – 4% Chanel – 3% Tory Burch – 3% Marc Jacobs – 3% Gucci – 2% | Michael Kors – 38% Coach – 20% Vera Bradley – 5% Louis Vuitton – 4% Gucci – 3% Kate Spade – 3% Fossil – 2% Chanel – 2% Tory Burch – 2% Steve Madden – 1% |
What’s notable is how dominant the leaders are in each category. In most cases, brand preference declines after the number one brand and plummets beyond the top-three. Another interesting point is how similar the brand preferences are across income groups. It would have been interesting to see how low-income teens reported their brand preferences, too.
In reviewing the Piper Jaffray report, there are three key takeaways around brand and shopping behavior:
- Teens are brand conscious and brand loyal – In most cases current category leaders have been the leaders for over a year.
- Teens have more money to spend – Their income is up – mostly thanks to their parents’ contributions – and they are planning to spend more this year than at any point in the recent past.
- Teens prefer to shop in store – Yes, teens shop online, but it isn’t their first choice and for teenage girls the preference to shop online is actually in decline.
With retail season heating up, understanding where, how much and on what teenagers are planning to spend is critical. Likewise, recognizing which brands are not top of mind for teens creates an urgency for marketers to find ways to make inroads before the dollars dry up.
