E.l.f., Nike, Chick-fil-A Maintain Top Spots Among Teens' Favorite Brands
In the ever-evolving landscape of marketing to young consumers, understanding their preferences and spending habits is paramount. Piper Sandler's 46th semi-annual "Taking Stock With Teens" report sheds light on the favorite brands of Generation Z, along with intriguing insights into their spending patterns, demonstrating the power of remaining relevant to this influential demographic.
A Consistent Brand Landscape: Despite economic challenges, the top brands for cosmetics, apparel, footwear, and restaurants among teens have remained remarkably consistent. E.l.f. Beauty continues to reign supreme as the top cosmetics brand, making an impressive 13-point jump year-over-year, capturing 29% of the market among female consumers. Nike retains its top position in both the apparel and footwear categories, while Chick-fil-A continues to be the restaurant of choice for this age group.
Insights into Changing Spending Habits: The report also highlights the evolving spending habits of teens, providing valuable insights for marketers. While the overall teen self-reported spending decreased by 1% year-over-year to $2,316, it's crucial to note that this is the first time a decrease has been observed since before the pandemic. Interestingly, male teens have increased their spending by 11% year-over-year, while female teens have shown an 8% spending decrease.
The Digital and Mobile Landscape: Understanding where teens spend their time, both digitally and on mobile, is essential for modern marketers. The report reveals that TikTok remains the favorite social platform, capturing 38% of teen interest, followed by Snap (28%) and Instagram (23%). YouTube's popularity has grown by 100 basis points since spring 2023, while Netflix experienced a decline of 220 basis points in daily video consumption. Spotify, on the other hand, has made small gains in usage and subscription rates, indicating the dynamic nature of these platforms.
Preferences for Online Retail: Gen Z consumers have displayed an increasing preference for off-price and online-only retailers, indicating a shift in shopping behaviors. Over the past year, off-price and online-only retailers have gained popularity, growing by 545 basis points and 121 basis points year-over-year, respectively. On the flip side, discount retailers have seen a decrease of 440 basis points. Amazon emerges as the clear favorite e-commerce site, securing 55% of respondents' preference, followed by Shein, Nike, Goat, and Temu.
The "Core Beauty Wallet": The report also highlights the "core beauty wallet" concept, which includes cosmetics, skincare, and fragrance. Despite the overall spending decrease among female consumers, the "core beauty wallet" has seen a remarkable 23% year-over-year increase, amounting to $324. Cosmetics account for the highest percentage of beauty spending at $127, marking the highest level since 2019. In the beauty shopping destination race, Sephora has overtaken Ulta, capturing the preference of the majority. Sephora's loyalty membership stands at 67%, higher than Ulta's at 60%.
Spurring a Spending Slowdown: Economic concerns appear to be impacting teen spending habits, with inflation emerging as a significant issue among young consumers. According to Edward Yruma, senior research analyst at Piper Sandler, the survey points to initial signs of a slowdown in teen spending. Inflation has become a top-of-mind concern, second only to environmental issues in the eyes of teens.
As marketers, understanding these trends is vital for staying relevant to this influential demographic. By maintaining consistency and adapting to changing spending habits, brands can continue to resonate with Generation Z and nurture lasting relationships with these young consumers.