Monday, April 22, 2013
According to a new Piper Jaffray study, “Taking Stock With Teens,” the fashion category accounted for 39% of teen discretionary budgets, up from 38% in the fall of 2011 and 37% a year ago. Upper-income teens indicated that spending on fashion increased 17% on a sequential basis and 21% year-over-year.
Jeff Klinefelter, director of research and senior research analyst at Piper Jaffray, observes that "... we are in the early stages of a clearly defined discretionary spending cycle... Double-digit increases in spending... both upper- and average-income teens and similar strength in spending intentions, signal... a willingness to spend more broadly on key categories of interest.”
Average-income teens indicated their spending on fashion increased 18% on a sequential basis and 15% year-over-year. While strength in spending was broad-based across categories, spending by male teens in fashion was the highest, a trend which has historically been indicative of a multi-year, dual-gender fashion spending recovery.
Beauty spending by upper-income teens increased 8% sequentially and 6% year-over-year. For average-income teens, beauty spending increased 21% sequentially and 18% year-over-year. Skin care and cosmetics represented a larger share of overall beauty spending.
Young and emerging cosmetics brands, many of which are coming to the market with new or superior innovations, are gaining traction with teen consumers. MAC remained the No. 1 cosmetics brand for upper-income teens while Cover Girl was once again the No. 1 brand for average-income teens. Victoria's Secret remains the preferred fragrance for teens across both income segments.
Upper-income and average-income respondents increased their weekly restaurant spending by approximately 10% and 3% respectively, compared to last year. Taste remained the strongest influence on food and restaurant dining decisions. Value also continued to be an important influence on dining decisions and has gained in importance over time, ranking number two in the current survey compared to number five in the spring of 2007.
Teen spending on portable devices continues to accelerate with 86% of teens reporting that they are likely to purchase a smartphone for their next device, up from 83% last fall and 81% one year ago. Apple’s iOS gained market share as the most desired operating system, with 51% of teens reporting that they are likely to buy an iOS device (compared to 22% for Android).
Approximately 34% of teen respondents owned an iPhone, up from 17% last spring. And 40% of teens expect to purchase an iPhone in the next six months, up from 37% last year. In the tablet market, 34% of teens owned a tablet computer, up from 22% last spring. Of those teen tablet owners:
- 70% owned an iPad
- 19% owned an Android-based tablet
- 11% owned a Kindle Fire
- 19% of teens expected to purchase a tablet in the next six months
- 80% of those teens intending to purchase an iPad
“Taking Stock With Teens” is a research project with input from approximately 5,600 teens with an average age of 16.3 years. Teen spending patterns, fashion trends, and brand and media preferences were assessed through visits to geographically diverse high schools in 11 states, and an online survey of a wider group of teens from 34 states. The survey is conducted in partnership with DECA.
