Gen Zs (born between 1995 and 2000) contribute approximately $830bn to US retail sales annually and represent a massively influential consumer group.
Investment bank Piper Jaffray’s semi-annual ‘Taking Stock With Teens’ survey – which monitors the age group’s spending habits and brand loyalties – found the demographic has lowered its self-reported annual spend by 4% compared to the year prior – to $2,400 – the lowest level in eight years.
A big reason for this could be that more than a third of the 9,500 American teens polled across 42 states believe the country’s economy is getting worse.
Today’s Gen Zs – also dubbed the iGeneration or digital natives – care deeply about social and political issues like global warming, immigration and gun control.
Most also feel impassioned about doing their part for the environment, with nearly half claiming to be changing their habits to use less plastic, recycle more and ditch plastic straws.
Food, glorious food
According to Piper Jaffray, food ‘continues to be the No. 1 priority for teens in terms of wallet share,’ with 23% saying the majority of their money is spent on eating out or eating on-the-go.
In fact, in its fall survey, restaurants (23% of spend among upper-income teens) again outpaced clothing (21%) as the biggest spending category among the age group.
The top choice – for the fourth consecutive time – is Chic-fil-A, followed by Starbucks and MacDonald’s. Dunkin’ also makes it to the top five among both upper-income and average-income teens.
The snackification concept fits perfectly into Gen Zs fast paced, to-go lifestyle. When they aren’t spending their cash in restaurants, they are raiding the chip aisle.
According to the NPD Group, Gen Z’s are opportunistic eaters who would rather make a meal of appetizers or snacks than a sit down to a full meal three times a day.
Piper Jaffray’s survey saw teens voting in Lay’s potato chips, Campbell Soup's Goldfish crackers, Kellogg's Cheez-Its, and PepsiCo's Doritos and Cheetos as their top five favorites.
“Our Fall Teen Survey continues to validate several characteristics of this digitally-native demographic: 83% of teens have an iPhone, 52% of teens claim Amazon as their favorite online shopping website, and we saw an acceleration of VSCO and TikTok mentions,” said Erinn Murphy, senior research analyst at Piper Jaffray.
“Importantly, however, we saw the lowest teen spending levels in eight years. The two most challenged categories were handbags and cosmetics as females reprioritize their spending with eating out and footwear/apparel.”
- Female teens’ spending on handbags has hit a new low of $90 a year, less than half of the record $197 reported in the spring 2006 survey.
- Cosmetics spending also declined more than 20%, to $106, from a year earlier.
- Athletic labels dominate teens’ top fashion preferences, with Nike regaining share as the No. 1 apparel and footwear brand.
- Preppy brands – including Ralph Lauren, Sperry and Vineyard Vines – continue to lose market share.
- Accessible luxury handbags from Michael Kors, Kate Spade and Coach are also losing favour.
- Conversely, European luxury brands like Louis Vuitton and Gucci picked up, thanks partly to online resale platforms including The RealReal and StockX that give teens ‘access to luxury for less.’
- 52% of teens voted Amazon as their favorite e-commerce site, growing to 52% versus 50% in the spring.
- Amazon’s major brick-and-mortar rivals Walmart and Target didn’t make the top 10.
- Teens spend 37% of their daily video consumption on YouTube, ahead of Netflix at 35%. Video games command 9% of total teen wallets versus 8% last year.
- Instagram remains the most frequented social media platform among teens for the third consecutive survey.