Retail

What Are Teenagers Buying?

A lot of different things, according to some new research data, although overall teenage spending does appear to be down from the previous year.

Teenagers are spending money on fashion, beauty and personal care products, digital media, food, video games and entertainment, according to a study by Piper Jaffray.

Piper Jaffray has conducted a study of teenage shopping habits every spring since 2001, so it's surveyed more than 130,000 teens and collected more than 35 million data points about teenage spending habits over the past 15 years. This year’s study surveyed 6,500 U.S. teens across 46 U.S. states with an average age of 16.5 (broken down to 56 percent male, 44 percent female).

“While total spending among the teen demographic appears to be down versus last year, we are encouraged that overall teen employment appears to be on the rise; 39 percent of teens indicate they hold a part-time job, which is up 400 basis points over last year’s levels,” according to Neely Tamminga, a senior analyst at Piper Jaffray that worked on the study. “As they take more control over their discretionary spending, we believe it is critically important to watch for category shifts and brand preferences.”

Although overall teen spending is down compared to 2015, upper-income teens spent 38 percent of their “wallet” on fashion categories, such as clothing, accessories, footwear, etc. That’s a 2 percent uptick from a year ago, according to the study.

When it comes to female teens, fashionable athletic apparel is hot, amounting to 17 percent of spending total, while Nike is the most popular brand at 21 percent, followed by American Eagle (8 percent), Forever 21 (7 percent), Ralph Lauren (6 percent) and Hollister (4 percent).

Among upper-income teenage females, beauty products amounted to 10 percent of overall spending, which is the highest percent the survey has seen in 10 years, according to Piper Jaffray.

And sales of denim jeans also rose to 14 percent of total spending among upper-income females, the first time it’s showed up as a top trend in spending since 2013.

Restaurant spending made up 22 percent of total overall spending for upper-income teens (defined as those having an average household income of $62,500 or more), but when teens do dine out, they are opting to go with limited-service restaurants, like Starbucks or Chipotle, rather than the full-service dining experience (and heftier price tag).

The average check for a teenage meal was $4–$17, and when teens do dine out, they are choosing Starbucks the most (14 percent), followed by Chipotle (9 percent), Chick-fil-A (7 percent) and then Panera or McDonald’s (tied at 4 percent).

Amazon Prime membership has also grown among teens (although probably paid for by their parents) in each of the past five surveys, and Piper Jaffray now estimates that 51 percent of teens surveyed are now a member (or their parents are).

When it came to teenage males, they are spending the most on food (20 percent), clothing (15 percent) and then video games (13 percent). The average teenage male is expected to spend $214 on video games in 2016.

When it comes to shopping websites, Amazon dominates teen spending habits with 41 percent of all online teenage sales occurring there, while Nike and Forever 21 tied for second at 5 percent apiece and eBay, American Eagle and Victoria’s Secret all tied for third at 3 percent each.

Teens are also watching much more Netflix and YouTube than traditional TV channels and shows. Teens spent 65 percent of their time watching Netflix and YouTube, compared to just 26 percent of their time watching “traditional TV.” Although Netflix is clearly dominating teen view habits at 38 percent.

And the most anticipated movie among teens this year was Pixar’s "Finding Dory" (the sequel to "Finding Nemo"), followed by Marvel’s "Captain America: Civil War" and Warner Bros.’s "Batman v Superman: Dawn of Justice."

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