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PiperSandler Teen Share of Wallet by Income Demographic Nov2020Teen spending since the pandemic is at the lowest level recorded since Spring 2005, according to the latest figures from Piper Sandler. The report [download page] takes a look at changes in teen spending habits as well as the top channels and markets among this demographic.

Most noticeably, the report labels teen spending in Fall 2020, i.e post-pandemic, as “trough spend”. The $2,150 self-reported annual spend per individual teen in these latest figures is the lowest recorded since Spring 2005, and is significantly lower than the “peak spend” recorded in Fall 2006 ($3,023).

Amid this overall decrease, the overall breakdown of spending by upper-income teens (average household income of $105,800) in major categories has largely remained stable between Spring 2020 and Fall 2020. Food spending is an exception, as it decreased from 25% share of wallet to 21%, while video games spend increased from 8% to 10% share.

For both upper-income and average-income teens (average household income of $55,400), food and clothing remain the top two spending categories by some margin, though upper-income teens are spending slightly more on both (food: 21% vs. 19%; clothing: 21% vs. 20%). However, moving through teens’ share of wallet, average-income teens are spending slightly more than upper-income teens on other categories such as video games (11% vs. 10%) and cars (8% vs. 7%).

Broken down by gender, the report highlights a key difference in spending in fashion categories (clothing, access and footwear) in Fall 2020, with 29% share of male respondents’ wallets being spent on fashion compared to 51% share among female respondents. While clothing alone was #1 in females’ wallet share in latest figures (27%), this spot in males’ wallet share was taken by food (21%).

Teen Shopping

When teens are spending on shopping for clothing, they do so through a variety of channels. Among upper-income teens, the most popular shopping channels include specialty (20%), outlet (14%), discount (13%) and major chain/dept stores (12%), though the largest share (22%) report turning to online-only retailers (22%).

Indeed, the study charts the continuing increase in time spent shopping online among upper-income teens since Fall 2013, when online-only retailers made up around a 10% share of the shopping channel mix. However, in line with reduced overall spend since the pandemic, time spent online shopping is down after hitting a peak in early 2019.

Amazon is upper-income teens’ favorite website for shopping. Some 54% of teens cited the platform as their favorite, with far fewer respondents picking sites like SHEIN (5%), Nike (5%) and PacSun (3%) as their favorite.

Thrifting and Renting Grow in Popularity

Notably, the secondhand market appears to be growing among US teens, following an overall trend in the US towards second-hand and up-cycled products. Since the pandemic (Spring 2020 vs. Fall 2020), the share of both male and female upper-income respondents who have tried a secondhand e-commerce platform has grown (male: 13% to 18%; female: 37% to 40%), while thrift/consignment stores’ ranking as a favorite brand or retailer has moved from #44 in Fall 2019 to #13 in Fall 2020.

Not only that, but the latest figures also show some appetite for a rent-and-return market among upper-income teens, with 26% of males and 37% of females claiming that they would pay a monthly fee for a service of this kind.

Video and Mobile Games

One spending category that appears to have been spared the effects of the pandemic is video gaming, on which teen spend is up since Spring 2020. However, the share of teens playing games on their mobile phone or tablet decreased slightly since Spring 2020 from 72% to 66%, despite teens’ use of social and video apps surging during the pandemic.

Request the full report here.

About the Data: Findings are based on an August and September 2020 survey of 9,800 US teens with an average age of 15.8.

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