Though fashion still accounts for 41% of the total teen budget, total teen spending in the category declined nearly 20% year over year, pointing to a “discretionary recession,” according to the 15th semi-annual “Taking Stock With Teens” study by Piper Jaffray.
“We’re currently in the ‘transition phase’ of the fashion cycle and believe that we have not yet hit bottom,” said Jeff Klinefelter, Piper Jaffray senior retail research analyst.
Compared with last year’s study, young men spent 15% less on discretionary items (fashion, beauty and personal care, home furnishing, video game, digital media and restaurant categories); young women spent 11% less.
Key findings from the survey:
- The top five brands, ranked by mindshare, among all students in the school survey:
- Hollister – also “most preferred” among girls only
- West Coast Brands (Pacific Sunwear, Volcom, Quicksilver, Zumiez) – the favorite among boys only
- American Eagle
- Abercrombie & Fitch
- Forever 21
- In home furnishings, IKEA was the top choice among teens, followed by Pottery Barn/PB Teen.
- Electronics spend increased 7% overall (up from 6% last year) representing 10% of total budget for young men and 4% for young women.
- Teenage boys are spending more than last year in the videogame system category (13% vs. 9% last fall); teen girls are spending more in the beauty category.
- In digital music…
- 86% of the students who own an MP3 player indicated that they also own some form of an iPod – an increase of four percentage points from last spring.
- iTunes dominates market share (81%) – but 61% of students surveyed said they download music illegally, compared to 64% last year.
- 6% said they own an Apple iPhone (double the market share in fall ’07); 9% expect to buy an iPhone in the next six months.
- In food and beverage…
- Starbucks remained the clear brand leader in both the school and online survey, and Dunkin’ Donuts appeared in the top 10 brands for the first time in the school survey, indicating that premium coffee is potentially a growing category among teens.
- Chipotle (ranking in the top 10 for the first time) and McDonald’s remained in second and third places in the school survey; Olive Garden and Applebee’s remained in second and third in the online survey.
- About 45% of students say they have spent more money at restaurants this year.
- Parents are spending less money on apparel for both their teens ($883 vs. $1,487 annually – a 41% decline from last spring) and themselves ($952 vs. $1,249 – 24% less than last spring), said Piper Jaffray based on a poll of more than 75 parents.
About the study: Senior research analyst Jeff Klinefelter and a collaborative team surveyed nearly 700 students using online, in-class, and in-store surveys across 11 US cities. They also used an additional 4,500 online survey responses from a partnership with the national DECA organization.