Wednesday, October 27, 2010

Teen Trends

They either have their own cash or they control and influence:

New Survey Examines Teens' Preferences as Consumers

In Addition to Fashion, Piper Jaffray Study Also Identifies Dining, Electronics and Personal Care Choices

Piper Jaffray recently published its semi-annual, proprietary "Taking Stock With Teens" survey, results of which indicate a clear bias toward value brands and lower overall prices paid for fashion products at all levels of household income.

"For upper-income households fashion budgets continue to decline but sentiment is improving," said Jeff Klinefelter, senior research analyst at Piper Jaffray. "For average-income households, teen fashion budgets remain relatively stable. In aggregate, we continue to believe teens will spend for differentiated merchandise, but significant discounting and an unstable employment environment remain key themes in teen budgeting decisions."

Key findings from the survey in fashion, beauty and personal care, restaurants, digital media and video game categories include the following:

  • Results for upper-income teen respondents reflect sequential stabilization with fashion budgets remaining flat compared to the Spring 2010 survey, but down 14 percent year-over-year. Fashion budgets for average-income teens were flat compared to spring 2010 results, and were up 0.6 percent year-over-year. Sentiment indicators for both upper- and average-income respondents point toward spending stabilization on fashion categories versus increases or decreases in any one area.
  • Upper-income teens' top preferred brands continue to be in the Action Sports Brands category, which showed a 13 percent share. Within this category, Nike and American Eagle both picked up share. For average-income teens, Hollister showed a big improvement in mindshare and American Eagle showed a slight improvement. Aeropostale entered the top five preferred brands for average-income teens for the first time since fall of 2008. Nike was also a standout for apparel among both upper- and average-income respondents, suggesting the company's marketing campaigns, sponsorships of elite athletes, technical product innovation, and fashion, are gaining ground with teens. The Action Sports Brands category also includes Pacific Sunwear, Zumiez, Volcom, Quiksilver, Hurley, Vans and Tilly's.
  • Beauty spending trends were mixed. Upper-income teens showed a continuation of a negative spending trend on both a sequential and year-over-year basis. Conversely, average-income teens showed a healthy year-over-year increase in beauty spending, which may signal a positive inflection point.
  • In the restaurant category, while specific rankings differed by income bracket, preferred brands among teens included strong showings from perennial favorites McDonald's, Starbucks and Chipotle, as well as Olive Garden. Notably, both Chipotle and McDonald's eclipsed Starbucks as the most preferred brand among upper- and average-income teens, respectively. This move may be attributable to each company's respective blend of premium food attributes and value-centric positioning.
  • In digital media, 33 percent of students surveyed expect to buy an iPhone in the next six months, up from 22 percent one year ago; 21 percent indicated they currently use DVD-by-mail with 29 percent indicating they will use DVD-by-mail in two years. 27 percent of teens said they download movies, surpassing DVD-by-mail for the first time ever, and 39 percent expect to download movies in two years. DVD rental from retail stores is decreasing significantly in popularity, with 59 percent using stores today and 45 percent expecting to use stores in two years.
  • Interest in traditional video gaming remains challenged among teens, and interest in digital game content points to slow adoption trends. In particular, 81 percent of teens indicated that they plan to spend less time playing games in 2011 -- the highest percentage ever recorded in the Surveys, and 83 percent of teens plan to spend less money to play video games during 2011 -- also the highest percentage ever recorded.
The "Taking Stock With Teens" survey is a research project comprised of gathering input from approximately 6,000 students with an average age of 16.3 years. Teen spending patterns, fashion trends, and brand and media preferences were assessed through a combination of geographically diverse high school visits with teens in seven states and as well as a wider group of teens from 31 states through an online survey in partnership with DECA (an international association of high school students).

(Source: Business Wire, 10/06/10)

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