Teens spend on Nike and Lululemon despite concerns about U.S. economy

Athletic apparel sits on display inside a Lululemon Athletica store.

Xaume Olleros | Bloomberg | Getty Images

Teens are spending more and shifting their shopping habits, even as they worry about growing economic uncertainty, according to a new survey.

Athletic apparel brands such as Lululemon and Nike that combine comfort and fashion are winning out over traditional clothing labels, Piper Sandler’s biannual “Taking Stock With Teens” report released on Wednesday revealed.

Many teens say they’re either unsure of or uninterested in the so-called metaverse — the idea of buying goods through a virtual reality experience. Retailers including Nike, PacSun, Forever 21 and Ralph Lauren have all been dipping their toes in the budding technology.

A growing number of teenagers also say they’re much more familiar with NFTs, or non-fungible tokens, than they were last fall, while only a small percentage have actually purchased one.

But they’re also increasingly concerned about the Russian war in Ukraine, the survey revealed, and are less preoccupied with the Covid-19 pandemic.

The results of the biannual survey have implications for the businesses vying to win over this generation’s dollars. That’s particularly true now with the economic environment riddled with uncertainty.

Teens plan to spend about $2,367 this year on everything from fast food meals and video games to handbags and sneakers, Piper Sandler found, or an estimated overall total of roughly $66 billion. That’s up 9% from reported spending levels in the spring 2021 report, and up 4% from Piper Sandler’s fall survey. Reported annual spending by teens peaked at about $3,023, in the spring of 2006. 

Piper Sandler surveyed 7,100 teens from Feb. 16 to March 22. The average age of those surveyed was 16.2 and the average household income was $69,298. Thirty-nine percent of the teens surveyed were employed part-time, up from 38% last fall and 33% last spring.

Concerns about the economy on the rise

Nike, Amazon keep top spots

Meanwhile, Nike remained the No. 1 favored clothing brand among teens, a spot it has held for an impressive 11 consecutive years. It also widened its margin as the preferred footwear brand among Gen Z shoppers, the survey said, ahead of Converse, Adidas, Vans, New Balance and Crocs, in that order.

American Eagle kept its spot as teens’ second-favorite apparel brand, followed by Lululemon, which moved up one position on the list from the prior year. Fast-fashion retailer H&M rose to fourth from ninth a year earlier. Adidas remained in fifth place.

Overall, the athletic brands mentioned in the survey released Wednesday accounted for 44% of teens’ favorite clothing labels, the highest levels that Piper Sandler has seen for the category. That aligns with a broader shift among consumers during the pandemic, toward stretchy and more loose-fitting clothing to be worn around the house. And many teens are still incorporating athletic brands into their wardrobes even as they head back to schools and offices.

Shein, a Chinese e-commerce fashion behemoth that is reportedly weighing a funding round at a valuation of about $100 billion, ranked seventh for teens’ favorite place to buy clothes, down from sixth in the fall of 2021 but up from eighth last spring.

Females continue to widely outspend males on clothing, according to the Piper Sandler survey, while males spend, on average, about $51 more that females on shoes each year.

Amazon remained by far the favorite website to shop overall, taking a 53% share, up from 52% last fall. Shein remained in second place, but its share of teens’ preference fell to 8% from 9%. Other retailers on the list were Nike, PacSun, Lululemon and Princess Polly, in that order.

When it comes to the metaverse and platforms such as Roblox or Decentraland, 26% of teens reported they own some sort of virtual reality device, with just 5% using it daily. Forty-eight percent said they are either unsure of or not interested in the metaverse.

Source: https://www.cnbc.com/2022/04/06/teens-spend-on-nike-and-lululemon-despite-concerns-about-us-economy.html