“Bifurcated Recovery” Detailed in 22nd Semi-Annual Piper Jaffray “Taking Stock With Teens” Survey
October 06 2011 - 10:00AM
Business Wire
Piper Jaffray (NYSE: PJC) has completed its 22nd semi-annual
“Taking Stock With Teens” survey, which indicates improving
spending at the upper-income level and continued weakness for
average-income teens. Also, the survey results reflect a preference
by teens for value-priced merchandise at all levels of household
income, but not necessarily the lowest cost, as teens report a
willingness to spend on higher-priced, differentiated
merchandise.
“Our Fall 2011 survey provides further evidence of a bifurcated
recovery: upper-income teens are feeling more confident and willing
to spend on fashion, while average-income teens continue to
rationalize budgets,” said Jeff Klinefelter, director of research
and senior research analyst at Piper Jaffray. “With macroeconomic
uncertainty likely to continue to weigh on consumer spending, we
believe fashion and overall product ‘newness’ can drive sales
growth for select retailers and brands.”
Key findings from the survey in fashion, beauty and personal
care, restaurants, digital media and video game categories include
the following:
- Fashion spending reflects improving
trends at the upper-income level and continuing weakness for
average-income teens. Among upper-income teens, the fashion
category accounted for 38 percent of budgets, up from 37 percent in
the spring of 2011. Of upper-income females, 40 percent plan to
spend more on apparel this year than last year, down modestly from
41 percent in the spring of 2011. Thirty-one percent of
upper-income males plan to spend more on apparel compared to 33
percent in the spring. Of average-income teens, 34 percent expect
to spend more compared to 35 percent in the prior two teen surveys.
Fashion “newness” and the potential emergence of a new fashion
cycle point to continued spending on fashion. Upper-income teens
continue to be drawn further online for spending, with 13 percent
of purchases coming from this channel, which is two percentage
points higher than for average-income teens. Friends remain the
dominate influence on both upper-income and average-income teen
groups, but the Internet displaced television as the No. 2
influence.
- Beauty spending among upper-income
teens increased six percent year-over-year, but down two percent
sequentially from the spring of 2011. Skin care and cosmetics
represented a bigger share of overall beauty spending. MAC is the
No. 1 cosmetics brand for upper-income teens, but the brand fell to
No. 3 among average-income teens (compared to No. 2 in the spring
and the same as the fall of 2010). Victoria’s Secret remains the
preferred fragrance, consistent with the past seven surveys. The
combined share of the top ten cosmetics brands continues to
decline, favoring multi-brand specialty retailers such as Ulta and
Sephora.
- Teen spending on food and restaurants
is reported to be near the highest level since early-2000.
Upper-income survey respondents increased weekly restaurant
spending by approximately two percent compared to the spring of
this year. Average-income teens decreased weekly spending by
approximately two percent— although declines appear to be slowing.
For selecting food and restaurants, taste continues to be the
strongest influence among teens and nutrition ranked lowest. Value
is less of an influence among upper-income teens but remains a more
important consideration among average-income teens.
- Portable device spending continues to
accelerate with 83 percent of teens reporting that they are likely
to purchase a smartphone for their next device, up from 75 percent
last fall and 81 percent in the spring. iOS gained market share on
Android and it is the most desired operating system, with 36
percent of teens reporting that they are likely to buy an iOS
device. Thirty-eight percent of teens plan on buying an iPhone in
the next six months, up from 33 percent one year ago. In the last
year, iPhone market share among teens has risen from 14 percent to
23 percent. Twenty nine percent of respondents own a tablet or have
one in their household, and 22 percent expect to buy an iPad in
next six months, which should benefit Apple given iPad’s dominant
market position.
- Teens represent approximately 35
percent of video game players, with games representing six percent
of teen spending. Teens tend to play games online, on mobile
phones, and on Facebook. Twenty-one percent paid to play games
online, reporting an annual spend of $75. Buying intentions remain
low for the purchase of new game systems and software during this
fall. Despite declining interest in consoles and handhelds, teens
remain receptive to new game experiences.
The “Taking Stock With Teens” survey is a research project
comprised of gathering input from approximately 5,700 students with
an average age of 16.2 years. Teen spending patterns, fashion
trends, and brand and media preferences were assessed through
visits to geographically diverse high schools in 11 states, and
through an online survey of a wider group of teens from 32 states.
The survey is conducted in partnership with DECA (an international
association of high school students).
About Piper JaffrayPiper Jaffray is a leading
middle-market investment bank and asset management firm serving
clients in the U.S. and internationally. Proven advisory teams
combine deep product and sector expertise with ready access to
global capital. Founded in 1895, the firm is headquartered in
Minneapolis and has offices across the United States and in Hong
Kong, London and Zurich. www.piperjaffray.com
Piper Jaffray & Co. does and seeks to do business with
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should be aware that the firm may have a conflict of interest that
could affect the objectivity of this report. Investors should
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with important disclosure information, including an attestation
under Regulation Analyst Certification, found at the following
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