Piper Jaffray Completes 25th Semi-Annual "Taking Stock with Teens" Market Research Project
April 10 2013 - 6:01PM
Business Wire
Piper Jaffray (NYSE: PJC) has completed its 25th semi-annual
"Taking Stock With Teens" market research project, which points to
a seasonal pause in discretionary spending contrasted by strong
intent to spend across multiple categories and household income
levels.
"Our spring 2013 survey results suggest teens have a heightened
sense of awareness surrounding seasonal spending fluctuations and
broader macroeconomic sensitivities,” said Steph Wissink,
co-director of research and senior research analyst at Piper
Jaffray. “Spending has moderated across discretionary categories
for both upper-income and average-income teens when compared to the
prior year and prior season. Yet nearly two-thirds of respondents
view the economy as consistent to improving, and just over half
signaled an intent to spend ‘more’ on key categories of interest,
particularly fashion and status brand merchandise."
Key findings from the survey in fashion, beauty and personal
care, restaurants, digital media, gaming, and wireless
communication include the following:
- The fashion category accounts for
roughly 40% of teen budgets, consistent with prior survey cycles.
Spending among upper-income teens was down modestly to the prior
year and season while average-income teens indicated a slight
increase. Implying the pause in spending may be temporary,
approximately 53% of upper-income teens plan to spend more on
fashion apparel in the coming periods. Parent contribution to teen
spending contracted by nearly 10 percentage points in our spring
survey, with 55-60% of teens indicating their parents contribute
more than half of their spending. Within the fashion category
specifically, insights into key trend changes include a basing in
action sports mindshare, declining demand for fast fashion,
emergence of a refined classic or preppy aesthetic, and preference
for fashion athletic wear.
- Teens are exhibiting changes in
shopping behaviors that will likely reshape the way brands target
this demographic including shopping less frequently and shopping
online instead of in specialty and department stores. Approximately
79% of females and 76% of males shop online, and respondents
indicated that roughly 18% of their spending is online. Nearly 70%
of teens indicate they prefer to shop the Web sites of their
favorite stores-based retailers. In addition, teens prefer labels
to logos and seek value in their purchases, owing to the rise of
spending in the outlet and off-price channels. Approximately 70% of
teen girls and 55% of teen boys shop at off-price stores and 55%
and 42%, respectively, indicated it is popular to do so. The shift
toward digital is proliferating softlines, hardlines and media
purchases. Streaming accounts for 46% of movie rentals and online
music provider Pandora accounts for 22% of preferred music
sources.
- Teens have cited "friends" as the
strongest influence over their purchase decisions for the duration
of our survey history, but "Internet" is quickly rising in profile.
Approximately 53% of females and 52% of males indicate that social
media impacts their purchases with Facebook being the most
important, followed closely by Twitter and Instagram. But the
popularity of Facebook is waning among teens with 33% citing it as
the most important, down from 42% six months ago.
- Beauty spending among upper-income
teens declined 3% year-over-year and increased 2% sequentially. For
average-income teens, beauty spending increased 1% year-over-year
and 4% sequentially. For the second consecutive survey,
average-income beauty spend is now at parity with upper-income
spending. MAC was cited as the No. 1 cosmetics brand for
upper-income teens for the fifth survey in a row and Cover Girl
ranks at the top of the list for average-income teens. Teens
continue to demand greater diversity of cosmetics offerings, likely
spurred by several emerging cosmetics brands coming to market with
new and superior innovations.
- Teens are increasingly choosing organic
food options, with 42% eating organics versus just 33% two years
ago. This trend is likely to support ongoing demand for natural and
organic grocery, as teens age into young adults and establish
independent households. When eating out, 57% of teens prefer
limited service restaurants, up steadily from 43% four years ago.
When identifying their preferred dining segment, 41% select quick
service, 36% casual dining and 15% fast casual options. In addition
to classifying by segment, preferred restaurant brands also provide
insight into various cuisine profiles—for American Cuisine, teens
favor Cheesecake Factory; for Italian, teens favor Olive Garden;
and for Mexican-inspired fare, teens favor Chipotle Mexican
Grill.
- Mobility and connectedness are driving
nearly 91% of teens to purchase a smartphone for their next
wireless device, with approximately 60% biased toward Apple and 21%
likely to buy an Android device, consistent with our prior survey
cycle. Survey results point to teens prioritizing unlimited data
plans as the most important service plan feature when choosing a
carrier, with Verizon and AT&T identified as having the "best"
networks. Approximately 48% of teens own an iPhone, up from 40% six
months ago. Tablet ownership also continues to grow, with 51% of
teens owning a tablet computer, up from 44% in fall 2012, with 68%
of teens identifying Apple's iPad as their owned device.
- Teens represent more than one-third of
video game players and gaming accounts for 6% of teen spending.
Interest in traditional gaming consoles remains strong entering a
new console cycle. Awareness of next generation consoles was 73%
among teens that play video games at least monthly. Approximately
52% of teens intend to purchase a next generation console. Buying
and selling used video games remains a critical component of the
gaming industry, with 63% of gamers buying used games and 29% of
teens trading in old games to fund new software and hardware
purchases.
The "Taking Stock With Teens" survey is a semi-annual research
project comprised of gathering input from approximately 5,200 teens
with an average age of 16.3 years. Teen spending patterns, fashion
trends, and brand and media preferences were assessed through
visits to a geographically diverse subset of high schools in 10
U.S. states and through a national online survey of a wider group
of teens from 37 different states. The survey is conducted in
partnership with DECA, an international association of high school
students. The spring survey was completed March 1–April 3,
2013.
About Piper Jaffray
Piper Jaffray is a leading investment bank and asset management
firm serving clients in the U.S. and internationally. Our proven
advisory teams combine deep industry, product and sector expertise
with ready access to capital. Founded in 1895, the firm is
headquartered in Minneapolis and has offices across the United
States and in London and Zurich. www.piperjaffray.com
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