Teens are spending their money on Amazon and Adidas, while Nike loses favor
Nike NKE, -0.78% was still the top clothing and footwear brand, though it was among the list of names that experienced the largest declines. That list also includes Ralph Lauren Corp. RL, -0.77% ; Steve Madden Ltd. SHOO, -0.73% ; Ugg, a Deckers Outdoor Corp. DECK, -3.39% company; Fossil Group Inc. FOSL, +1.24% and Michael Kors Holdings Ltd. KORS, +0.74% .
Piper Jaffray analysts call Nike’s decline the biggest surprise of the survey, while Adidas ADS, -0.18% “reached new highs.” Recent data from The NPD Group found that Adidas surpassed Nike’s Jordan brand to become the No. 2 sport footwear brand in the U.S. Nike’s eponymous brand held on to the top spot.
For this survey, Piper Jaffray polled 6,100 teens across 44 U.S. states. The average age of respondents was 16, and the average household income was $66,100.
“Overall, larger brands are ceding share for small brands,” Piper Jaffray analysts wrote in a note, highlighting the rise of brands like Vans, part of the VF Corp. VFC, -0.47% portfolio, and Supreme, the skateboard brand profiled in this year’s massive September issue of “Vogue.”
“Athletic apparel trends are moderating at Nike’s share losses are not fully offset by the rise of Adidas,” analysts added.
Other top names include Starbucks Corp. SBUX, +0.29% , which was No. 1 in restaurants for both upper-income teens with household incomes of $101,000, and average-income teens, with a household income of $55,000; Netflix Inc. NFLX, +0.68% , which was tops for daily video consumption; Snapchat for favorite social media platform; and Amazon.com Inc. AMZN, +0.68% for top shopping website.
Amazon captured 49% of the upper-income teen vote for top site, holding the No. 1 spot for the three previous surveys as well.
Perhaps sensing an opportunity to turn young shoppers into lifelong fans, Amazon announced Wednesday that teens ages 13 to 17 can now shop on Amazon using their own login, with parents receiving an email or text message showing the order details. Parents can approve all purchases or pre-set spending limits.
Teens whose parents are Prime members can also take advantage of select Prime benefits.
Christian Magoon, CEO of Amplify ETFs, calls this teen appeal an “overlooked growth engine,” with teens coming of age watching Prime video, seeing Amazon packages come to their homes and watching their parents quickly go online and make purchases.
“Younger generations rebel against things that are static,” Magoon said, adding that other retailers can also gain favor with this group by evolving.
“Amazon continues to innovate and grow,” he said. “We’re not at peak Amazon. People are still excited about what’s next.”
Piper Jaffray found that overall teen spending was down 4.4% year-over-year, and parent contribution is 67%, below the 68% long-term average.
The SPDR S&P Retail ETF XRT, -1.19% is down 8.3% for the year so far while the S&P 500 index SPX, -0.08% is up 14.1% and the Dow Jones Industrial Average is up 15.5% for the period.