Nike remains the top brand among teens

Piper Sandler Sr. Research Analyst Erinn Murphy joins Yahoo Finance to discuss the biggest takeaways from the firm’s latest teen survey, including top brands and issues among Gen Z.

Video transcript

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BRIAN SOZZI: Teens are loving makeup, wearing shoes, Crocs and Nike, eating goldfish and Nature Valley bars, and surfing around on Amazon and Netflix a whole bunch. That is just a small sampling of the takeaways from Piper Sandler's latest Taking Stock with Teens survey. Piper Sandler's senior research analyst Erinn Murphy is here with more details. Erinn, always enjoy reading this report. 10,000 teens surveyed, so a large sampling size, as always, here. Anything surprise you here from the survey?

ERINN MURPHY: Yeah, well, thank you for having me on. There were a number of surprises this fall. I think what was important about this survey, though, is this is one of the first surveys that we've done for a couple of years that teens are going back to the classroom. So I think it does give some insights on what could a new normal look like.

So, 91% of teens were back in classroom in person, another 5% in a hybrid format. We did see a preference for specialty retail tick up. 30% of teen time is allocated to the mall or to specialty retail, which did surprise us. And we saw a lot more interest this fall in apparel and footwear and accessories. So we feel very strongly that we're in the midst of a multi-year replenishment cycle, as it relates to the wardrobe So I'd say those were some of the key takeaways on the positive side.

On the slightly negative side-- and again, maybe not too surprising because consumers are getting out and about again, but video game consumption ticked down. We also saw personal care preferences start to evolve more towards hair care, more towards fragrance, and away from cosmetics.

JULIE HYMAN: Erinn, I was surprised to see clothing is, once again, the top priority for teens, right? And you say in the survey, for the first time since fall of 2014, clothing, 22% of wallet share, is number one. In case folks were wondering what it used to be, it was food. Kids were going out and eating together. And it looks like they are spending more on clothing again. What are sort of the implications of that?

ERINN MURPHY: Sure, so I want to be clear. Food is still very relevant, but it did tick down for the first time in seven years below that of clothing. So I think as it relates to our coverage-- I cover the apparel footwear and some of the beauty stocks for Piper-- this is a very positive data point for apparel, broadly. And so, whether it's Nike taking new highs in our survey, whether it's Lululemon, again, we're in a casual cycle that hasn't come unwound just because we are moving through reopening. So we feel very firm about the casual apparel cycle that we're in.

I think the other really fun anecdote is we talked to teens about what trends they're seeing in school. And we're seeing mentions of a lot of throwbacks to the '90s, whether it's mom jeans, whether it's high waisted denim, looser, baggier, fitted bottoms with crop tops. So there's a lot to be excited about that's new in apparel. And I think the consumer and the teen consumer in particular is excited to show it off.

BRIAN SOZZI: Erinn, no way I'm going back and purchasing a few pair of JNCO jeans. I'm not reliving my '90s childhood and early 2000s. I cannot do it. I refuse to. What is also interesting to me is that the survey pointed out 75% of teens are in households that have been vaccinated. That is up from 30% in the spring. As you look to the holiday shopping season, this has to be an incredibly bullish point.

ERINN MURPHY: Yeah, we do feel bullish on the consumer demand into holiday this year. We think that there is appetite, as we talked about, for apparel, for footwear, for accessories, which also jumped up 10% year over year in terms of interest. The one caveat-- and I think this is important-- is inventory. Obviously, our survey speaks to consumer demand, not to what's happening in the supply chain. But inventory is very lean across the board, as several brands have had challenges getting their inventory to North America. So keep that in your kind of back of your mind. But from a demand perspective, we feel very good about what we're seeing this early on in the season.

JULIE HYMAN: You know, I want to pick up on the inventory question because, of course, Nike is the big winner again. Nike is really perennially at or near the top in your survey. And as we know, Nike's got those inventory problems, right? It's having trouble with its factories in Vietnam. At what point do these kids get annoyed and try and turn to another brand? Or does it just make Nike that much hotter for them?

ERINN MURPHY: It's a great question. I think the brand speaks for itself in our survey, hitting the top apparel brand, again, for 11 consecutive years, the number one footwear brand at 57% share. And even Converse, which Nike owns, picked up 300 basis points. So we think the scarcity historically has driven the model. Clearly, if you can't find any product, that's a problem. But there's a lot of secondhand platforms out there. StockX was the number three preferred website for male teens.

So there's a lot of interest in the brand that you may get not just from the primary market, but the secondary market, which I think is a positive. I'd say more importantly, obviously, post the last quarter, we do believe that they appropriately cut their guidance for the balance of the year and really kind of took a scorched Earth scenario to it. So from here, we do think this is a buying opportunity. We think the supply chain, while pressured right now, will be transient. And the fact that this brand, time and time again, hits the top of this Gen Z demographic is the more relevant point here.

BRIAN SOZZI: Erinn, I have 60 seconds left and two questions for you, so we have to be quick here. 9% of teens in the survey claim to have traded crypto. What do you make of that?

ERINN MURPHY: These teens are digital. They are figuring things out. I think of that 9%, close to 80% were male. So it will be interesting to see how this changes going forward. The other really interesting stat was on NFT. So there was a similar kind of high single digit interest of teen-- again, more teen male-- purchasing NFTs. So a whole new set of kind of asset classes are emerging for this young generation.

BRIAN SOZZI: And Erinn, lastly, this is blowing up on my Twitter feed. I tweeted it out there. Why the popularity in Goldfish?

ERINN MURPHY: My goodness, that's a great question for Michael Lavery, who covers it. But teens like to snack. I think they've been sitting at home for the last 18 months. And it is a top trend, but more on that later. We'll have to dig into if it's more of a TikTok trend. I would say that seems to be the golden wand that flashes across our survey and makes things move higher.

BRIAN SOZZI: Always awesome work here. For the record, I am not a Goldfish fan. Piper Sandler senior research analyst Erinn Murphy, good stuff as always.