In its semi-annual "Taking Stock With Teens" survey, Piper Jaffray analysts found that young people in the U.S. are starting to favor smaller brands over large conglomerates, with historical stronghold Nike Inc. (NKE - Get Report) notably falling from grace in the minds of teens.
Nike's demise came as Adidas AG (ADDYY) "doubled its mindshare" to 4% from 2%. Athletic apparel trends are still moderating, though, as Adidas' rise didn't fully offset Nike's losses. But analysts said Nike's decline in mindshare to 23% from 29% was "what surprised [them] most" in this fall's survey.
Overall teen spending declined 4%, but fashion as a percent of the teens' budgets was steady from last year at 38% of total spending. Streetwear, including small brands such as Supreme and Vans, has emerged with "notable strength," analysts said.
Missing from the top 10 preferred apparel choices this year was L Brands Inc.'s (LB - Get Report) Victoria's Secret, which previously retained 2% of mindshare among upper-income teens. Nordstrom Inc. (JWN - Get Report) was absent from the top 10 for the second year in a row.
Other notable decliners include Fossil Group Inc. (FOSL - Get Report) , Pandora Media Inc. (P) , Ralph Lauren Corp. (RL - Get Report) , Steve Madden Ltd. (SHOO - Get Report) , Tory Burch, Deckers Outdoor Corp.-owned (DECK) UGG and Under Armour Inc. (UA - Get Report) .
Nearly 50% of teens said Amazon.com Inc. (AMZN - Get Report) is their favorite website, proof the shift to e-commerce shopping strengthened this year. Teens estimated they spend about 17% of their time online when shopping, up from 15% a year ago.
Accessories spending was the most muted the survey has found in its 17 years. That could be bad news for brands such as Michael Kors Holdings Ltd. (KORS) , LVMH SE (LVMUY) and Coach Inc. (COH) , as 75% of female respondents said they don't plan to buy a handbag in the next six months.
Tommy Hilfiger says winning back customers is all about finding the right product.
Food and restaurant spending dipped to 22% of spending from its peak of 24% last spring, but remains a "focal point of teen spending," Piper Jaffray wrote. Starbucks Corp. (SBUX - Get Report) was the only brand to retain a double-digit percentage share of the market.
As for the phones teens are glued to, 82% of respondents said the next one they buy will be an Apple Inc. (AAPL - Get Report) product. Their favorite apps were Snapchat from Snap Inc. (SNAP - Get Report) and Instagram from Facebook Inc. (FB - Get Report) .
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