No site comes close to Amazon for Gen Z
The 35th semi-annual “Taking Stock with Teens” survey from Piper Jaffray Companies shows that teenage members of Generation Z have increased their purchasing in the past year, and a slightly higher percentage of the time they spend shopping is taking place online.
Teens have increased their spending by six percent from the fall and by two percent overall from last year. Erinn Murphy, senior research analyst for global lifestyle brands at Piper Jaffray, said the increase in teen spending “mirrors the economic expansion we are experiencing broadly.” The average amount of time teens spent doing online shopping grew to 19 percent of their total shopping engagement, up from 17 percent.
By a wide margin, the place that teens prefer to shop is Amazon.com. Forty-four percent of the kids surveyed named Amazon as their top online shopping spot, up from 40 percent last year. As a point of comparison, Nike is the second most popular online destination among this group at eight percent. American Eagle (four percent), Urban Outfitters and Forever 21 (both at three percent) follow.
Food remains the favorite category in which teens spend their money. Teens from households with an average annual income of $100,000 spent 24 percent of their funds on food. Those from average-income homes (earning $56,000) spent 21 percent of their total the same way, CNBC reports.
Chick-fil-A and Starbucks are the two favorite restaurants choices for teens. The chicken chain (13 percent) is tops among upper-income teens and the coffee giant number two at 12 percent. Starbucks is tops among average-income kids at nine percent, followed by Chick-fil-A at eight percent.
Clothing follows food as the second most popular category among teens, with athletic and casual streetwear brands gaining favor. The top clothing brands for Gen Z teens are Nike (23 percent), American Eagle (10 percent), Adidas (six percent), Forever 21 (five percent) and Urban Outfitters (five percent). Nike is also tops among footwear brands (42 percent) followed by Vans (16 percent), Adidas (14 percent) Converse (four percent) and DSW (three percent).
Beauty products among girls and video games among boys represent the third most popular categories determined by gender. Sephora is the top beauty destination among teens, with 44 percent shopping there, followed by Ulta (28 percent), Target (11 percent), CVS and Walmart at three percent.
- Taking Stock with Teens Infographic – Piper Jaffray Companies
- Piper Jaffray Completes Semi-Annual Generation Z Survey of More Than 6,000 U.S. Teens – Piper Jaffray Companies/Business Wire
- More bad news for department stores: Gen Z spending more online, less on fashion brands – Minneapolis/St. Paul Business Journal
- Teens would rather eat out than buy more clothes: Study – CNBC
Discussion Questions
DISCUSSION QUESTIONS: What shopping habits do you expect teens to take with them into adulthood and which ones will be left behind? What do retailers/brands such as Amazon, Sephora and Nike have in common that appeal to Gen Z teens?
Poll
BrainTrust
Cathy Hotka
Principal, Cathy Hotka & Associates
Zel Bianco
President, founder and CEO Interactive Edge
Experiential purchases aimed at self-actualization go with them — routine reorders get left to Alexa.
Teens, like most demographic groups, like shopping on Amazon. The retail giant has made the shopping experience easy and has backed it with great customer service. Sephora and Nike have attracted teens through brand messages that resonate, an attractive selection of products and stores that reinforce those brand images. Ease of use, brand image, selection, and customer service set these brands apart from their competition.
I expect that Gen Z will remain deal-conscious. I also suspect that next-gen customers will continue to be drawn to subversive advertising which features “real,” non-airbrushed actors or YouTube personalities.
Amazon, Sephora and Nike are each product-focused retailers with a wide selection of products. Additionally, both Sephora and Nike have customizable product options — with Sephora’s “Virtual Try-on Lab” and Nike inviting online shoppers to “Edit the Design” of their sneakers.
Shopping habits may remain the same, as in Gen Z will always shop online as they go into adulthood, but the brands they buy will come and go. Nike, Adidas and others may be cool now but Gen Z is as fickle as they come — just ask Under Armour.
It’s no surprise that Amazon is Gen Z’s favorite site to shop. It is my favorite as well. Why? Because I can find literally every item I could ever want to find, and it gives me all of the choices I could ever want to compare, without having to go to a dozen brand sites (and being a Prime member allows me to get a decent deal). It’s as simple as that. The online shopping experience — read “easy” — is what makes Sephora, Nike and Amazon appeal to Gen Z teens and much older teens like me.
I think they will stay fairly loyal to Amazon — barring a huge data breach, etc. — but like Ben I think that will fall into some form of subscription model for routine purchases. The fascination with Chick-fil-A will pass once they get old enough to have cardiologists, but again the idea of sourcing ready-to-eat food online will probably carry over. What this study shows is that teens like fast food, fashion and products they believe enhance their appearance — think of it as a digitized version of the 1950s. So the question isn’t really so much which products they will take into adulthood but whether they will turn away from online shopping in general and I think the answer to that is a resounding no. As to the appeal question — hey, these are still teenagers and they like the things teenagers always like. Retailers need to remember that and figure out the most convenient way to get those items to them.
Shopping is about discovery and comparison so the best places, online or physical, that offer this are naturally popular. Staying relevant is the key for retailers and brands as the appetites for information, experience and value are in constant development.
Teen shopping is fickle at best. Anticipating and building upon a teen loyalty program is dangerous and difficult. Amazon is deeply entrenched in all e-commerce and as each younger generation comes of age, it will continue to grow in its reach and strength. Amazon is the future, now. As the online model continues to grow and change, Amazon is leading the charge. Retailers should heed these examples and prepare themselves for a future which starts and ends with Amazon.
Generation Z will continue to shop online. I also noticed that unlike generations before us Gen Zers aren’t afraid to shop anywhere online, because we are (bargain hunters) but that also makes us targets for bad sites. We are constantly having issues with fraudulent sites especially in other countries. It’s hard to know which sites are trust worthy and which are not.
The only connection I see between the online stores you mention is that, like most online stores, their online selection is huge! Why would we want to go into stores and come home with nothing when we can go online and have endless choices which pretty much guarantees a purchase? Generation Zers know what we want and won’t settle for something in its place. We will find it online!
What’s interesting to me is that the stores listed in the story are all mall brands. I wonder if teens will migrate to online-only sellers like StyleWe and Rose Wholesale …
Cash-strapped and image-conscious teens primarily care about two things when shopping – how the purchase reflects their personal sense of style and what the purchase does to their wallet. Amazon’s ridiculously broad assortment gives them many style options and they always compete on price. A win-win for teens. Once they can drive and have more money in their wallets, I expect their shopping horizons will broaden, but the Amazon habit is firmly entrenched in their shopping personas … and will likely stick. Stores will need to lure them away from Amazon with rich, differentiated experiences and deep personalization (a familiar theme for many challenges beyond attracting more Centennials, right?).
Gen Z will expect every online company to be laser focused on their convenience in terms of the shopping process, variety of products, payment and delivery. This includes adopting new technology when it is available. Companies that create frustration in any of these areas will immediately fall out of favor.
There’s been a lot written lately about Generation Z choosing brick and mortar over online, and how they support their communities and local businesses that share their beliefs.
Besides being easy to shop, Amazon is big on philanthropy. Chick-fil-A, Starbucks and American Eagle, like most of Gen Z’s favorite places indicated on this survey, also have a give-back-the-community presence. The Gen Zers I know, or have met doing focus group research, are good at doing their homework. Even at a young age, this is a generation of consumers that knows what it wants.
re: Gen Z — into the future: Instagram shopping … into the past, Facebook anything.
I don’t see a lot of surprises in the survey results — mostly brands that we’ve discussed here on RetailWire before as being successful, digital-savvy brands that understand how to reach their target customer. They know how to be relevant to their customer and provide the value they are seeking. For Gen Z, we see this take the form of seeking discounts and value priced offers from brands that demonstrate a social conscience and can deliver a great shopping experience – all rolled into one.
I don’t see those characteristics changing as this generation gets older. They may expand their brand choices given the products they need to buy, especially apparel — picture a new generation of shoppers looking for professional office apparel versus athleisure wear. The proportions of what type of apparel may change and hat could dictate brand choices. There is definitely an opportunity for brands to engage this audience before those choices are made!
Customer-centric continuous improvement makes these massive, multinational brands irresistible to Gen Z teens. Amazon, Sephora and Nike maintain an entrepreneurial mindset. They stay hungry, innovative and obsessed with delighting shoppers (of all ages).