Piper Sandler on Tuesday released the results of its semi-annual survey on Gen-Z teenagers, with bullish implications for a slate of Club holdings. We think this survey is vital because it provides important insights into a key trend-setting demographic. If a brand or retailer can capture the attention of a consumer while they’re still young, then there’s an opportunity to engrain a sense of customer loyalty and increase their lifetime value. Attracting consumers while they’re young is crucial, with younger shoppers more likely than their parents to walk away from a company if they have a negative experience, according to a 2022 customer loyalty survey from PwC. For its latest report, Piper Sandler surveyed 5,690 U.S. teens between Feb. 13 and March 21, with an average age of 16.2 years across 47 states. Fifty-three percent of respondents identified as male, 45% as female and 2% as non-binary. The average household income of those surveyed was $67,691 and 40% of the teens held part-time jobs. Beauty Spending on “core beauty” like cosmetics (up 32% annually), skincare (up 11% annually) and fragrances (up 12% annually) rose 19% year-on-year in aggregate. Cosmetics overtook skincare spending for the first time since 2020, the survey showed, with Club holding Estee Lauder (EL) a key beneficiary of this uptick. Haircare saw a marginal 1% year-over-year gain, but that’s of little concern to us given Estee Lauder’s minimal exposure to the haircare market, a dynamic highlighted by Piper Sandler. Equally important, 45% of respondents identified as “everyday makeup wearers,” up from 37% last year. That number is even higher in the upper-income teen cohort. Retail The Club’s off-price retail holding, TJX Companies (TJX), stands to gain from what the survey showed to be a 500-basis-point annual increase in teen preferences for off-price shopping channels. Internet On the ecommerce front, 57% of survey respondents cited Club name Amazon (AMZ) as their favorite online retailer. That’s up from 52% during Piper Sandler’s fall survey on teens. Meanwhile, Club holding Meta Platforms (META) screened well, with Instagram monthly usage consistent with the fall survey results — at about 80% of teens — making it the most-used social media application. Rival TikTok saw its engagement among teens decline in the same period, to 72% from 76%, even as it still emerged as teens’ favorite social app. In terms of popularity it was followed by Snap ‘s (SNAP) Snapchat app and then Instagram, which continued to gain traction. Meanwhile, usage of Meta’s Facebook increased 100 basis points during the same period. We think that usage is a more important metric than popularity, given advertisers are more concerned with engagement — which portends more sales opportunities. As Piper Sandler noted, these are encouraging results that highlight Meta’s ongoing product-improvement initiatives. Payments So, how are teens actually paying for all these purchases? Apple ‘s (AAPL) Apple Pay took the top spot, with 39% of respondents ranking it the number one payment app used in the last month, according to the survey. That tracks with survey data showing 87% of teens own an iPhone, while 88% said they intended to purchase one. Apple Pay came in well ahead of Block ‘s (SQ) Cash App, which saw 25% of teens rank it as their go-to for payments. But Cash App dominated for peer-to-peer money transfers, followed closely by PayPal ‘s (PYPL) Venmo. The Club’s take Piper Sandler’s survey, of course, targets a cohort with a limited budget. Nonetheless, the responses from U.S. teens highlight which companies are winning the mindshare of this increasingly important demographic. Today’s teens will only see their spending increase as they enter the workforce, driving growth at the brands best able to attract their loyalty now. At the same time, the survey indicates that teens are increasingly focused on environmental, social and governance issues (ESG) at the companies at which they shop, with the environment and racial equality the top issues for the group. That’s a trend likely to accelerate even further in the coming years. ( See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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Piper Sandler on Tuesday released the results of its semi-annual survey on Gen-Z teenagers, with bullish implications for a slate of Club holdings.
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