The results are in.
Pipe Sandler published the findings from its semi-annual teen survey, which offers incredible insights into how teens are spending their time and more importantly, what they are spending money on. Below are some of the findings from the companies we own in the portfolio.
Nike (NKE) stood out as a winner in Global Lifestyle brands as the company held onto its number one position in apparel for the tenth consecutive year. Furthermore, the company strengthened its lead over the competition by increasing share to 27%, a figure that is up 400 basis points from last year. Nike pulled away from its peers in footwear and 52% of respondents named the company their favorite footwear brand, and that figure is up from 47% in the spring and 42% last fall.
Amazon (AMZN) came in as the favorite website for shopping and the results were not even close. Fifty-four percent of upper-income teens put the e-commerce giant at the top of the list, up from 52% in the spring. SHEIN and Nike were in the second and third spots at 5% a piece, showcasing the dominance the Amazon marketplace has in e-commerce.
Apple (AAPL) scored well in the survey with iPhone ownership up to 86%, the highest level in the history of the survey and up from 83% from last fall's survey. Additionally, the percent of teens who said their next phone will be an iPhone was 89%, another record level in the survey's history. These two metrics are incredibly important ahead of the company's upcoming 5G launch, which we expect to learn more details about next Tuesday, Oct. 13 at Apple's special iPhone product event. On the wearables side, it looks like penetration of the Apple Watch continues to grow in the teen community. With smartwatch ownership down to 30% from 31% in the spring, Apple Watch ownership was flat at 25% over the same period and the Apple brand has closed in on Rolex as the favorite among upper income teens.
In Restaurants & Branded Hospitality, Starbucks (SBUX) remained the most preferred brand in coffee and maintained a double-digit mindshare among upper-income teens (though at 10%, Starbucks is well off historical peak levels in the upper-teens percent) and the number two spot among average income teens. Starbucks may not have picked up any material ground in the survey, but Piper still said they "continue to view Starbucks' brand equity as relevant social currency."
In the streaming wars, Netflix (NFLX) (34%) remained in the top spot in terms of teen daily video consumption, though Alphabet’s (GOOGL) YouTube (32%) stayed close on its heels. Disney’s (DIS) Disney+ and Apple TV+ maintained their fifth and seventh spots in the standings, respectively, though share for each dipped by about 1% to 7% and 1% relative to the spring results, respectively. Disney had to delay a lot of new content for the platform this year due to Covid-19 and that could have factored into the decline. We also expect time on the Disney+ to improve in November following the highly anticipated release of Season 2 of The Mandalorian.
In Video games, though Activision Blizzard’s (ATVI) Call of Duty franchise and Epic's Fortnite were the leaders in terms of popularity, the survey was very bullish on overall engagement and suggested teens are spending more time and money on video games. According to the results, teens playing daily increased to 31% compared to 26% in the spring, and more teens are coming into the category with teens who never play declining to 31% from 35%. Additionally, more than half (57%) of teens said they are spending more time playing video games this year compared to 2019, and that number is up from 33% in the spring and the beginning of the Covid-19 pandemic. On spending, video games represent about 10% of total wallet share, a new high for the survey, while upper-income teen males are dedicating about 17% of their wallet to video games. This jump moves video games into the number two wallet share priority from the three spot, putting the category ahead of clothing and trailing only food. Take-Two Interactive Software (TTWO) may not have been mentioned by name in the survey, but we believe the survey checks out positive for the entire industry, especially ahead of this fall's next-gen console launch.