In advanced economies the core inflation rate remains high. To improve financial stability and sustain economic growth, economists call for tighter policies. With inflation moving slowly towards sustainable targets investors can leverage insights from teen spending patterns, behavior, and technological advancements to identify broader market and economic trends.
In a recent Piper Sandler Taking Stock With Teens Survey that analyzed discretionary spend patterns, fashion, technology and brand and medium preferences, it was determined that inflation is the second biggest social concern among teens. This could be a sign of a slowdown for teen spending.
“Inflation reached its highest mindshare in terms of political and social issues, right behind the environment,” said Edward Yruma, senior research analyst.
In spite of this, the survey revealed that teens’ discretionary spending, especially in the fashion and tech categories, was strong, even though the optimism among U.S. consumers for Q3 2023 fell slightly compared to the first half.
The survey results revealed that Nike is still the most popular brand among teens for both apparel and footwear, with 35% and 61% respectively. The survey revealed that Nike remains the No. 1 brand in apparel and footwear for teens, with 35% of mindshare and 61% respectively. Meanwhile, the iPhone remains the most popular technology product with 87% owning one. Results showed that 88% expect the iPhone to become their next mobile device while 34% own Apple Watches.
The overall female spending fell by 7%, with apparel spending down by 9% and footwear spending down 5%. However, the male spending increased, as Nike, Inc., Lululemon Athletica Inc., American Eagle Outfitters Inc., were among the top clothing brands of teens.
It is also interesting to see how artificial intelligence could be used to predict future fashion and technology trends for the teenage demographic. This would provide further insight into economic shifts, as supply chains normalize.
AI Predicts the Future of Fashion and Technology
Interested in what the future of the fashion industry may look like, experts at JOOR, the world’s largest wholesale platform and data exchange for fashion, luxury, and home categories, delved into the data and utilized AI image generation to visualize key predictions. Chat GPT was asked to forecast the future of fashion by analyzing how fashion has evolved over time. They then combined this data with projected industry growth and search data in order to get insights into key trends.
“Innovations occur regularly in the fashion industry, whether that’s relating to trends or processes, but the current rate of advancing technology has the potential to create a dramatic shift once fully developed and integrated. Ultimately, this will improve processes from an industry standpoint, whilst also benefiting the consumer,” a spokesperson at JOOR commented.
Nike Inc. revenues increased by 2% in Q1 2024 to $12.9 billion compared to last year. This was due to higher revenues in EMEA, Greater China, and the Middle East, which contributed two and one percentage points respectively.
Since launching new product innovations in Running, Nike’s CEO, John Donahoe, expressed the need to drive more meaningful consumer connections among everyday runners and in turn scale those innovations more effectively across the marketplace. Nike’s executives want to use its scale and reach, which is unmatched in the marketplace, to create more compelling offerings for women.
Apple Inc. on the other reported a 4% drop in its Products revenue, which was $60.6 billion. It cited headwinds and an uneven economic environment as the main contributors to the revenue loss. On the contrary, Wearables, Home, and Accessories revenue was $8.3 billion, up 2% Y/Y with strong performance in several emerging markets as the Apple Watch continues to expand its reach with about two-third of customers purchasing an Apple Watch last quarter, being new to the product, according to Luca Maestri, CFO & SVP at Apple.
“A trend we’re likely to see progress in the future is wearable technology in activewear and even everyday clothing,” according to experts at JOOR.
Wearables are expected to reach a market worth of 4.4 billion dollars by 2027, up 1,530% on 2018. The industry will transition from the wrist-mounted monitors it currently uses to something subtler. In addition to tracking data exclusively for monitoring health in the future, wearable fashion could also include technology that monitors stressors on the environment such as heatwaves or have a cooling mechanism.
TikTok for AI Data Aggregation
SnapChat was ranked No. 2 with a share of 28%, followed by Instagram (23%). Instagram is second, with a 28% share. The consumption of social media can be used to determine how the consumer behavior of teens affects Gen-Z, Millennials and even Gen-Z demographics. This will change broader economic trends.
Nike increased audience engagement by 172% on TikTok when it used the platform as its primary channel to reach Gen-Z.
“We also [bring] We brought to life our culture through storytelling and dominated social media with our dominant share. In particular, we were incredibly effective in reaching Gen-Z women through our lens of sport, style and culture,” Donahoe said.
Additionally, Apple’s installed base reached an all-time high across all geographic segments last quarter. Consequently, the tech giant is seeing very high levels of customer satisfaction and loyalty driven by last quarter’s record for iPhone switchers and high new-to rates in Mac, iPad, and Watch.
JOOR used AI image generation to visualize the future fashion. They also leveraged TikTok and Google search to gain insight into which areas of interest have grown the most in the past five years. They also looked at emerging fashion trends on TikTok over the past year based on hashtag views to establish what has influenced elements of today’s fashion and what could influence the fashion of tomorrow. Using a combination insights from the previous year, they then developed prompts that generated AI imagery on the platform Midjourney. The images produced were:
Covid Fashion – Younger generations romanticize the comfort and anonymity that Covid-19 garments provide.
Quiet Luxuries x Clean Girl – Combining two viral 2020 trends.
Barbiecore x Fairycore: Nostalgia for the ‘Barbiecore period’ that trended due to the film.
TikTok data shows that some of the most popular fashion trends in 2023 are Y2K with 23.1 billion views, and ‘90s Aesthetic’ with 3.2 billion views, according to experts at JOOR.
“Nostalgia in fashion typically occurs on a 20-year cycle, and with the rise of social media platforms it has become easier than ever before to consult trends of former periods as a reference and draw from the metaphorical archives. In 20 years time, this could look like younger generations drawing on fashion that is typical of the 2020’s, whether that’s the ‘clean girl’ aesthetic or more of a ‘barbiecore’ meets ‘fairycore’ twist, or even a look that’s more reflective of the loungewear and face masks popularized by the pandemic,” a spokesperson at JOOR said.
Retail is moving towards circular economy and sustainability
Since fall 2022, the Piper Sandler study also revealed that teens’ shopping preferences have shifted away from discount and specialty stores and towards online-only e-tailers and off-price retailers.
Circular fashion is predicted to increase by 96% from its current valuation of $120 billion to $126 billion by 2026. Although some brands offer the ability to repair garments on-site or to return and recycle them, the technology is expected to change this.
JOOR believes that the circular economy has the potential to be much more mainstream. It uses AI to visualize a process of store returns where the garments are recycled, redesigned based upon new trends and/or reprinted.
JOOR experts predict that AI will allow retailers to reduce their physical inventory, allowing them to offer a more customized shopping experience to consumers. Instead, the consumer could select their material, style and color in an online software before 3D printing it to their specifications.
Similarly, sustainability is expected to dominate fashion and technology in the coming decades. A vast majority clothing will be made from sustainable materials such as leather substitutes made of mushrooms.
“Environmental impact can be reduced by altering the materials we utilize in clothing as well as addressing processes. One way to do this is through consumers ‘producing’ their own clothing by leveraging existing brand styles through AI programs and then 3D printing this in-store to meet their sizing requirements. These fit the consumers perfectly, minimizing the need for returns, and when the consumer no longer likes the item or changes size, they can return the item to the store for a fee and then reprint this to generate a new garment.”