Teen Spending Trends in 2024: A Closer Look

• Teen spending in 2024 is estimated at $2,361 annually, a 6% increase year-over-year
• Key spending areas include clothing, footwear, and beauty products, with Nike as the top apparel brand
• Beauty spending at approximately $342 annually, with teens favoring brands like e.l.f. and CeraVe
• Employment among teens has risen, with a record-high number of working teens in 2023

Beauty purchases reached a five-year high, particularly among young female consumers who lean towards affordable brands like e.l.f. and CeraVe. This uptick in spending coincides with higher teen employment rates, as 2023 saw the highest levels of working teens in over a decade. Rising wages and flexible work schedules have given teens increased disposable income, allowing them to indulge in discretionary spending even amid lingering inflation. Additionally, many teens now prioritize part-time work, balancing it with school responsibilities. This reflects a shift towards financial independence and, for some, even investing early.

Teenagers are not only increasing their spending but also shifting brand preferences. While Nike continues to dominate, other brands like New Balance and Adidas have gained traction, particularly among upper-income teens. Beauty spending, in particular, has surged, with a 25% year-over-year increase in fragrance purchases. Stores like Sephora and Ulta are preferred destinations, though Ulta has recently lost some ground to Target, which is gaining popularity as a beauty product retailer.

Economic implications

From an investor perspective, these trends offer insights into brand performance and potential shifts in market share. Nike’s recent decline in footwear mindshare, particularly among female teens, indicates that competitors are successfully capitalizing on changing preferences. The growth of brands like New Balance, which has doubled its mindshare among upper-income teens, highlights the potential for newer or revived brands to capture significant market segments. In the beauty sector, affordable brands are expected to see continued success, as teens demonstrate a preference for budget-friendly options despite increased spending.

Teen spending plays a vital role in the broader economy by sustaining consumer demand across various sectors. As these young consumers increasingly engage in discretionary spending, brands aligned with their preferences are likely to benefit. However, economic uncertainties such as inflation may still limit spending power. Teens are part of a larger consumer trend towards selective spending, with many opting for affordable or durable options, indicating a cautious approach that could impact high-margin luxury brands.

For investors, monitoring these shifts is crucial. Companies that can adapt to teen preferences and capitalize on current trends, such as beauty and athletic wear, are likely to see sustained demand. Additionally, the focus on affordability may drive brands to diversify product lines to meet the growing demand for budget-friendly options.

The bottom line is that while teen spending has increased in 2024, this growth comes with nuanced shifts in brand preference and spending categories. Brands that cater to affordability and current fashion trends are well-positioned to benefit from this young and increasingly influential consumer group.