Nike And Apple #1 Brands Among Teens—How AI Can Help Predict The Future Of Fashion And Technology

Core inflation remains elevated in advanced economies, with economists calling for tighter monetary policies in order to improve price and financial stability for sustained economic growth. With inflation only slowly moving towards sustainable targets, investors can leverage insights into teen spending patterns, behaviors, and advancements in technology to identify broader economic and market trends.

In a recent Piper Sandler Taking Stock With Teens survey that analyzed discretionary spending patterns, fashion trends, technology, and brand and media preferences, inflation was determined to be the number two social concern among teens, pointing to initial signs of a slowdown in teen spending.

“Inflation reached its highest mindshare in terms of political and social issues, right behind the environment,” said Edward Yruma, senior research analyst.

Despite this finding, the survey results found that discretionary spending among teens, particularly across fashion and technology categories, is strong even as overall U.S. consumer optimism in Q3 2023 dropped slightly from first half of the year.

Key findings from the survey revealed that Nike remains the No. 1 brand for all teens in both apparel and footwear, with 35% and 61% mindshare respectively, while the iPhone continues to dominate as the preferred technology product, with 87% of teens owning one. Results also showed that 88% of teens expect the iPhone to be their next mobile device, while 34% of teens own an Apple Watch.

While female spending decreased overall 7% Y/Y with lower spend across apparel (-9% Y/Y) and shoes (-5% Y/Y), males led the spending increase as Nike, Inc., Lululemon Athletica Inc., and American Eagle Outfitters Inc. ranked among the top clothing brands for teens.

Even more interesting, is how artificial intelligence can be leveraged to predict the future of fashion and technology trends among the teen demographic to help glean further insights into broader economic shifts as supply chains begin to 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. They asked Chat GPT to forecast future fashion based on how fashion has changed through time, and combined this with search data and projected industry growth data to gain insights on 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

Nike Inc. revenues increased 2% to $12.9 billion in Q1 2024 compared to the prior year, driven by higher revenues in EMEA and Greater China that contributed 2 and 1 percentage points to the retailer, 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. With its best-in-class marketplace, Nike executives are seeking to leverage its unrivaled scale and reach to deliver more compelling assortments with a focus on serving its women consumers.

Apple

Apple Inc., on the other hand, reported a 4% decrease last quarter in its Products revenue to $60.6 billion, citing headwinds and an uneven macroeconomic environment as a key contributor to the slight revenue losses. 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.

Estimated to grow to a market value of 4.4 billion by 2027 (up 1,530% from 2018), the wearables industry is set to transition from its current wrist monitor form, to something more subtle. Moving beyond tracking data solely for monitoring health, future wearable fashion may also incorporate technology that monitors environmental stressors such as heatwaves and has the potential to implement a cooling system.

AI Data Aggregation Using TikTok

The Piper Sandler survey also showed that TikTok improved slightly as the favorite social platform among teens with 38% share, while SnapChat was No. 2 with 28% share, followed by Instagram (23%). Social media consumption can also be used to understand how consumer behavior among teens influences the Gen-Z and even Millennial demographics, thus shifting broader economic trends.

Using TikTok as its priority channel for Gen-Z in order to connect authentically with this demographic, Nike saw a 172% increase in audience engagement on the social platform.

“We also [bring] our culture of innovation to life through our storytelling, as we dominated the conversation with the leading share of social voice. 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.

With this in mind, JOOR sought to visualize the future of fashion using AI image generation, leveraging TikTok, Google search, and projected industry growth data to monitor how interest in core areas have changed over the last 5 years while gaining insight into the ones which have increased the most. 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. Then, utilizing a combination of the above insights, they developed prompts to generate AI imagery using the platform Midjourney to produce the following images:

Covid Fashion: Younger generations romanticizing the comfort and anonymity of Covid-19 wear.

Quiet Luxury x Clean Girl: Combining two viral trends of the 2020s.

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 Trending Towards Circular Economics and Sustainability

The Piper Sandler survey also revealed that shopping channel preferences among teens have shifted toward off-price and online only e-tailers, away from specialty, discount, and outlets since fall 2022.

However, the circular fashion economy is expected to increase 96% by 2026, from its valuation in 2022, to $120 billion. While some brands are already offering the ability to have garments fixed in-store, or returned and recycled, this is predicted to transition with the development of advancing technology.

JOOR sees the circular fashion economy as having the potential to become much more mainstream, using AI to visualize a store returns process whereby the garment is recycled, redesigned based on new trends, and/or reprinted.

Another prediction from JOOR experts is that AI will create a more personalized shopping experience for consumers, allowing retailers to reduce the need to stock physical items. This would instead allow the consumer to select material, style, and color within an online software, and then 3D-print this to their own dimensions.

Likewise, sustainability in fashion and technology is expected to take precedence in the coming decades, with a vast majority of clothing consisting of sustainable materials like mushroom-based leather alternatives.

“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.”