According to a semi-annual survey from Piper Jaffray Cos., total spending by U.S. teenagers topped $77 billion in 2018. Teens are spending more time with online-only retailers.

U.S. teenagers are spending more time shopping with online-only retailers and less with department and specialty stores, a report finds. And Amazon.com Inc. is by far their favorite online shopping destination.

Total spending (online and offline) by U.S. teenagers (ages 13 to 19) topped $77 billion in 2018, according to a semi-annual survey of the roughly 8,000 U.S. teens from investment bank and asset management firm Piper Jaffray Cos. Self-reported spending averaged about $2,600 per teenager per year. That was up 1% from a year earlier and 6% higher than the average amount reported in the fall 2018 survey.

When they shop online, 50% of all teens surveyed named Amazon as their favorite retail website, up from 47% last fall and 44% from spring 2018. The second-ranked website, Nike.com, was cited by just 5% of the teens in the most recent survey. That matched Nike’s percentage in the fall 2018 survey and was down a point from the spring 2018 survey.

The devotion to Amazon (No. 1 in the Internet Retailer 2018 Top 1000) can be chalked up partly to the widespread adoption of Amazon Prime membership, says Mike Olson, senior research analyst at Piper Jaffray. Amazon.com Inc. had 101 million members of its Prime loyalty program in the United States as of December, according to estimates from Consumer Intelligence Research Partners. Prime adoption in the Piper Jaffray survey was 76%, up from 70% in the spring 2018 survey.

High adoption rates for Amazon Prime only partially explain why Amazon is so popular with U.S. teenagers, Olson says.

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“I’m sure that’s correct that some of the teen preference for Amazon is due to a parent’s Prime membership, but it’s not the only factor,” Olson says. “For example, teens would not cite Amazon as the most preferred online shopping destination, regardless of parent’s membership, if it did not have the desired inventory or products or if the pricing wasn’t competitive.”

The overwhelming majority of teens from upper-income households shop online (those in households averaging $105,900 in income). In that category, 91.0% of males and 89.0% of females shopped online as of spring 2019. Each was an all-time peak percentage in the Piper Jaffray survey. Roughly 2,000 respondents were in the upper-income category. Data for teens in average-income households (average of $55,000 per year) was not available.

Upper-income teens also spend an increasing amount of time shopping with online-only merchants, while spending less time shopping at department and specialty stores. Teens in that category say they spend 24% of their total shopping time with online-only retailers and 37% with department and specialty stores. In the spring 2018 survey, those numbers were 19% and 38%, respectively.

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While Amazon is the dominant online retail destination, Piper Jaffray found brand websites are popular with “sneakerheads”—the 31% of male teens and 22% of female teens who describe themselves as sneaker enthusiasts. In that group, 64% of male teenage shoppers and 84% of female teen shoppers prefer to get sneaker information directly from the website of a sneaker brand. On average, this group owns eight pairs of sneakers and buys eight pairs per year. More than 30% of sneakerheads buy new sneakers every month.

Sneaker brands like Nike and Adidas continue to get closer to consumers by selling directly to them, says Erinn Murphy, a managing director and senior research analyst at Piper Jaffray. In response, sneakerheads go directly to the brands for their information and sneaker research.

The tendency of sneakerheads to visit brand sites makes sense, Murphy says. She pointed to Nike.com, which has a membership base of about 100 million consumers. Nike typically launches its best products on its website or mobile apps, such as its SNKRS app.

“Sneakerheads who want the latest product go right to the source, versus a marketplace or a retailer that may not have the latest stuff,” Murphy says.

Among the other ecommerce-related findings:

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  • 80% of female teens use online influencers as a source of discovery for beauty brands and trends—up 900 basis points year over year.
  • Apple iPhone ownership was up slightly at 83%, the highest-ever recorded in the survey. Also, 86% of teens said their next phone would be an iPhone, no change from the fall survey.
  • Smartwatch ownership rose significantly to 27%, up from 21% in the fall. However, Apple Watch buying intent was down slightly with 22% planning to buy an Apple Watch in the next six months compared with 23% in fall 2018.
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