As online shopping among teenagers continues to grow, retailers must focus on teens' relationship to technology and family to reap the most from this market, according to a new report.
Posted Dec 11, 2006
Most might not have jobs or credit cards, but teenagers are still managing to spend a hefty sum online. In 2006 teens ages 13 to 17 will have spent $3 billion on the Web and this number is expected to grow in the upcoming year, according to a new report from Jupiter Research. The study, "Teen Online Shoppers," finds that this five-year age range accounts for 3 percent of all online sales in the United States. Although a lack of independent spending money prevents larger personal purchases, teens report to have a heavy influence on parents' online purchases of household items. Marketers should pay close attention to teens' influence and online spend as new Web activity like blogs and social networking sites continue to grow in popularity with this age group.
In 2006, a substantial 43 percent of teenagers made online purchases. Online spend for teens will grow at a compound annual growth rate of 17 percent over five years to reach $5 billion by 2010. While many companies are scrambling to develop new, cool online presences to attract this crowd, it is important to remember that these teens are not completely independent, according to the report. "Retailers need to understand that the teen is not the only one making the purchase decision," says Patti Freeman Evans, an analyst at Jupiter Research and author of the report. The vast majority (83 percent) of teens say that parents are present when they buy online. Freeman Evans says that retailers must make sites that are both attractive to teens and to their parents to ensure the order goes through.
Although the parent/teen relationship may be seen as a hurdle by some retailers looking to market directly to the buyer, it can serve as an opportunity as well. Nearly a quarter (24 percent) of teenagers say that their parents take their advice into account 100 percent of the time when making large household purchases. This percentage increases to 29 percent for older teens (age 17). This means that retailers, who might not consider teens as their primary target audience, should perhaps consider their influence on their parents' choices. Freeman Evans cites the "classic example of the parents [who] can't program their VCR, but the six-year-old can do it." She says that especially regarding technology-driven choices, retailers should concentrate on the teen market as the ones pulling on the credit card strings.
One of the most crucial things to consider when connecting to teens is new technology. The report highlights customer-created content as a big driver in teen purchase decision-making. The study finds that 37 percent of teens trust expert reviews found online and 26 percent trust user reviews, both of which rate on the very low end of usefulness among adults. Additionally, newer buying options such as PayPal and online wish lists may provide opportunities for retailers to connect to teens without their own cards. Freeman Evans says, "We are in a heavy development stage in terms of new experiences. We should be wary of those and rigorous evaluation of these new experiences will be beneficial."
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