Teens:
A Powerful Consumer Group
The stereotypical image of boys either spending
their money on sweets or saving up for a bicycle has been
consigned to the recycle bin. In the last ten years, an extensive
range of mid-ticket purchases has emerged, embracing fashion
items and video games. Teenagers regularly save for these
purchases, and have become more responsible with their money.
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'12-16
year olds
currently wield an
annual disposable
income of £3bn in
the UK alone.'
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With demographics indicating growing teenage population
(see Social & Demographic Trends),
teens have become a powerful consumer group. In fact, 12-16
year olds currently wield an annual disposable income of £3bn
in the UK alone. |
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Teen weekly income has also grown significantly since
1993 (see figure 2), and seems
set to continue an upward trend. Almost all of it goes on
leisure items - favourite purchases include magazines, CDs,
clothing, books/stationery and cinema trips. |
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Twelve-year-old Tara from Catford, London, shows off
her bags from New Look, Claire's, HMV and C&A following an
afternoon on Oxford Street, 'I've just spent £50-£70 shopping
in London. I didn't buy anything large, just a few clothes
and CDs.' Tara is unusual for a 12-year-old because she has
a Solo card, a debit card aimed at older teens, 'but I only
use it as a cash card.' Her parents support the account. |
Kids
and Teens Online
An estimated 4 million 7-16 year-olds are expected
to have used the Internet by the end of 1999, about half of
them at school. This is set to rise as a result of initiatives
such as the government's National Grid for Learning (NGfL),
which is intended to allow all children access to the Internet
by 2002, and the Microsoft- supported Anytime Anywhere Learning
(AAL) project which is aimed at equipping each student with
their own laptop.
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For
those children online, the favourite applications are chat
and email. Games are not far behind. New
systems such as interactive TV and Sega's Dreamcast are also
poised to increase the number of teenagers online. Sega claim
that Dreamcast, combining a powerful games console with Internet
access and email, will 'introduce a new demographic to both
surfing and gaming'. |
'Teenagers
are begging
credit cards from their
parents in order to make a purchase. It is unsatisfactory
for them because they can't
buy as and when they want.
We are losing sales.'
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Generation
Y: The Wired Generation
Indeed, today's teenagers have grown up with the Internet
- they are truly the wired generation. Surprisingly though,
there is very little online to appeal to them. Few of the
magazines teens read have made the transition to the online
environment, although Sugar's publishers recently launched
an initiative with AOL.
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This phenomenon can be largely attributed to the lack
of a clear revenue stream in the teen market - it is difficult
to support a site on advertising alone, especially when the
lack of teen payment systems has cut off the potential for
direct e-commerce to the target market. A 'wait and see' attitude
and alternative priorities have also contributed to the gap
in the market. |
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Y-creds is a payment system based on a voucher
account that enables this generation to shop online. By
opening up the possibility of an e-commerce revenue stream,
teen websites and portals are instantly more attractive
to content providers and advertisers. We have built our
own portal at y-street.co.uk
to help fill the current market void, and are on the lookout
for third party partners to develop further portal initiatives.
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'Y-creds
is a payment system that enables
teens to shop online,
and opens the possibility
of a revenue stream for
teen-oriented products,
services and portals online'
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Y-creds has been built with three customers in mind
- retailers, parents and teens. For stores, it opens up a
whole new market (with little cannibalisation of existing
sales); for parents, it represents a safe environment with
extensive controls including store selection and age-restriction
of every purchase, and for teens .... well, they can now join
the rest of us in the e-commerce revolution. |
Adding
Retailer Value
Retailers welcome the opportunity that Y-creds
presents. William Flatau, Managing Director of Software First,
a leading online games store, says that 'we estimate that
at least 10% of the people visiting our site are under 18.
It is clear to us that these customers want to have access
to a payment system that is currently unavailable.' |
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Flatau relates his experiences of teenagers making
purchases with parents' credit cards - even if they have
permission, there is still the problem that the cardholder
is not the same as the person placing the order. He continues,
'Teenagers are begging credit cards from their parents in
order to make a purchase. It is unsatisfactory for them
because they can't buy as and when they want. We are losing
sales.'
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The draw of the Internet to teenagers is reflected in
the number of young visitors to online concert booking agency,
Aloud.com. 'We have masses of interest amongst under 18s for
groups such as Steps and Boyzone. They use their parents'
credit cards to buy tickets,' says Paul Gill, Head of Music
and Entertainment at EMAP Online which owns Aloud. |
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Curtis Ault, affiliate marketing director at Blackstar,
an online British video store, has similar experiences, 'we
have a significant number of teenagers coming to the site.
I think it's very important that we introduce a system which
enables them to buy from us.' |
'Parents
and relatives
can contribute to
teen's y-creds accounts
as an alternative to
pocket money. It's quick, safe and easy.'
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Y-creds
are redeemed directly with retailers ... in the same way that
an adult will not go to visa.com to make a purchase, an account
holder will not go to y-creds.co.uk
(except to check their balance or to find out which new stores
have joined the programme). In this sense, we allow the stores
to take ownership of the customer base. |
Providing
Parental Assurance
It will not be a surprise that market researchers
Mintel have concluded that parents are more likely to fund
a product which they approve of and from which they will also
take pleasure. This is also part of Y-creds' strategy - parents
are regularly reassured that the product is safe for their
children. The system has a 'permissions' approach which includes
controls for the adult to determine the stores that are accessible,
along with age-restrictions that prevent someone buying a
product such as a video or game that is not rated as suitable
for them. |