Demographic Targeting, Parts 1 and 2
by Andrew Grossman
February 19, 2005
Demographic Targeting Part 1: Parents Just Say No
Companies that thought they could make hay selling clothing and video games to teens online may want to think about floating them a loan instead, judging from the results of a Harris Interactive YouthPulse survey of 2,148 people 8-21 years old.
And if you want to reach the tween set, you should target your media messages as much to parents as to the youngsters themselves. That's because slightly more than half of the 12-and-under crowd said that they'd had to abandon a purchase because of parental interference, by far the number-one reason for shopping-cart abandonment among that age group. In comparison, 27% of the older kids said their parents had forced them to abandon an online purchase. The top reasons teens cited for aborting an online sale were an aversion to paying shipping costs (45%) and the age-old teenager's complaint: They were broke (42%).
Teens and tweens pumped $22 billion into online retailers' pockets last year, which represented 16% of their total spending, but little of that money came from the preteens, according to Harris. Those kids spent an average of $218 a year, compared with $866 for 13- to 15-year-olds, $682 for 16- and 17-year-olds, and $1,330 for the college-age sample. Harris analysts believe that online spending declines among older high-school students because they enjoy the social aspects of shopping at malls with their friends. That preference ends once they get to college or enter the work force, they added.
Demographic Targeting Part 2: Parsing the Online Youth Market
The Harris Interactive survey detailing the online shopping habits of 8- to 21-year-olds (see "Demographic Targeting Part 1: Parents Just Say No," above) failed to surprise to James Chung. The president of Reach Advisors, a Boston-based strategy and research firm that focuses on lifestyle-driven industries, Chung spoke with CHIEF MARKETER about the youth market and e-commerce:
CHIEF MARKETER: The Harris Interactive survey suggested a disparity among kids who shop online, with tweens the least likely and college-age people the most likely to do so.
Chung: It doesn't surprise me at all. There's a natural cognitive factor that's limiting the growth of Internet usage among tweens. In addition, they are still trying to develop friendships and a sense of who they are in the physical world vs. teenagers.
CHIEF MARKETER: How much does the social aspect of shopping at a bricks-and-mortar store vs. the isolation of the Internet play into the trend?
Chung: The 18- to 21-year-old population, if in college, is less likely to have cars and more likely to be wrapped up in social life on campus. But for teens, the social aspect of shopping is critical. Shopping online is not a social event vs. shopping in the real world at a mall.
CHIEF MARKETER: The Harris survey reported that one of the biggest factors that discourage teens from shopping online is shipping costs. Did that surprise you?
Chung: Shipping costs are a little bit out of hand, which is why Amazon finds a competitive advantage in offering free shipping [for purchases] over $25. The issue of not having any means to pay goes back to [parents taking control of their kids' lives]. Five years ago parents would not hesitate to give them a credit card and say, "Go charge it." It was part of the culture in raising kids. That's less of a case now. It's now a case of parents trying to take back a little more control over their children's lives. The average age of getting access to credit cards is no longer dropping.
CHIEF MARKETER: What accounts for the popularity of auction sites among teens?
Chung: You have to question whether that’s happening just with that group or the population at large. Assuming it's an important factor with that group, I'd say the pricing factor [is critical]. If you take a look at the average online sales price vs. the retail price, it's half off. So the budget is one issue. The second thing is the particular appeal of online auctions, in that they made [shopping] to some extent entertaining. It's a fun way for people to engage online.
Copyright 2005, PRIMEDIA.
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