The Harris Interactive survey detailing the online shopping habits of 8- to 21-year-olds (see “Parents Just Say No”) 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. We’ve actually done a lot of studies, and there does seem to be a peak at high school. There’s a natural cognitive factor that’s limiting the growth of Internet usage among tweens. 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 has money to spend in college at that point. They are less likely to have cars and more likely to be wrapped up in social life on campus. The social aspect among teens 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: That sort of caught me out of the blue. Shipping costs are a little bit out of hand, which is why Amazon offers 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 speculate whether it’s just with that group or refers to 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.
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