You probably read about the teen that racked up thousands of dollars in debt as he participated in an online auction. The site operators had no idea he was just a kid and the child's parents had no idea that every mouse click was hundreds of dollars.
There's a new trend in the online marketplace that could help with situations such as this. Three Web sites (I Can Buy, RocketCash, and DoughNet) have come up with ways to introduce teens to the Web while reducing their risk. The sites hope to make kids and teens comfortable with purchasing on the Web so that this market can mean big money for Internet merchants in the future.
Teen Power
The teen market has huge purchasing power. In 1998 alone the 13 to 18 age group spent $141 billion at the POS. Recognizing the potential revenue these kids will generate when they are old enough to get credit cards and checking accounts, Internet marketers want them purchasing from their sites now. But, of the 6.3 million teens that actively used the Net in 1998, only 1.8 million bought something online, according to the research firm eMarketer. And while kids and teens are the two largest growth sectors on the Net, in 2002 they will directly account for less than 5 percent of online shopping revenues, according to Jupiter Communications.
The Opportunity
Some industry analysts believe that if kids aren't offered the payment mechanisms or the opportunity to shop online, they will not learn to use the Web responsibly or feel confident purchasing online. And if they aren't comfortable purchasing on the Web, Web merchants will have a difficult time taking advantage of that market. Thus, sites such as I Can Buy, RocketCash, and DoughNet were born.
These type of sites present an online mall for teens and allow parents to set up electronic bank accounts for their children. Parents can also choose when and where their kids are allowed to make purchases, as well as limit the amount a child can spend on each item. At some sites, the parent can have full control over any purchase, so the child cannot buy anything without permission. At other sites, the traditional mall experience is mimicked. Kids are essentially "dropped off with 20 bucks" and it's hoped they make educated decisions.
Education
While this is business and the ultimate goal is to increase sales for the merchant, there are some parts of the sites that can educate kids. Unlike mom or dad's credit card, the accounts are not bottomless so it's hoped the teen shoppers gain a better understanding of money. Also, some sites provide investment games that teach kids about following the stock market or building capital. Additionally, users can donate some of their funds to non-profit organizations.
Skepticism
Of course, there is some skepticism that these sites create a false security. Opponents fear that when teens are let loose, they won't have a real sense of Internet purchasing and will get in real financial trouble, similar to the booming credit card debt of today's college students.
