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The Millennial generation has grown up online. They seek information from Google searches and Wikipedia entries, interact with friends through social media sites, and find their entertainment on video-sharing sites. But one thing they do not do—and something that should be of great concern to marketers—is buy things.

The reason is pretty simple actually. Only about 6 percent of U.S. teens have credit cards, the primary means of payment in online contexts. Without credit, teen shoppers lack a means to buy the items they chat about and find trendy. Instead, these 30 million U.S. consumers distribute the $200 billion they spend annually to brick-and-mortar stores that accept the cash they have earned or borrowed from their parents.

In this sense, teenaged shoppers are a massive and untapped market. Both eBay and Facebook hope to access that market by allowing 13–18-year-old users to set up payment accounts. PayPal and several banks already provide teen-oriented checking accounts, but in those cases, parents must approve each purchase—not something widely appreciated among independence-seeking adolescents. Thus, less than 15 percent of teens indicate that they prefer to buy online.

Instead, they appear to be engaging in a remarkable sort of reverse free-riding: They scan the Internet for fashion ideas and peer approval, then visit the mall to make the purchase. Furthermore, despite the widespread use of social media to interact, teens still rely on the mall as a social meeting space, where they can shop with their friends, away from their parents. A short skirt or risqué t-shirt might never make it past mom and dad’s online radar, but they can still get stuffed into a mall shopping bag, so the folks never know.

Discussion Questions

  1.  Why is it difficult for teens to shop online?
  2. What are retailers doing to ease the situation?

Source: Quentin Fottrell, “Why Teens Snub Online Retail,” The Wall Street Journal, July 26, 2012