Net Meeting

Youth of an e-Nation & What's in Store?

Teenagers and the Web have grown up together, so it's no surprise that 76 percent of 14- to 17-year-olds use the Internet, according to Department of Commerce figures. That compares to 54 percent for the general population. Traditional teen purchases, such as clothing and entertainment tickets are all strong sellers in general online, giving the teen market special status among online retailers.

But just like seniors, teens are less likely to buy something than to send e-mail, visit an entertainment site or research a product or service. Just 31 percent are logging on to purchase something, significantly less than Internet users in general. That's not necessarily because teens are reluctant shoppers, says Carol Fitzgerald, 46, CEO and founder of The Book Report Network, a company in New York City that sells books through Teenreads.com and other Web sites. Three teen-oriented titles were among The Book Report Network's top sellers recently. Teens are ready buyers, says Fitzgerald: "They took a look at the page and immediately clicked through."

Teens do present significant shopping challenges to retailers who'd like to tap the market, however. Payment is one problem. Because teens lack their own credit cards, they have to pay with a parent's card or use one of the nascent online payment alternative services aimed at teens. That's why gathering information in preparation for making an offline purchase is still the predominant way the Net figures into teen shopping.

Teens also raise serious privacy and protection issues. Teen online retailers like The Book Report Network are barred by privacy rules from gathering much personal information about teen visitors. Similar legal and safety concerns caused Fitzgerald to drop a chat room she had offered as an ancillary service on her shopping site. "I didn't want to be at risk from some pedophile lawsuit," she says. "And I realized no matter how hard we tried, we couldn't keep them safe enough."

What's in Store?
The market for online selling was probably never the magic carpet that dotcom retail utopians proclaimed it to be. But as the sector continues to grow and evolve, it's becoming clear that e-tailing is a business where there is plenty of growth available for sellers who know their markets. Knowledge of those markets is probably growing even faster than the markets themselves, and--in what may be the most encouraging sign--online retailers are beginning to get a firm handle on the opportunity that lies before them and what it will take to make the most of it.

Fitzgerald could be speaking for all online retailers when she says of her teenage customers: "They are promising and they are problematic and they are fickle. But if you give them what they are looking for and what they're interested in, they can grow with us."

Just Your Type
Marketers have analyzed customers and markets in terms of gender, age, ethnicity and other characteristics for decades. But demographics aren't the only tools for slicing up an online market. San Diego market research firm Miller-Williams Inc. splits online buyers into five categories: sensibles, agonizers, hagglers, loaners and techies.

Sensibles, at 37 percent, are the most numerous of all online shoppers, the easiest to satisfy and probably the best customers, says Amy Ferraro, director of research. Agonizers, representing 10 percent, do lots of comparison shopping, but aren't as price-oriented as hagglers, who make up 34 percent. Loaners, representing 15 percent, emphasize ease of use in their shopping experience. About 5 percent of online shoppers are Web-savvy but fickle techies.

The takeaway of this segmentation is that you need to know who your customers are and make sure you aren't offering something they don't want or need. "If you know your buyers are hagglers," reasons Ferraro, "you know you need to target them with coupons."


Austin, Texas, writer Mark Henricks has covered business and technology for leading publications since 1981.

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This article was originally published in the February 2003 print edition of Entrepreneur with the headline: Net Meeting.

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