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"American teenagers usually have more discretionary spending than their parents and are expected to spend USD1.2 billon on-line by 2002," said Ivan Walsh, general manager of Irish Internet research company Klariti.com, and the author of the report. "This is a staggering figure and demonstrates the spending power that teens have."
Walsh commented that huge opportunities exist for Internet ventures to tap into that spending power and gain a valuable customer base. "US companies such as Proctor & Gamble have already started targeting the teenage dollar and European companies will have to follow suit," said Walsh.
The report found that the top five purchases made by teens on-line, based on sales volume, are CDs/cassette tapes, clothing, books, computer software, and toys.
Of course, the biggest barrier to teenagers buying on-line is the lack of their own credit cards. According to a study highlighted in the report, 78 percent of teen purchases on-line were paid for with parents' credit cards.
Although Walsh said this was a major difficultly for teenagers, he pointed out that it is being addressed by some credit card companies. "The likes of Visa and American Express are introducing pre-paid cards for teenagers that allow parents to a set an amount that can be credited to them." However, as Walsh noted, such initiatives have yet to be introduced in Europe.
According to Walsh, another barrier for teenagers who want to buy on-line is the high cost of Internet access. "In Ireland, for instance, it is very expensive for teenagers to stay on-line for any length of time. So, for example, playing PlayStation games on-line will be introduced on a drip-feed basis."
As most teenagers cannot buy on-line, they use it a research tool instead. According to a Forrester report quoted in the study, nearly 75 percent of teenage Internet users buy and/or research products on-line. "For teenagers, the Internet has now become an indispensable part of researching products/merchants and suppliers," said Walsh.
Walsh also found that Internet-savvy teenagers don't fit the cliche of being friendless geeks and nerds. "Contrary to the popular image, teenagers who use the Internet are much more sociable than their counterparts who don't. In fact, one of the main reasons they use the Net is to communicate with other teenagers and friends."
The report, "Generation Y Teens and the Internet" can be found at www.klariti.com.
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