Teen Online Spending Dips
By Anna Johnson on July 3rd, 2008A June 2008 study by OTX and The Intelligence Group indicates that around 60 percent of U.S. teenagers aged between 13 and 17 years regularly buy online. They spend $46 per month on average, with more than a quarter of teens spending $50 or more per month.
Clothes, shoes and accessories are the most popular type of purchase (46 percent), followed by music (41 percent), books (30 percent), electronics (27 percent) and DVDs (20 percent).
Piper Jaffray’s April 2008 “Teen Spending Survey” indicates that annual online spending by teens has dropped by around 15 percent for females and 11 percent for males. According to eMarketer this is likely to be due to the downturn in the U.S. economy.
Here at Kikabink, we are involved in one niche that is dominated by teen consumers. To be honest, we pretty much fumbled our way forward since we launched our product – an educational course – a couple of years ago.
For example, our original price point was $37. Given that the product is NOT one of the popular purchase choices (as indicated above) – and the average online spend among teens is $47 per month – I suspect this price point was way too high and a major reason why sales were so slow to begin with. When we subsequently slashed the price to $7 as a relaunch offer price, and then to $14 as the regular price, sales shot up. Whether $7 as the standard price works even better than $14 is something we need to test.
What is obvious is that despite the practical barriers to teens in terms of buying online (e.g. access to credit cards and/or PayPal) they are active online consumers. And while it may appear that they are generally more price sensitive than other age groups, this probably depends to a greater extent on the niche in question.
Source: eMarketer, “Teens Buying Online but Spending Less”, eMarketer, July 2, 2008
