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Please note: The reports in this section are not product reviews or tests; they're meant to spotlight options for you to consider, as well as milestones in children's online-safety technology development. Comments from readers on their own experiences with these products and services are most welcome - and, with your permission, we publish them. Do email us your own product reviews anytime!
From our overview of marketers' messages at the June '99 Digital Kids conference in San Francisco...
How marketers are thinking about e-commerce and kids (June 25, '99 issue)
"E-commerce" is quite the buzzword these days. The reason why we're hearing so much about online shopping is that the Internet industry recently had an epiphany. After several years of trying to figure out how actually to make money in this medium (banner advertising wasn't going to cut it for most Web sites), the light bulb went on this year, when companies decided that online retail, or direct sales, was going to be the main revenue source. Two different studies put global e-commerce revenue at more than $1 trillion by 2002.
Even "content providers" like TV and newspaper Web sites were going to have to sell stuff. CBS Sportsline, once an information provider, is selling sporting goods, USAToday flowers and candy, Discovery videos and CD-ROMs.
An example in the kids space is Nickelodeon's recent purchase of kids e-retailer Red Rocket. Nick hasn't yet figured out how it's going to blend kids programming and online retail - buying Red Rocket and putting its banner ads in the Nick site are only first steps. We'll keep an eye on that for you.
That brings us to how e-commerce for kids is taking shape. We all have concerns. We're no more interested in giving our children free, unlimited use of our credit cards on the Internet than at a shopping mall! And we wonder if our kids will be able to distinguish between content and sales pitch. In fact, the number of parents concerned about online advertising aimed at kids has gone from 18% to 45% just in the past year, according to Internet research group Jupiter Communications.
The good news is, research groups like Jupiter - which hosts Digital Kids and makes most of its money selling strategic and market research to corporations - are advising clients that, for e-commerce to take hold in the children's market, it has to be done responsibly. At the conference in San Francisco two weeks ago, Jupiter offered children's Internet programmers, marketers, and retailers some advice that indicates what responsible e-commerce might mean:
- "Delineate commerce with buffer screens." Nickelodeon is doing that now with ads - click on the banner ad marked "Advertisement" and you'll first go to a page saying, "You're leaving nick.com to go to another Nickelodeon Web site that may have stuff for grownups as well as kids."
- "Teach kids value of money, how to evaluate a purchase, manage finances." See our report below on "Digital wallet sites for kids."
- "Entertain, engage through commerce: chat/auctions, games, downloading music." This is a reference to "adding value," building on widespread agreement in the industry that today's kids expect "value" - more than a sales pitch.
- "Ensure privacy." They're referring to collection of kids' personal information through their joining Web site clubs and registering online, reinforcing FTC insistence that it not be sold to third parties and that there be no data collection from kids under 13 without parental consent.
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Online 'allowance'
Just how will kids shop online? Already the most well-established method, the "digital wallet" is a kind of electronic allowance. It allows kids to shop on their own but keeps parents in control.
Here's how digital wallets generally work: A parent, the credit card holder, signs a child up with his/her credit card number and tells the service how much money the child is allowed to spend. The parents can add whatever amount they want at whatever frequency (say, a weekly allowance). Kids can use this virtual pile of money to shop at e-stores with which the digital-wallet site is affiliated. If the child wants to use her money for other than shopping purposes, these sites often include opportunities to give to charity, deposit to a savings account, or even learn how to invest money (via information on how to open custodial investment accounts or mutual funds). Here are some examples:
Digital wallet sites for kids
iCanBuy - We reviewed this one last month. It targets the broadest age range: "kids and teens" (we couldn't find a reference to specific ages). We're sure its list of retail partners is growing, but at this writing it seems a little limited, eToys being the most well-known. But maybe your kids have heard of: Gotmerch.com, JustBalls!, MXG Online, Graffiti Online, Buycurious, Whutever, and X-Radio. PC Flowers is everywhere, of course (nothing's changed - we still have to give them an allowance to buy us flowers). Unique to this site is a partnership with Security First Network Bank, so parents can help kids open a savings account online.
DoughNET.com - This is the one for teenagers (13-18-year-olds). To us it seems a little less earnest and a little more straightforward than iCanBuy. It also offers a budget feature, so teens can learn that aspect of personal finance. The list of retail partnerships isn't huge here either, but some of the names are more familiar, at least within the Internet industry: CDNow, Barnes & Noble, Delia's, Egghead.com, Alloy Online. This is the site that teaches the basics of investing. Giving to charity is part of both iCanBuy and DoughNET.
RocketCash - Just launched the first of this month, RocketCash targets the more than 20 million teens (with $141 billion in buying power) they expect to be online by the end of this year. This digital-wallet site is pure e-commerce; there's no educational component, no charitable giving, no savings or investing opp. What RocketCash has in common with DoughNET and iCanBuy is the "allowance" part, giving parents control over amount of purchase and choice of retailer. Though they have some retail partners in common with the other two, they seem smart in having signed some big names: J.Crew and Amazon, in addition Delia's, Reel.com, and eToys.
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Hot e-commerce teen sites
If you have a child spending a lot of time at Delia's, we hope she doesn't have your credit card number! But you'd find out soon enough. In addition to this hot little e-store, here are a few other sites targeting teens with a shopping component (whether subtle or in-your-face):
Delias.com - It's really spelled dELiA*s, but it takes us too long to get the upper- and lower-case arrangement right every time! There are five Delia's stores around the country, as well as a handful of outlet and premium-outlet stores, but they're very focused on the Internet - smartly so, given their Generation Y customer base (girls 13-24, they say). Droog is the male counterpart to Delia's (boys 13-24). Delia's is also working on a broader destination (as opposed to pure e-commerce) site called iTurf. Another subsidiary of Delia's, gURL.com, focuses on community.
Alloy Online - This is more an e-zine with a shopping component. "E-zine" increasingly means a destination site that builds on and serves a specific community with multiple services (discussion, information, shopping). Here's how Alloy describes itself: "a leading Web site providing community, content and commerce to Generation Y, the 56 million boys and girls between the ages of 10 and 24." They add that this group, "which is growing 19.5% faster than the overall US population," represents more than $250 billion in annual disposable income. That's even more buying power than RocketCash assumes!
Bolt - The amount of information Bolt offers parents (or anyone else) on its site is as short as its name. It's the same type of complete destination site that Alloy is, with heavy emphasis on community: free e-mail, discussion boards, chat, an instant messaging feature, a buddy list feature, and e-postcards. Ah yes, there's e-commerce, too!
For further reading….
"Teens entering the virtual mall: Startup targets credit card-challenged shoppers with teen buying site" at ZDNet - you may enjoy the comments from readers at the bottom of the story in "Talk Back."
CNN's story on e-commerce for Generation Y
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