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Christmas Gift Guide
Tech Industry

E-tailers scramble to win teen buyers

With the holiday shopping season underway, companies such as Rocketcash, Cybermoola.com and Icanbuy.com are offering ways for kids to shop online, and helping merchants win part of a $141 billion market.

Online merchants want to discover the secrets of youth--at least those secrets that will help them sell more goods to teen-agers.

E-tailers are scrambling to attract the latest generation of teens, a consumer market worth an estimated $141 billion last year. With the holiday shopping season starting in earnest, youth-focused companies such as Rocketcash, Cybermoola.com and Icanbuy.com have begun offering services paving the way for kids to shop online, something they often can't do.

In one example, Mountain View, Calif.-based Rocketcash recently rolled out online "gift certificates." Purchased by adults, the store-valued 16-digit codes can be sent via mail or email; teens can use the certificates to shop at a more than 60 online stores listed on Rocketcash's site, including Amazon, J.Crew and Pacific Sunwear.

Separately, Alloy Online today will announce it is introducing voice chat on its teen-focused Web site. A recent study found the No. 1 thing teens want from the Web is social interaction, and the No 1. device desired is Internet telephony.

Such targeted programs may be key in tapping a promising group. According to Forrester Research, about 12.4 million Internet users are between the ages of 16 and 22 years. About 40 percent of that group will spend $1.5 billion online next year, but another 14 percent can't shop online because they lack access to a credit card--a significant problem considering the majority of online sales are completed via credit.

The law prohibits teens from owning credit cards, and most of the money they spend is their parents' anyway, according to Rocketcash chief executive Jeffrey Mason, whose company offers financial services that enable teen-agers to shop online.

"There is a pent-up demand," Mason said. "We're all reading about this online shopping spree that's booming but the teens just aren't participating."

The money in a teen's Rocketcash account can only be spent at the merchants approved by his or her parents, according to Mason. To provide security, Rocketcash has partnered with Chase Manhattan Bank to secure and fulfill the transactions. The personal information of teens and parents alike is withheld from merchants, he said.

Icanbuy works much the same way, with parents using their credit cards to deposit money into an account they set up for their teen-agers. Cybermoola is an online debit card that allows teens to shop wherever the company's card is accepted.

Some brick-and-mortar stores are also looking to use the Internet to help teen-agers make purchases. Simon Property, which operates malls across the country, is experimenting with allowing teen-agers to buy goods in offline stores and bill charges to the parent's online account.

Other companies have tried using online "wishlists," which work much like traditional bridal registries. A teen-ager sets up a list at a retail site that a relative can check to learn what the teen-ager would like as a gift.

According to Mason, such wishlists are ineffective.

"Teen-agers change their mind, the lists become outdated," he said. "What teen-agers want is to have the freedom to buy without a parent looking over their shoulder. To get teens to buy online, we have to provide them a way to do that."

Ekaterina Walsh, a research analyst with Forrester, said that teen-agers are very similar to adults. They are more likely to choose sites that offer convenience and a good price over sites that try to pander to them. Companies which blast loud music or decorate their sites with wild colors are wrong to think that's what teen shoppers are looking for, she said.

"You go to Levi's site and there is music and shoppers can win a guitar signed by [rock singer] Sugar Ray," Walsh said. "But teen-agers will go to a music site when they want music. Online merchants shouldn't waste their money [on gimmicks]. Just provide them with quality goods, discounts, selection and the convenience that they are looking for."