E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
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Like Delia’s, sites popular with teens commonly offer links to special-interest chat rooms, free e-mail accounts, and news about favorite celebrities. These multi-functional sites act more like magazines than catalogs and provide a sense of community for teens, particularly those who don’t live in metropolitan areas. Call it the Urban Decay effect. The hot cosmetic brand, which features lipstick and nail polish in colors like Gash and Roach, can only be found in select department stores. For teens living in small towns, the Internet is often the only way to get access to these brands.
MXG, which partners with the hip brick-and-mortar retailer Urban Outfitters, wants to set the standard by providing a cross-media triple threat: The formula includes a bimonthly newsstand magazine, catalogs, a Web site where girls can shop and chat, and MXG-TV, an online video and television production division that creates five-minute videos of clothes available for purchase.
MXG’s various channels blur the lines separating one medium from another, mainly because that’s what it takes to succeed with Gen Y. “These girls are going to revolutionize these industries,” says Gilbreath.
In some respects, they already are. Actress Jennifer Aniston of TV’s Friends has signed on to help promote Voxxy.com, a site for teen girls launching this spring. Aniston’s agreement with Voxxy calls for 13 half-hour programs in which she’ll interact with girls on topics “entertaining as well as empowering,” according to a company press release.
Already teen buyers have given a boost to sellers of stored-value cards. Credit cards, which account for 99% of Internet purchases, remain out of reach for many teens. Enter alternatives such as RocketCash, Icanbuy and DoughNet, which allow teens without credit cards to buy online.
Carolyn, who uses RocketCash, says her parents pay her allowance into a RocketCash account, which she uses to shop at CDnow, Delia’s and other favorite Web merchants. “We are answering a true need,” says Carol Kruse, vice president of marketing at RocketCash. Parents can stay in control with RocketCash, she adds, because the service also limits what kids can see and buy online, which gives them a measure of protection.
Still, Gen Y hasn’t abandoned shopping malls, which remain important social focal points for teens. But many kids, like adults, lead busy lives and don’t always have time to cruise the local galleria-hence the attraction to online shopping, says Kruse: “Kids shop online for the same reason adults do.” •
The next best thing to credit
Stored-value cards are succeeding because they solve two problems at once, says Carol Kruse, vice president of marketing at RocketCash. They give teens a way to pay for their goods and parents a way to supervise what teens buy. “Parents like that it limits what the kids can buy and view,” says Kruse. “Most parents don’t want to hand over their credit cards to their kids.”
- Icanbuy.com-allows teens to open accounts using parent’s credit cards or by mailing a check or money order to spend at various online stores or to make donations to selected charities. Merchants include 999central, CDnow, Designeroutlet.com. Parents also can purchase e-gift certificates to give to their teens.
- RocketCash.com-lets teens shop online with a stored-value account. Featured merchants: Amazon, Delia’s and CDnow, and teen cosmetics favorite Urban Decay.
- DoughNet.com-bills itself as the only site where kids can shop, bank and donate money online. Offers joint banking accounts for parents and kids. Merchants include MXGonline and Eonline.
- Cybermoola.com-offers a prepaid Internet shopping card. Features CD, movie and gaming sites. Also provides community message boards for kids to chat.
- SpendCash.com-offers a variety of online stores besides the requisite video and music sites, including ArtistDirect.com, Graffeti.com and BuyMP3.com. One of the few sites that isn’t marketed exclusively to kids, SpendCash dispenses with the teen-oriented graphics in favor of a clean, well-organized design.