Amazon.com is seeking to expand its retail supremacy by reaching out to a a new demographic: teenagers.
Its new plans to get more teens to its site even allows them to use their parents’ credit card for purchases and could pave the way for a new generation of customers.
Younger Teens Turned to Customers
Amazon is making a large push towards getting shoppers ages 13 to 17 to its site, as long as they have approval from their parents. With the new program, teens can create their own Amazon login linked to their parents’ account to make purchases, stream videos, and enjoy other benefits from their parents’ Prime membership. Parents can approve those purchases via text message or email before the transaction is finalised or set limits on how much their child can spend per order. Parents will receive itemised notifications of each order and can cancel or return items using Amazon’s existing return policy.
“As a parent of a teen, I know how they crave independence, but at the same time that has to be balanced with the convenience and trust that parents need,” said Michael Carr, vice president of Amazon Households. “We’ve listened to families and have built a great experience for both teens and parents.”
Amazon also announced that it will soon offer Prime memberships to college students for $5.49 a month. The annual price of $49 for students, compared to $99 for everyone else, will stay the same.
Economic Impact on Amazon Sales
Amazon’s move to market to teens comes as many mall staples like Wet Seal, rue21, and Aeropostale file for bankruptcy and close a large number of their brick-and-mortar stores. Many teen retailers, including Claire’s and Abercrombie and Fitch, are on their last legs as more teens are purchasing online. Amazon hopes to rake in huge profits from other stores’ demise and take advantage of the buying trends of the younger generation.
Amazon accounts for roughly one-third of all U.S. online sales. Teenagers tend to be very comfortable buying things online, and experts say that capitalising on that will not only lead to more profits for Amazon now but also in the future as it cultivates future Prime members.
It might not have that much work to do. Nearly half of all teens already list Amazon as their favourite website—a 9% increase from last year. Technically, customers need to be 18 to place orders on Amazon, but age isn’t asked at registration or enforced by the company.
However, Amazon has run into trouble in the past with purchases made by minors. The Federal Trade Commission sued Amazon in 2014, saying the company made it too easy for kids to make small purchases without their parents’ permission, especially on games downloaded from Amazon’s Appstore. The resolution happened in 2016 when Amazon released more than $70 million in refunds for unauthorised purchases. The new system of having parents approve transactions should put the company firmly within online regulations.
The move could be great for Amazon and make online shopping more convenient for teens, but child development experts are concerned about teen’s safety, especially as Amazon gathers more data on its young shopper’s demographics, browsing history, and purchasing habits. There are also concerns about the impact it will have on children to have such easy access to their parent’s credit cards.
“We’re essentially telling our children they can get whatever they want, whenever they want it,” said Betsy Brown Braun, a child development and behaviour specialist. “This could create a whole new set of problems.”
However, Amazon says it is empowering parents to have conversations about appropriate spending with their children and that it won’t make the actual credit card number available to minors.
Amazon’s new youth movement could be great for Amazon stocks, and it definitely follows recent buying trends. If things go smoothly, Amazon could be courting customers that will stick for a lifetime.