InformationWeek
Defining The Business Value Of Technology
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February 12, 2001 |
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Redefining Business:
Kids These Days
Tech-smart but fickle teens are being taught to expect more from marketing
By Eileen Colkin (ecolkin@cmp.com)
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ans Inc. is so eager to have teen-agers think of the sneaker company as cool that it builds skateboarding parks for them at major shopping malls. When opening its sixth park last April, Vans' CIO Joseph "Jody" Giles decided to try a live Webcast of skaters doing stunts at the park and promote it to loyal customers via E-mail.The goal was to keep building closer relationships with notoriously ad-wary teens. Somewhat to Giles' surprise, not only did people watch--they also bought. "It was nothing more than 'click here to see the grand opening,' and thousands of people clicked through to watch as my IT guys filmed it on a camcorder," Giles says. "We could see them click through, watch the video, and buy shoes."
That success inspired Giles to use the security cameras already in place at company parks to deliver live Web footage so teens can log on to watch their friends or view events such as Vans' amateur skating championship. It's part of the effort to sell to the tech-smart, marketing-wise teen-agers known as Generation Y, so-labeled for their propensity to question everything. "You can't just throw a product in front of their faces," says Giles. "You have to give them something."
Born into the Internet Age, today's teen-agers embrace Internet technology the way Baby Boomers did television. But they're skeptical of marketers and prefer to independently research products once they hear advertising promises. They seek relationships with brands that cater to their changing interests. And they have money. In 1999, U.S. teens spent $125 billion, and, more important, influenced household purchasing decisions worth $200 billion to $500 billion, according to a report from Gartner.
Generation Y's power goes beyond their spending. Napster showed how young people who aren't tied to old business models and values can take control of what's marketed to them and exploit the Internet to change the rules of commerce. "The whole record industry had to change because of what this generation has done," says Forrester Research analyst Michael Anectol. "It was the kids who drove Bertelsmann to partner with Napster so they could get what they want."
While companies such as Vans may be focused on melding skater-dude attitude and Internet technology to sell shoes today, they're also shaping the expectations of tomorrow's adult consumers. When today's teens grow up, they'll expect the same marketing and technology wizardry from the people who try to sell them cars, mortgages, and mutual funds.
Companies such as Sonera Zed U.S. Inc. understand this. The dominant mobile-phone service in Finland's ultra-wired society, Sonera is entering the U.S. market this winter by focusing on 18-to 24-year-olds and making its marketing campaigns heavily dependent on the Internet. "They understand technology, and it's important to get them at that age," chief operating officer Paul Hughes says. "We see them going from student to employee to manager. If they learn to use a computer or Web-enabled cell phone now, they're going to use it for life."
Vans has been marketing to teen-agers since it was founded in 1966; it reached national fame as the shoe of choice of burned-out surfer-dude Jeff Spicoli in the 1982 film Fast Times At Ridgemont High. Today's customer is different, however, and Giles knows that if Vans wants to build a successful relationship with its market, it needs to cater to its customers' search for individuality while still being associated with an acceptable brand.
Using E-mail distribution service from @once, Giles sends his most loyal or promising customers messages offering limited-edition sneakers. Most recently, the company produced the Compel shoe for young women, a rapidly growing market for Vans. The shoe changes color when exposed to the sun's ultraviolet rays, something Giles thought could be demonstrated better online than in Vans' indoor retail stores. An E-mail included a 3-D, rotating picture of the sneaker changing color and a note promising that the first batch of shoes was being saved for online customers.
Vans.com saw a 20% click-through on the promotion--rates of 2% to 5% are considered successful E-mail marketing. "We've created a very loyal consumer on Vans.com," Giles says. "We'll make a shoe that's available only online and only for a month so that the people who buy it have their own style of shoe."
The notion of being an individual and being accepted has long been fuel for teen angst, but it takes new forms among Generation Y members. Vans aligns itself tightly with sports that are both social and individual, such as BMX biking, skateboarding, snowboarding, and surfing, and that let teens express their attitude toward the world: Look at me, I'm doing this by myself, but I have all my friends cheering me on. Translated into technology: I surf the Web, but I don't live online.
"Kids will say they think advertising is stupid, but at the same time, they love branded content," says Eric Cohen, CEO of Funderstanding, a research organization that monitors teen behavior. "They're so image-conscious that if a brand doesn't represent who they are, they'll dismiss it."
Technology doesn't change the fact that it's tough to figure out what kids like and how they think. Just ask sites such as Kibu.com, which shut down despite a well-funded effort to create a community site for teen-age girls (with the tag line touting it as a site for "Girls Who Got it").
Kids aren't living their lives entirely online despite their embrace of technology. They spend a lot of time in school (unlike the employed who can surf from their desks), and they certainly haven't given up watching TV. A Forrester Research report says that while teens will spend one of every four free hours online, they're big multitaskers--while listening to music on Napster, they're also reading or watching television.
Teens also say that using the Internet stimulates offline behaviors. For example, 21% of teen-agers in the Forrester report say that visiting a newspaper or magazine site inspired them to buy a print subscription, and 26% say that since downloading Napster they've bought more CDs. (Twenty percent say they've bought fewer.)
Record companies may bristle over Napster, but the industry is eagerly experimenting with interactive marketing to reach an audience that thinks in multimedia. Consider a Valentine's Day promotion selling recorded phone calls from members of teen pop group the Backstreet Boys. For $4.95, fans can go online and buy one of six greetings from a band member that's sent to a friend via the telephone. The sender puts his or her own message at the end of the call.
Oh, and The Call just happens to be the Backstreet Boys' latest single, which fans can listen to online. "You're tying everything together," says Richard Hart, VP at Artistdirect, the online music and fan-club network that's selling the phone calls. "You're using the Web site to promote a particular song and giving a personalized call from the artist. It's all part of the marketing package."
Many artists have embraced Internet download sites such as Napster to heighten the anticipation for a new album. For example, the Dave Matthews Band has released the first single from its next album to Napster, though the song isn't available for purchase until Feb. 27.
Teens still flock to the shopping mall, and Simon Property Group Inc., the nation's largest mall developer, is determined to use technology to keep it that way. But Simon also knows how hard it is to get the right tech-nology to connect teens and retailers. Simon Property hired MerchantWired, a network infrastructure company for the retail industry, to develop a program called FastFrog. Teen shoppers at two malls in Atlanta--Mall of Georgia and Gwinnett Place--used wireless devices to scan items they wanted onto a holiday wish list that they could E-mail to family and friends, who could then take a printed list to the store or shop online. Bob Covington, chief technology officer and executive VP of business development for MerchantWired, says that during the pilot the majority of parents brought the list to the store, and FastFrog purchases totaled $2.5 million.
The test took place during the 1999 holiday season, and Covington says the company has spent the past year working out numerous problems. For instance, teens were scanning limited high-fashion items, so when parents went to make a purchase, an item was often out of stock. Shopping online didn't necessarily solve the problem. Because the merchandise coming in and out of brick-and-mortar stores isn't loaded into a database, the Web site didn't reflect what was available on the store shelves. "We needed to close the loop between warehouses and retail stores and the Internet," Covington says.
continue on to page 2
Illustration by Bart Nagel
Photo of Giles by Katrina Dickson
Photo of Hughes by Asia Kepka
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