Commentary

Amazon Revolutionizes Teen Allowances

In a world gone digital, one thing seemed a safe bet to remain analog: the allowances that teens get from their parents for doing chores, getting good grades or as their weekly “walking-around money.” However, thanks to Amazon, even these cash payments are poised to move online.

According to the Wall Street Journal (“Amazon Turns Allowance Into App”), Amazon has launched a new program that allows parents to set up, fund and manage shopping accounts for their teens. Parents link a payment method to the accounts, and can then invite up to four teens to create unique log-ins and download the Amazon shopping app to their devices.

Parents have different levels of control over these accounts; with some of the security settings, they can maintain control over how much their teens spend, and what they buy. When these controls are selected, parents receive a request for approval when their teens place an order, with an optional, personalized message. 

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The program is intended for teens 13-17, but parents decide who receives the log-ins, and Amazon doesn’t check the age of the people using them, so parents can also provide them to younger children, college students, or grandparents who need help managing their affairs.

Amazon’s new service has three significant implications for teen marketers:

* It moves another “IRL” activity online. It takes a physical good that’s endured for centuries, and makes it virtual. Just as we can hire a dog walker, order a pizza or hail a cab via our phones, now parents can pay and kids can receive an allowance the same way. This should inspire other brands to get creative in what other activities they can move online, or manage better online. What about systems for verifying good grades and completed homework and chores? Or for managing kids’ schedules and carpooling? Or the college application and financial aid process? All of these are ripe for digital disruption, and are great opportunities for brands. 

* It alleviates friction between parents and teens. Parents no longer have to worry about getting cash, running out of money, not knowing if the allowance will be spent on school supplies or beer, or seeing their kid buy a $50 product when a $5 one would suffice. Teens get virtual currency that they can spend on almost anything, tools to better manage it, and a system that can provide them with progressively more freedom in how they spend it. This should inspire brands in any category that require “negotiation” between parents and teens to provide the tools to ease this negotiation. Imagine Honda offering an app for its cars where parents could set limits on mileage, distance, hours and speed the car is driven, and gradually ease the limits as their teens earn their trust.

* It brings consumers into the Amazon ecosystem sooner. It makes Amazon the go-to place for teen shopping, even before teens are able to support themselves, or buy for their household. Then, when they go off to college, get their first apartment, and buy their first home, they’ll already be in the habit of going to Amazon when it comes time to make a big-ticket purchase. It should inspire other brands to be creative on how they can reach their target customers long before they’re ready to make a first purchase. To go with the auto example above, imagine a Honda app for teens that lets them design their dream car, save up a down payment, and coaches them on everything they need to do to get a license and be ready to drive, to encourage them to make a Honda their first car.

After changing so much in our daily lives, Amazon has now disrupted our kids’ allowances. How will your brand think creatively to use technology to reach your teen customers?

1 comment about "Amazon Revolutionizes Teen Allowances".
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  1. Paula Lynn from Who Else Unlimited, November 9, 2017 at 2:50 p.m.

    The dumbing down of financial knowledge and it is irresponsible. It is the parents' job to get the cash and teach their children about debits and credits, how the family budget works, how to save pennies, stay out of debt, investment and so forth. Once you have a car, what about insurance and maintenance ? How many parents know the aforementioned as in know how to do it not that it exists ? How about sponsoring mandatory financial courses K-12 ? How do you think many things would change after just one generation armed with this knowledge ?

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