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Compete, Inc. Finds Young Wireless Consumers Are Avid Comparison Shoppers with Distinct Buying Preferences
Discriminating Youths With Different Needs Than Adults Require Tailored Offerings
Boston, MA - May 19, 2003 -- Online consumers under 18 (youth prospects) who shop for wireless plans were 44 percent more likely to evaluate competitive offerings than the general wireless consumer, according to a new study from Compete, Inc. Compete found that in January 2003 youths considered three of the big six wireless providers (Big Six) on average – AT&T Wireless, Cingular, Nextel, SprintPCS, T-Mobile, or Verizon – prior to making a purchase decision. Additionally, youths were 36 to 43 percent more likely than all prospects to evaluate data features and accessories as part of their decision-making process. This new study suggests that today's savvy young consumers require a targeted marketing approach and differentiated product offerings, tailored for them.
"Approximately 10 percent, or about 1 million, of all online consumers who evaluate wireless providers each month are people under 18," said Amit Basak, Compete's Director of Product Marketing. "These young consumers represent a very attractive growth opportunity for the Big Six, since less than 25 percent of this segment currently have a wireless plan and since Compete has proven that online interest in wireless options is a predictive indicator of total demand and purchase intent."
Compete's findings on comparison shopping among youth prospects showed that:
- Interest in prepaid offerings from non-Big Six providers has surged. In February 2003, 27 percent of AT&T Wireless's youth prospects evaluated prepaid offerings by TracFone, FreeUp, VirginMobile and Boost Mobile.
- Youth prospects are attracted to two wireless providers in particular: T-Mobile and Cingular. T-Mobile's branding activities and Cingular's promotions have attracted a disproportionately high percentage of youth prospects as a share of their overall prospects, about 30 percent and 20 percent respectively.
In addition to providing insights into the deliberate approach of youth prospects selecting a wireless provider, the new study from Compete analyzed the decision-making criteria of these discriminating consumers and found that they have distinct buying preferences:
- Youth prospects gravitate to data features, including text messaging, ring tones and games. In February 2003, youths evaluated these data features at far greater rates than overall prospects: 67 percent more at AT&T Wireless; 78 percent at Sprint PCS; and 80 percent at Verizon.
- Accessories are also important buying considerations for youths, particularly at Verizon and T-Mobile. Youths were 36 percent more likely than overall prospects to evaluate accessories as part of their decision-making process (See Table 1 below).
Table 1: Young Wireless Consumers have Distinct Buying Preferences
(Percent more/less likely to evaluate options than all prospects)
| Youths vs. All Prospects | |
| Data & Features Accessories Text Messaging (active) Phones Service Plans Promos/bundling Help Center Store Locator | 43% 36% 24% 4% 2% -7% -13% -25% |
| Source: Compete Study, May 2003 | |
Compete's analysis demonstrates differences in the consideration process and preferences of young consumers versus adults. "Wireless carriers must think carefully about what they want to offer youth prospects because consumers in this segment are more active comparison shoppers than adults," added Basak. "Carriers should develop tailored marketing programs and product offerings for youths and can look to other industries, such as consumer banking, for successful examples of differentiated programs for young consumers."