Tapping Into The Under-21 Demo With Virtual Piggy Mobile Wallet


We first heard of Virtual Piggy last October when La Jolla Group partnered with themand have since been receiving an increasing barrage of feedback from shops and brands such as Arbor, Spyder Surf, and Active, as they’ve gone down the aisle with this service that allows young kids, specifically those under 21, to shop online in real time using an account similar to parentally-controlled banking software.

We caught up with Dr. Jo Webber, founder and CEO of Virtual Piggy, and Director of Sales Brenton Reger to learn more about how Virtual Piggy is helping brands and retailers tap into this lucrative market that’s tailor made for action sports.

Tell us a little about where this idea came from and your background?

 JW: I’ve spent my career in the software industry and served as the CEO of InnaPhase and led the sale of this company to Thermo Fisher (NYSE:TMO) in 2004. Then I led Energy Solutions International and  the sale of that company to Oaktree in 2010. As I started to have kids myself, I noticed how much things had changed since I grew up. The Internet is a constant part of this generation’s life and yet there is no safe mechanism for them to purchase items and manage their spending online. I felt this was a much needed innovation. Virtual Piggy was created to provide a safe way for kids to shop online with parental approval, in recognition of growing digital world kids live in. Virtual Piggy handles all aspects of financial literacy from spending, saving, and giving, and facilitates the conversation between a parent and child about money management. We call it "Youth Empowered. Parent Approved."

Explain how Virtual Piggy works. 

BR: Virtual Piggy enables the under 21 demographic to make online purchases in a safe, parent-approved, and COPPA compliant way.  The parents set up a Virtual Piggy account, give their kids an allowance, and kids can go online to approved merchants, fill up their carts and actually purchase goods themselves. The software teaches financial responsibility (budgeting, saving, charitable donations) to the kids, gives transparency to parents on what their kids are buying or saving for, and helps merchants gain incremental sales in an otherwise closed demographic.



Why is this a good fit for the Action Sports industry? 

BR: It's no secret that kids/teens are online and have a high participation in actions sports, and if not, they still want to purchase and wear the cool Action Sports brands.  They see their older siblings and parents wearing the brands, and while the styles they end up wearing are different, the brands are the same.  Not everyone lives in Hermosa Beach and can walk down to Spyder Surf and pick up the new Hurley Phantom Boardshorts, but every teen can load up their cart online and now for the first time they have the ability to pay instead of abandon the cart.  With Ecommerce and mobile gaining a bigger piece of the pie each year most savvy merchants are putting a real focus on growing that arm of the business.

Here’s a look at how Virtual Piggy works:

How does it differ than a gift card? 

BR: Virtual Piggy is a mobile wallet for kids.  Parents, grandparents, aunts, and uncles can purchase gift cards for kids and the kids can then manage the cards on the Virtual Piggy website.  This is a much more efficient system.  Over 75% of under 18’s in North America carry a smartphone[JG1] [JW2] .  If a grandparent sends, for example, a $50 Footlocker card from shop.virtualpiggy.com to one of their grandchildren the grandchild can then go to Footlocker, either online or in store, and pay using the gift card on their Virtual Piggy app.

On Virtual Piggy, the kids and teens can actually transact online with real money and have the items shipped to their parent's address.  The parents have complete control over how much is spent and where. The transparency is a huge plus for the parents as they can see everything, which ultimately helps stifle friendly fraud (kids buying things without permission).

How can retailers get involved?  

BR: They can email me at brenton@virtualpiggy.com or go to our website  and get things started.  We've developed a super simple integration system that works on most major ecommerce platforms and we can typically be up and running in a week or two depending on the system.  Most retailers and brands are marketing to their current databases and finding success in getting incremental sales from the under 21's.

Dr. Jo Webber

Dr. Jo Webber

Tell us about the virtual wish list.

BR: Our Piggy Pin is a very exciting component to our business model.  For the kids and teens they can add anything they want while parents, aunts, uncles, and family friends can see their Wishlist and purchase the items for them much like a bridal registry.  For the retailers it's an opportunity to showcase/sponsor Wishlist items, create brand pages, and know what is hot before purchases are made.

In addition to Active, what other action sports retailers are on board and how many retailers are on board in total?  

BR:  We have over 100 merchants on board in many verticals including Action Sports, toys, fashion, gaming, and food.  Basically anywhere the under 21's are shopping.  In particular for Action Sports we have O'Neill, Metal Mulisha, Active Ride Shop, Arbor Collective, Rusty, Spyder Surf, Goldcoast Longboards, etc...with dozens on the horizon.  We also have a cool gift card program with Footlocker, Zappos, Bass Pro, Barnes and Noble and many, many more.  It's typically an easy sell in action sports as the merchants want access to this previously closed demographic that now has purchasing power.  Another big part of Virtual Piggy is on the charity side.  Previously if kids wanted to give money to charity they had to get mom or dad to write a check or make an online donation with a credit card.  Now it's as easy as signing in with a username and password.  We are just starting to build our charity partners list as it's a growing focus of our business model. In particular, the ASPCA is a large animal rescue effort that we are happy to have available now for children to donate with.

What is the cost for retailers?  

BR: Currently under our Charter Merchant program it is free to integrate and we charge a very small transaction fee.  Since this is typically new business by new consumers the transaction fee is negligible.  Our new fee structure rolls out at the end of Q1.

What kind of traffic are retailers seeing from Virtual Piggy?  

BR: It's still the early days but we are gathering tons of data on a daily basis. In a short while we'll be able to see how 100 million kids- under 21- are spending $50 billion plus online.

How many consumer accounts do you currently have?  

BR: We are not publicly announcing numbers yet, but I will say we are aggressively on the road to 1,000,000 plus by the end of the year.