As Gen Z and Millennials increasingly research and purchase products through social media as well through live and virtual shopping, gaming, and automated reality platforms, social shopping is set to outpace e-commerce, putting pressure on brands that face a collapsing consumer purchasing journey. How consumers are behaving and the implications for brands, social media platforms, and retail media outlets are the subject of The Rise of Social Shopping, released by Horizon Media today.
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The findings from the WHY Group, Horizon Media’s intelligence center of excellence, and Night Market, Horizon’s commerce affiliate, demonstrate that social shopping is quickly replacing ecommerce. The results show that one in four people today are scrolling to shop. Among social shoppers, 80% say they make a purchase twice a month and 73% expect to purchase at least once a month in the upcoming year, with Millennials most likely to be frequent shoppers. Those not currently shopping on social are open and ready: 75% of Gen Z, 76% of Millennials and 61% of Gen X feel comfortable purchasing on social media. Marketers need to tap into these platforms to connect with customers where they are to drive additional revenue.
Beyond the Gen Z adopters, Millennials and Gen X are also quickly shifting online buying habits to social platforms including TikTok, Pinterest, Snapchat, Facebook, and Instagram. In addition to live shopping, gaming platforms such as Twitch and Roblox now connect brands to buyers.
More than half of products purchased through these platforms are brand name and purchases span categories – more than 40% include Apparel, Beauty, Electronics, and Personal Care. Impulse buys are big, including trending and seasonal products.
The market opportunity is large: Social commerce revenue is projected to reach $6.2 trillion globally by 2030 (Statista). Instagram, Facebook, YouTube and Tik Tok have already integrated shopping into their user experience and more brands are jumping in to generate revenue. More than 72% of social shoppers say they could replace at least some of their online shopping with social shopping.
However, the biggest hurdle to more widespread acceptance is scammers and the trustworthiness of online shopping. Brand verification is key and a large opportunity to generate sales. Marketers need to invest and promote safety in their brands. Once this happens, they will capture more market share.
“We are witnessing one of the most radical shifts in behavior we’ve seen since the adoption of ecommerce,” said George Musli, Chief Business Officer, Night Market. “Social shopping promises a dynamic, personalized experience that can shorten the marketing funnel and blur the boundaries between online and offline retail. Marketers need to capitalize on the platforms poised for growth. Today gaming experiences are already making an impact, especially among Millennials. Brands that jump in will be in a prime position to grow when uptake expands.”
The Rise of Social Shopping report includes the following key findings:
Social Shopping in Tik Tok, and Beyond
- Despite reports that the introduction of Tik Tok Shop would spell the app’s demise, people disagree
- Just 12% of social shoppers agree that social shopping on places like Tik Tok is making social media less fun, a figure matched by 13% of non-social shoppers
- Beyond Tik Tok, there is significant opportunity across Meta properties and YouTube, especially with older cohorts
- Facebook is not only one of the most used platforms but also the most trusted for social and non-social shoppers alike
- Marketers can take advantage of introducing new products and promotions by targeting the more than 4 in 10 non-social shoppers that already see social media as a place to gather inspiration or research
Live streaming and virtual shopping are new commerce channels
- Live shopping and virtual shopping are gaining traction, adding new dimensions to the experience
- This shift in shopping behavior goes beyond Gen Z, with Millennials and even Gen X embracing new ways to purchase through social media, gaming experiences, AR, and VR
- Among social shoppers 58% of Millennials have purchase form a livestream and would again, 56% of Gen X are open to trying. This extends to virtual shopping with 48% of Millennials planning to do this again, and 40% of Gen X open. These new avenues can bring incremental sales for marketers promoting their brands in new ways
Social Shopping Excels with Relational Buyers
- Shoppers see social commerce as a way to support small businesses, foster community, and promote social good, while social shoppers further associate it with endorsements and personalized recommendations
- Social shopping excels in creating connections in a way that traditional online shopping does not
- Users are looking for inspiration (55% of the population, 60% of Gen Z). Marketers can help them discover a brand or product they didn’t even know they needed
Timing is Key for Purchases
- Impulse buys are big including trending and seasonal products
- Brands can encourage immediate buying with reminders to purchase and exclusive offers
- Influencer partnerships, trending hashtags and seasonal products can also be instrumental in generating hype for products and services
- Marketers can evaluate the content users are browsing and what products they are considering to purchase, and serve an ad that leads to a verified brand page (and contains some other enticements like free shipping) to drive sales
“Social shopping is now officially a part of the online ecosystem, tapping into community in a way that online does not,” Pam Wake, VP, Why Group. “Social offers a rich environment for brands to foster connections, build loyalty and consequently create unique shopping experiences that blur the boundaries between commerce and community. Marketers can tap into existing fandoms, subcultures and niche communities that are drawn together by shared values, norms, behaviors and identity makers.”
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For more findings, as well as recommendations for how brands can translate these insights into action and engagement, access the full report at The Rise of Social Shopping.
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source – prnewswire