Retail Trends You Can’t Miss: Social Shopping and Live Shopping
*All statistical data below via GWIThe shopping experience has changed drastically in the last few years, especially for younger generations. They approach brand and product research differently than their parents, so brands need to recognize that the consumer journey looks different than it used to.
The biggest shake-up - social media offers a place for the journey to take place from start to finish, and younger consumers are big fans of social shopping or social commerce, discovering more brands in these environments than ever before.
Why are younger consumers shopping on social media?
Before delving into the evolving trends primarily among Gen Z and Millennials in the realm of social commerce, it’s essential to understand the motivations driving this shift.
In the digital landscape, social platforms have eclipsed search for both these two key cohorts to discover brands and products. Statistics reveal that 41% of Aussie Gen Z and 39% Millennials now find brands through social media, surpassing the 30% Gen Z’ers and 38% of Millennials who use and are influenced by search engines for the same purpose.
When we look further into the why, we see that younger audiences start their research from a place of curiosity. Globally, the pursuit of inspiration has surged from the ninth reason for internet use in 2018 to the sixth reason in 2022. Notably, there has been an 8% decrease in the number of consumers who conduct research before making a purchase decision demonstrating inspiration on social media is driving purchases prior to a user actively searching for it online. #TikTokmademebuyit - one of the most heavily used hashtags on TikTok is a strong representation of this.
This evolution of e-commerce is marked by the ever evolving capabilities of social platforms. Instagram, for instance, has enhanced the search and discovery process by combing through keywords present in captions, accounts, locations, and even your past engagement history with content and profiles. Meanwhile, TikTok is experimenting with a feature that can detect keywords within comments, adding an extra layer of search functionality. This redefined approach to searching on social media has rendered the process more dynamic and all-encompassing than ever before.
The advantage of this is an enhanced approach to social media targeting, offering advertisers a more dynamic and comprehensive means of reaching their target demographics, with the potential for increased engagement and conversion rates by serving highly targeted ads leveraging more data available across the apps. These capabilities empower advertisers to tap into the ever-evolving behaviors and preferences of younger consumers, thus optimising their strategies for more effective and lucrative outcomes.
This combined with the trust these younger generations have with the platforms and UGC content, as well as a lesser reliance on written reviews which they feel lack transparency, is a key driver behind the growth in social shopping. Gen Z’ers and Millennials then feel increasingly confident buying a product when they can see it via a video post or live stream, or observe a content creator using or reviewing it.
How impulse shopping factors into social shopping
The ease of social shopping, and the fact that it takes place on an app that younger generations are already spending a lot of time on, leads to the increase of impulse buying. It may be a surprise in this economy, but impulse buying is on the rise.
41% of global Gen Z & Millennials make an impulse purchase every 2-3 weeks, rising to 48% among daily TikTok users. So what drives this behaviour?
43% of Gen Z/46% of Millennials make impulse purchases in order to take advantage of a sale or deal.
37% of Gen Z/39% of Millenials say it’s because it’s fun to buy/discover new things.
39% of Gen Z/38% of Millenials say it’s to treat themselves.
36% of Gen Z/37% Millennials say they didn’t want to miss out (limited time offer).
37% of Gen Z say it’s due to a quick and easy check out process.
21% of Gen Z/Millennials say it’s due to a social “buy” button.
We see three trends here:
Convenience: Buy buttons and fast and easy checkouts spur impulse buying.
Inspirational shopping: Having a fun and inspirational shopping experience whilst treating themselves results in this type of buying.
Urgency: Limited time offers, including live shopping (see below) encourage shoppers to hit that buy button.
Dynamic, quick and inspirational shopping are keys to impulse buying.
How are they shopping on social media?
So now the big question - how are these younger generations spending their money on social media?
In-app Shops
The advent of in-app shopping on platforms such as Instagram, TikTok, YouTube and Snapchat offers a range of benefits that both enhance the user experience and also significantly boost in-app sales, lifting conversion rates. These apps seamlessly integrate shopping “stores” into the user experience, enabling businesses to merge the brand presence with dynamic shopping features. Through these integrated stores, users can effortlessly transition from browsing to making a purchase with a single tap, all without exiting the app. The inclusion of in-app checkout functionality adds to the seamless nature of the process, streamlining the entire journey from product discovery to final purchase.
This convergence of features enables e-comm businesses to leverage influencer tutorials and UGC to swiftly convert engagement into a sale in one frictionless journey. This direct pathway from discovery to purchase simplifies the potential for turning user interest into tangible revenue whilst improving the capability for measurement and attribution.
The statistics which underscore the significance of in-app shopping in APAC, are reflected with 30% of Meta users having actively engaged with features such as Facebook Marketplace and Instagram Shopping in the past month alone. This not only highlights the growing popularity of in-app shopping but also the substantial opportunities it presents for brands to tap into a highly receptive and engaged consumer base.
Live Shopping
Live shopping is gaining significant momentum, particularly in the APAC region, outpacing its adoption in other markets. Globally 1 in 4 say they have watched live streams in the last week and 5 out of 10 of the top live stream markets are in APAC.
This trend finds a particularly engaged audience base, driven by segments such as gamers (comprising 33% of top users) and Esports enthusiasts (making up 44% of viewership). Live stream viewers exhibit a strong inclination towards purchasing premium versions of products with a 43% higher likelihood to do so. Moreover, they are 42% more likely to make purchases to access exclusive product communities and 41% more likely to follow and engage with social media influencers.
This surge in live shopping represents a substantial opportunity for brands. Through harnessing the allure of exclusivity and forming partnerships with influential figures, brands can effectively tap into this highly engaged audience base, creating a pathway to increased brand visibility and generating a lift in sales and revenue.
The rise of social commerce is undeniable and it’s clear that younger generations are driving this transformative shift. The trajectory suggests that this trend will only continue to evolve. To seize the opportunities available, it’s crucial for brands to stay ahead of the curve and embrace the social shopping capabilities available cross-platform. Capitalising on these key opportunities can only drive incremental growth, through increased brand awareness and share of voice whilst gaining loyal customers and fans in an otherwise competitive digital landscape.
If you’re not sure where to start, or want to take your social shopping strategy to the next level, get in touch with us today.
*All statistical data via GWI