30 second summary:
- With the increase in online shopping and the amount of time people spend on social media, social media is impacting consumer purchasing decisions.
- Consumers influenced by social media are four times more likely to spend on shopping.
- There are four ways in which social media has a direct impact on purchasing decisions.
- Social media and online shopping shortened the customer journey.
- Social media increased the impact of social proof or word of mouth.
- Social media influencer marketing is one of the most effective ways to reach your audience.
- Stories and short-lived content are a new way to connect with your audience.
- Every social media platform is different and can be useful for different purposes.
A large proportion of purchases are made online these days and in 2020 that number has increased significantly thanks to the lockdown. As the number of Internet users increases and technology companies develop more ways to integrate the online world with shopping, online retail is expected to grow exponentially. Logically, many consumer purchasing decisions are also made online, and where do people spend most of their online time – on social media.
According to GlobalWebIndex, 54% of social media users use social media to research products and 71% are more likely to buy products and services based on social media recommendations. I bet you made a buying decision yourself based on what you've seen at least once on your feed, be it a friend's post or an ad that won you over.
It's hard to say exactly how much social media affects customers, not just what they buy, but also their consumer habits in general. Social networks have changed the way we advertise products and even opened up new advertising opportunities for us. Let's talk about some of the factors influencing customers today.
How social media influences consumer purchasing decisions
1. The shortened customer journey
The first thing you notice about customers on social media is the shortened customer journey. Before, people would find out about a product, see an advertisement on TV several times, and next week they may have gone shopping and eventually bought the product. This process can now take minutes.
According to the Deloitte report, 29% of social media users are more likely to make a purchase on the same day they use social media. That is, as soon as they see a product, they just click the link and buy it. No need to wait to go shopping. In addition, the same report found that consumers who are influenced by social media are four times more likely to spend on shopping.
The customer journey is not only shorter, it is now also more complicated. Social media has made product research more accessible to users. For example, when your customer sees a product on Instagram, they can immediately search for other reviews in the hashtag and decide whether or not to buy it. As a result, customers spend more time researching and searching for reviews in more sources.
62% of customers say they share bad customer experiences with other people. Therefore, keeping an eye on your online reputation and getting reviews on social media is extremely important. Remember, every review on social media matters – and that goes well with my next point.
2. The influence of social evidence
Granted, social proof is not a new concept: humans are social animals and we have made recommendations to one another for centuries. The thing is, these recommendations and anti-recommendations can now be heard by hundreds of people.
Every time you tweet or post about this amazing coffee shop or the shampoo that worked wonders on your hair, your social media followers will see it and may be moved to give it a try, too. The same applies to negative opinions and abuse. According to Forbes, 81% of consumers 'purchase decisions are influenced by their friends' posts on social media.
Additionally, people are proactively asking for recommendations on social media (and brands unfortunately often ignore them). According to this study by Awario, only 9% of brand conversations are answers to customer questions. However, depending on the industry, more than 100 people can ask for recommendations on social media in a month.
As I mentioned above, the social proof mostly affects your friends and the people you know. But more and more people on social media not only follow their friends, but also influencers. This is where influencer marketing comes in.
3. The power of influencers in consumer purchasing decisions
Influencers are the social media users who have robust, loyal audiences that often share the same interests. Your opinions will of course be seen by a greater number of people, people who trust them.
According to a study by the Influencer Marketing Hub, almost 50% of Twitter users made purchases as a direct result of a tweet from an influencer.
Micro-influencers are particularly effective in convincing their audiences as they are usually experts on a niche and a particular topic, which makes them a natural source of recommendations on that topic. If you're selling a niche product, finding social media influencers in your niche – Instagram bloggers, vloggers, TikToker, or Facebook group admins – is a great way to reach your audience.
Gen Z and Millennials are more likely to be influenced. 84% of Millennials say that user-generated content from strangers has at least some impact on how they spend their money.
The Impact of Stories on Consumer Purchase Decisions
Ephemeral content is a relatively new trend, but it is already convincing social media users and brands alike. Snapchat was the first company to use Stories as a format, but it is Instagram that popularized it and now has more than 500 million daily active users.
The content shared through Instagram Stories is usually raw and unfiltered, allowing brands to create a more real image. It enables companies to take people behind the scenes and show how they work, their work culture and the team behind the products. All of this helps create an authentic connection with a brand.
So these are the exclusive social media features that are influencing consumer behavior today. But as you probably know, every social media platform is a bit different. Often times, brands wonder which social media platform to focus on. Let's take a look at a list of the most popular platforms and see what makes them different from each other.
Most popular social media platforms
Facebook remains the largest social media platform in the world (with nearly 1.7 billion users), despite the fact that there has been a fair share of scandals and controversy in recent years.
The sheer size of the network means you can reach more people there, but be careful – Facebook isn't as popular as it used to be. Edison Research's Spring 2019 Infinite Dial study found that 62% of 12- to 34-year-olds in the US are Facebook users, down from 67% in 2018 and 79% in 2017. This decline is particularly evident in the age group of 35 to 54 year olds and the 55 year olds. Use was kept constant or even increased.
Still, Facebook accounts for 50% of total social referrals and another 64% of total social revenue, Business Insider shows.
According to DigitasLBi Commerce, Facebook was responsible for influencing more than half, 52%, of consumers' online and offline purchases in 2015.
Lately, the company has been trying to build its reputation through greater control over advertising and data management.
Instagram is an amazing platform for brands as it gives you so many ways to showcase your product: photos, videos, stories, galleries, filters, and more. There are now more than a billion monthly active users.
The nice thing about the platform is that it is popular with all generations in all countries. 80% of Instagram users follow a business account. 73% of U.S. teenagers say Instagram is the best way for brands to reach them with new products or promotions.
Additionally, the platform itself makes shopping easier by adding shopping tags and checkout options to posts. 130 million Instagram accounts tap a purchase post to find out more about products every month.
Although TikTok is a relatively new platform, its rapid growth made it a major source of brand awareness for social media users, especially Gen Z.
TikTok now has 800 million active users worldwide, and 41 percent of those users are between 16 and 24 years old. So if you want to reach a younger audience, TikTok is the place.
TikTok's algorithm is also great for niche and specific products as it curates your feed based on your interests. This makes it easier for you to find new followers – the algorithm pushes your content into the feeds of your potential target group.
In addition, TikTok recently introduced new advertising opportunities for the app that give brands more opportunities to attract customers.
For many people, Twitter is a source of product discovery, according to Hubspot.
Because of its quick manner and ability to connect with virtually anyone, it's a perfect place to ask for recommendations. SproutSocial shows that 53% of consumers recommend companies or products in tweets, while another 48% buy those products or services.
There is a debate about whether YouTube is actually a social media platform or more of a streaming platform or a content platform. Even so, it's one of the most popular platforms out there.
More and more people are looking for product reviews on the platform. Remember that 80% of people who said they viewed a YouTube video about a product they wanted to buy said so at the beginning of their buying process.
When you're ready to invest your time creating content for YouTube, it can be an extremely rewarding task. Just take a look at the BonAppetit channel belonging to the magazine of the same name. It has nearly 6 million subscribers and more than 1.3 billion views if the total circulation of the magazine doesn't exceed 1,600,000 copies per year.
As you can see, the data and our daily experience on the internet show that it is hard to argue that social media influences buying decisions. The influence of social media on customers' purchasing decisions can be explained by many factors: social proof, the spread of social media, and the availability of online retail.
However, it is getting harder and harder to get your brand featured on social media. Focusing on the right platform, creating creative social media marketing campaigns, and using the latest technology can help.