Social commerce is a term used to describe a form of commerce mediated by social media that facilitates the sharing of information about products and services for both online and offline purchases. Yahoo first used the term in 2005 in a launch of a new online shopping store. Social commerce is shaping emerging commercial channels and marketers are taking advantage of social technologies to expand their businesses. Given the potential of social commerce and the size and buying power of Millennials, along with their propensity to make social inspired purchases, a study on this group is invaluable in developing new strategies for selling to this tech savvy and always connected cohort.
It is estimated that Millennials will have a combined purchasing power of $2.45 trillion worldwide by 2015. Forrester Research estimates social commerce in the US to reach $30 billion by 2015. This buying will be carried out online and in stores. At this time, tracking meaningful social commerce conversions tied to user behavior is at its early stages. While we can assume that social interactions in the form on online reviews, posts, forums and recommendations is driving some purchasing, documenting the scope of this activity and final channel for purchases is difficult. This is further complicated by the race of the most popular platforms to add “buy” buttons and new payment options to encourage buying while remaining on the platform.
The driving force behind social commerce can be attributed to the Millennial generation’s penchant for social media. Numbering 76 million strong, Millennials, also known as Generation Y, are defined as the demographic cohort born between 1980 and 2000. Their size and combined purchasing power make Millennials a valuable market segment for the future success of most companies.
However, unlike past generations, Millennials are not influenced by traditional ‘push’ marketing strategies. Born and raised in the age of technology, Millennials consume information when and how they want to. This has grave implications for companies who cannot adapt their marketing strategies quickly enough to capture and capitalize on their intermittent attention. Social media has provided companies with valuable tools to attract and engage Millennials on their own terms. However, despite the prevalence of social media, social commerce remains a relatively new phenomenon. It will demand a new understanding of the power of sharing and its impact of consumption patterns.
In September 2014, ShareThis released one of the first studies focusing on Millennials and social commerce gathering data by observing online browsing and social patterns of Millennials. They conclude that for these young consumers, interactivity and discussion are central to purchase decisions. The study did not report on behaviors for any specific platforms and reported findings only in relation to the non-Millennial population, for example saying Millennials are “3x more likely” to behave in a certain way.
This study, conducted by the Center for Marketing Research at the University of Massachusetts Dartmouth, is an in-depth look at current purchasing habits and trends of Millennials using three of the most widely used social media platforms (Facebook, Twitter and Pinterest). Last year, the Center conducted its first study on this topic, which served as the basis for this 2014 longitudinal look at Millennials and social commerce. Changes over the past 12 months will be noted.
In an effort to discern what turns a like, follow or pin into a sale, this study, like the 2013 study, explores and analyzes lead conversion tactics as identified by Millennials themselves. Also included is a look at mobile technology and its role in online purchasing. The potential for “buy” buttons is explored for the first time along with specifics on what products Millennials are buying on the most popular platforms.
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