A recent study (Millennials Drive Social Commerce: Turning Their Likes, Follows or Pins Into a Sale) by University of Massachusetts Dartmouth uncovers the triggers behind why the “Generation Y” engages with brands in social media. Here’s some background that will set up our further discussion:
It is estimated that Millennials will have a combined purchasing power of $2.45 trillion world wide 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.
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 necessary market segment for the future success of most companies.
Here’s the reasons why Millennials follow a brand or company in social media:
Across all platforms, the top reason why Millennials ‘like/follow/pin’ is to support a brand. Being unlike any other generation, Millennials pick and choose not only which information they will be exposed to, but also how the information is delivered. By liking/following/pinning a particular brand they support, Millennials are customizing their exposure to advertising based on their preferences.
These numbers won’t be that surprising to anybody whose follows us here– the support the brand and coupon discount have always been the top reasons why people follow companies in social media. The surprising element might be what we call the long tail reasons: someone recommended, to share lifestyle, or seeing their friends are already a follower.
Getting a like or a follow is only the first step in monetizing social media. The next step is turning that affinity into some form of purchase. This is where the study actually provides some practical advice for any business owner. For instance, here’s the breakdown of the purchase habits from the top 3 social platforms.
When it comes to social mediated purchasing, Pinterest resonates with Millennials. Forty-seven percent of respondents with Pinterest accounts said they had purchased something online after pinning it – a 9% and 14% increase over those with Facebook and Twitter accounts, respectively.
Surprising numbers… one actionable step you could take is look at your current audience in social media and see if your customer percentages are the same. If they aren’t start trying new engagement strategies.
If there’s one thing that slaps me in face with digital marketing it is that once you have baseline numbers they are pretty dependable. For instance, our product Curation Traffic has been out for just over 2 years. It’s amazing to see over the 24+ months how close analytic percentages remain the same after we’ve established a baseline.
Where’s Instagram? Pinterest is great but I’m surprised that Instagram didn’t make it anywhere here. If you have a consumer facing product or brand Instagram should be on this list. I believe Instagram to a be more powerful connection than Pinterest for the younger generations– although this depends on the vertical or niche market your in.
One of the most interesting parts of the study delves into the changing commerce landscape:
When it comes to ecommerce conversions triggered by social media, both online and in-store retailers benefit. One in ten Facebook purchasers report using only the online channel. Twelve percent use only in store retailers while over three quarters use both channels. This pattern is repeated with Twitter and Pinterest purchases although the Pinterest users are the most likely of the 3 platforms to buy exclusively online. The ease of purchasing, along with its new tools like “rich pins” for automatic updates and price drop notification on pinned items, makes Pinterest an attractive online buying site. Millennials are definitely multi-channel shoppers.
One of the biggest problems I have with these type of studies is they rarely breakdown purchase habits by price.
This study does break down how much Millinnials spend by platform:
- Facebook = $105
- Twitter – $72
- Pinterest = $150
What I would like to see is purchase decision broken down by impulse purchases compared to a “comparison purchase”. I would consider a t-shirt an impulse purchase where a $120 running shoe probably wouldn’t be put in this category. This type of analytic purchase data is important when you’re thinking about how to engage and monetize with social media.
The Answer: Channel Your Markets Aspirations
Social media is about emotions. It’s about a one on one connection with the individual. The answer here is to consistently appeal to the aspirations and deep seated emotions of your market.
Each element here is driving to what I like to call an affinity effect. The more you can get someone to attach themselves to your ideas, your brand, or your products the more possibility they will purchase.
This is also the first generation to have social media (as we know it today) within their DNA. It will be interesting to see as they continue to age, build families, expand their careers how social media will play into their purchase habits.
Understanding this dynamic is important for anybody who is looking to connect with people within the social realm. For instance, people growing up today have entertainment on demand with YouTube, Netflix, Amazon Prime, etc. This is shaping their media consumption habits not only today but in the future. The current landscape of entertainment will change. This is the same for social media and commerce. Just like when the web became standard and you couldn’t really “be in business” without a website this same type of norm will transfer over to social media.
The conclusion from the study sums it all up well:
Millennials are leading the social commerce movement. They are more likely than any other group to like/follow/pin companies and brands. They are enticed by coupons and discounts, purchase hair/beauty products and apparel, often using mobile phones and tablets. They are multi-channel shoppers, buying both online and in-store. This cohort is active online in ways that allow them to connect, organize, stay informed and shop. They spend more money on Facebook, Twitter and Pinterest than other groups making them the ones to watch as social commerce surges forward.
I’ve covered this study in quite a bit detail and you can follow the link above to read the full study yourself. It’s a compelling study that I believe will taps into the future purchase habits of the Millennial generation.
All images from umassd.edu.