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Social media made me do it.

How social media has impacted the buying behaviors and purchasing patterns of today’s consumers.

By: Nimra Muhammed, Manager, Journey Management

It’s as simple as the click of a button; that’s the strategy brands are using to entice today’s consumers to make purchases online. By now, you’re probably aware of the rapidly changing digital marketplace, where companies like Amazon have historically dominated the one-click purchase experience. But Amazon is not alone in changing the buying behaviors of consumers — social media and digital marketing has also played a key role in shaping the way consumers make digital purchases.

Bankrate’s recent social media survey found that 48% of users have made impulse purchases because of something they saw on social media. Of this group, 60% were Gen Zers, who were more likely to be active on social media than their peers across other generations. Social media impulses are costing consumers nearly $754 per year. So, what impact does social media truly have when it comes to skewing buying patterns and behaviors? It’s safe to say, quite a bit.

Let’s start with the basics.
We know there are 4.9 billion people using social media across the world — that’s an average footprint of 6 to 7 social platforms each month. Much like you and me, we come across products and services by means of push content from brands, influencers, and other content creators and the influence on our buying behaviors is undeniable. Word of mouth and social recommendations go a long way, especially with so many of our everyday purchases being made entirely online — and all it takes is the click of a few buttons. With 80% of consumers’ buying decisions stemming through online influences, social media marketing levels the playing field for consumers and brands alike. It also uncovers the unique relationship that has transformed the digital marketplace; social platforms have taken on the role of the modern-day brick-and-mortar and strategically placed influencers act in place of salespeople that once liaised between products and customers.

Social media has become such a powerful tool for communicating, entertaining, and information sharing and its influence shapes the way we perceive and accept information, regardless of the medium. It extends beyond personal interactions, too; digital influences shape the way we discover new trends, products, and services.

When it comes to social media’s influence of consumer decisions, five emerging trends come to mind:

1. FOMO: The ultimate fear of missing out. This powerful psychological trigger is amplified through streamed content. Whether it’s scooping up the latest Stanley cups at Target or buying a PlayStation 5, the viral popularity of these trends makes followers want nothing more than to “fit in.” From limited time offers, to flash sales, and seasonal must-haves, this heightened sense of exclusivity and urgency is the epitome of trend-based culture — and the overwhelming fear that we’re not quite “in.” Sure, we may see the Stanley cups on sale by the time the 2024 holiday season rolls around, but in this moment, this viral tumbler has been the latest fad originated from just a few simple posts made online — and the Stanley brand reaps all the benefits that an uncontrolled TikTok trend provides. It’s free digital marketing; who doesn’t love that
2. Discovering New Products & Trends: With the use of hashtags, influencers, and video reels, any consumer with a smartphone now can access a host of new products and the latest fashion trends, must-have technology, or the trendiest cars. Behaviorally, people tend to buy from those they know, trust, and like and it’s these content creators behind the brands (and screens) that build the personal connections. About one third of U.S. adults (32%) say they use a smartphone to buy things online, at least on a weekly basis. And many of those purchases stemmed from social media thanks to product promotions, tutorials, and curated content. Haven’t we all read through a few reviews before making a purchase? We want to evaluate and assess our options before fully engaging with a product, don’t we? In Journey Management, we consider these action steps as phases of an individual’s ideal state experience. We start with awareness of the latest trend, followed by a personal assessment via social media posts before engaging with an online vendor to ultimately complete the purchase. These assessments of trends stem from an increased level of trust and loyalty. Expectedly, 77% of businesses now use social media to reach their customers. Talk about influence! Social platforms have significantly impacted the way businesses market and through buyer behaviors. It’s opened new avenues for prospective buyers to conduct research, purchase, and interact with brands and it’s become instrumental in shaping behavior, influencing purchasing decisions, and driving engagement.
3. Power of Influencers: What exactly is an influencer, and can you be one too? At Prudential, an “influencer” is one of our five customer cohorts within the financial industry. This may be a regulatory institution, such as the FTC or SEC, that influences the way an individual, an institution, or an intermediary operate. In the social media realm, an influencer has the power to affect the buying habits of others. As of 2022, influencer marketing has grown into a $4.41 billion industry. Think of it this way: as brands adapt to this marketplace, social media users spike. Fifty percent of Millennials place their faith in social media influencer’s product recommendations — more weight than any celebrity marketing ever had.
4. User Generated Content Creates Authenticity: Real experiences from people just like us sends across a powerful message. 3 in 10 adult social media users say they have purchased something after seeing a post about it on social media. It creates a sense of trust and community in which individuals see products or services being tried by those that may fit their demographics. However, not only are some users following brands and content creators for purchasing opportunities, but they also look to these accounts to be more informed on their buying decisions. As a form of client testimonials, social media guides the way individuals may evaluate making a purchase.
5. Engaging with Brands & Customer Service: The impact of social media may vary based on the medium, platform, or content though it’s evident that the line of communication is direct and instant. This isn’t new though; Facebook introduced a “buy” button on ads back in 2014. Much like Facebook, by simply opening an app we open up a world of possibilities for product discovery and brand exploration. Similarly, Instagram introduced a shopping feature allowing people to link and simply shop for products based on photos or videos they’ve seen across the platform — how innovative! Taking a look at our own brand, we see Prudential Financial ads appearing on TikTok or our own Prudential Brazil having a TikTok account that now captures a new audience of Millennial and Gen Z interaction in a new region — well beyond TV commercials and paper correspondence.

Strong influences can change individuals’ attitudes, perceptions and behaviors pushing toward a purchase. Impulsive purchasing behaviors are much like the fear of missing out. As marketers, we understand that we need to adapt and be where our target audiences are — online. But do we truly recognize how social media usage plays a role in a consumer’s buying process?

Think about it this way: 7 in 10 Americans use social media today and that may be a vast majority of our customers and potential customers all online.

Surprisingly, it’s not just Gen Z who sees the impact of social media on their buying behaviors. Fifty-eight percent of Millennials strongly agree or agree that their purchasing decisions are often influenced by social media advertising. Because these platforms allow users to read reviews, compare prices, and gain insights into the features and benefits of certain products and services that they otherwise would not have known, consumers can make more informed decisions.

Credit: Sprout Social 2022

How we’re applying this knowledge at Prudential

As we analyze in our Journey Management practice, to truly be in the mindset of the customer, we must understand not only the benefits but the challenges and pain points that may come with the impact of social media on purchasing habits for the individual cohort. For brands, their reputation is on the line. A few negative comments can lead to the spread of cancel culture — where individuals ban or avoid brands due to negative feedback or a flaw in the way a brand was reputed online. Eighty-one percent of individuals report that social media increases accountability for businesses. Though online presence opens a direct line of communication between brands and consumers, consumers have grown to be easily molded by what they see online. There is a growing need for brand reputation management, strong relationships with customers, and new marketing strategies to remain competitive in today’s digital marketplace.

Next time you’re scrolling social media and see an ad or curated content, consider how that social media platform has become instrumental in shaping your own assessment of products, engagement with brands, and evaluation in making that purchase. Our marketing motto of ‘amplifying the impact’ highlights the impact of buying behaviors amplified through social media content and digital marketing. Swayed by online influencer endorsements, human interaction can lead to greater customer loyalty and changes in a consumer’s appetite for the next trend. Of those 145 minutes the average social media user spends scrolling per day, reflect about the vast access brands now have to reach you, their potential target audience, by a simple swipe, click, or scroll.