Millennials Drive Social Commerce: Turning their Likes, Follows or Pins Into a Sale [REPORT]

Social commerce is a term used to describe marketing strategies that incorporate social media to facilitate online buying and selling of products and services.  (Yahoo first used the term in 2005 in a launch of a new online shopping store).  Spurred by the proliferation of electronic commerce, social commerce strategies are not just solely designed around click-to-buy action.  Rather, these strategies provide a virtual way for companies to attract, engage and interact with consumers at all points in the consumer buying decision process.  The advent of mobile technology has further encouraged social commerce, changing how users interact with and purchase from different companies.

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.

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, it remains a relatively new phenomenon.  To this extent, companies are still experimenting with the most effective ways to reach their end consumers through social commerce strategies.

Two significant white papers were released in 2013 on social commerce.  Neither focused specifically on Millennials.  Business Insider (The Rise of Social Commerce) concluded that “…one of the obstacles holding back social commerce has been the inherent friction in the buying process and the lack of intelligent buy now features incorporated directly into the social conversion.”  Their data comes from retailer tracking codes where sales are attributed to referrals from social media.

Vision Critical (From Social to Sales) surveyed 5,900 consumers with 4 online surveys from February to June of 2013.  Their respondents are age 18-55+.   They looked at social inspired purchasing on Facebook, Twitter and Pinterest and concluded that social media is driving a substantial volume of social influenced purchasing both in-store and online.

When possible, the study presented here will be compared with the findings of both white papers, demonstrating significant differences between Millennials and the general population with regard to social commerce.

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).  In an effort to discern what turns a like, follow or pin into a sale, this 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 by measuring percentage of sales conducted through smart phones versus tablets.

Highlights of the study include:

•     Facebook is the most popular platform among Millennials when looking to interact with companies/brands online.  62% of respondents currently like at least one brand on Facebook.  Twitter has 23% of respondents following a brand and Pinterest has 11% of Millennials pinning a brand (Nike is the most liked/followed brand).
•     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.
•     Of those who reported they had never purchased something after liking, following or pinning it online, offering a coupon or discount was the most frequently cited lead conversion tactic for Millennials.  Respondents indicated this is the top motivator leading to a sale.  Similarly, Millennials indicated that companies giving exclusive offers or appealing to their interests were more likely to see an increase in sales as a result of online interaction.
•     Relative to users of larger platforms, Pinterest has the highest sales conversion rate.   The user-friendly highly visual design of the website facilitates information search and evaluation of alternatives.  Pinterest makes the transaction process flow with optimal ease for consumers.
•     Facebook, Twitter and Pinterest contribute to both online and in-store purchasing.  Seventy-seven percent of Facebook users, 66% of Twitter users and 63% of Pinterest users are multi-channel shoppers.

To download report CLICK HERE.