One of the biggest concerns Americans face for 2022 could be record inflation. This will likely continue to drive up household expenditures and impact wages. Inflation rose 7 percent in 2021, the highest rate in more than 40 years. In 2021, Americans witnessed a sharp rise in the prices of basic necessities.
Although the government tried to stimulate spending with ultra-low interest rates and stimulus money, there was so much demand for goods that prices went up at an alarming rate. The U.S. Department of Labor announced earlier this month that December’s core inflation rate (which excludes volatile goods like food and gasoline) jumped to 5.5 percent, making it the largest increase in a decade.
Yet, U.S. shoppers are continuing to spend – and social media continues to be a major factor on where Americans are taking their business. According to a new survey conducted by Point and OnePoll, more than one in three respondents said they considered social media “very influential” when it comes to their spending habits – with 35 percent of respondents reporting as much, compared to just 12 percent who said social media is “very uninfluential.”
The survey also found that more than half Americans – 55 percent – even said that social media had influenced them to go over budget or otherwise spend more money than intended on a particular product. With 35 percent agreeing, one reason was pressure to keep up with Joneses.
It was the Pandemic
Pandemics also magnified the influence of social media on American decision-making. Americans saw a decrease in spending after the lockdowns. However, in 2021 as the country began to settle into the new normal, spending increased – even as the supply chain issues persisted.
Mary Schneeberger is senior director at Avionos’ integrated marketing practice. She explained that the pandemic has changed consumer shopping habits and will continue to do so. Avionos also tracks American spending habits through 2021. The past two years show that online and in-person shopping is possible and retailers are willing to do whatever it takes to provide seamless shopping experiences. Shopping via social media has become more popular thanks to virtual reality and live streaming, which is changing how people shop.
Not only has social media changed how consumers transact but it also altered the way that they find new brands and products.
In an engaging format, social influencers can earn consumers trust by showing their purchases and discussing the product’s quality to thousands of people via platforms like YouTube and TikTok. Schneeberger, via email: Customers use reviews and customer ratings to decide if they want to purchase a product.
The Younger Crowd
It’s not surprising that the Avionos survey found that most people use social media to make their purchasing decisions.
Schneeberger said that “Gen Zers (70%), and Millennials (68%) use social media more often than Gen X (51%), and Baby Boomers (33%). These younger consumers leverage many channels to buy products compared with older generations.”
Gen Zers also spent more time using social media than their older counterparts. This further explains how they see social media as a destination for purchasing, compared with older generations.
However, not all people are sold on the use of social media to shop.
Schneeberger said that of the people who have not bought via social media, 45 percent do not see it as a purchase destination and that 33 percent aren’t trust any social media app with credit card numbers or personal information. Additionally, many consumers prefer to shop online (16%) or to view the product before purchasing (15%).
Avionos discovered that young people use Facebook, Instagram and TikTok the most often to buy products.
Schneeberger stated that 56% of Gen Zers have purchased items through different channels than what was originally planned. Schneeberger noted that Gen Zers tend to be more familiar with digital channels, and more inclined to shop on social media. This is because they have a greater influence over changing consumer behavior. However, Gen Xers and Millennials used online shopping platforms for products they wanted to buy in-store. This means that retailers can engage more with these consumers both in-store and online. To meet customers wherever they are most interested, it is crucial to offer omni-channel commerce services.