Gen Z and millennials turn to social media to holiday shop

Comment on this story Comment Savannah Baron keeps an exhaustive spreadsheet of perfect gifts: a

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Savannah Baron keeps an exhaustive spreadsheet of perfect gifts: a camping chair love seat for the couple who enjoys the outdoors; a refillable candle for your eco-conscious cousin; a cocktail infusion kit for the friend who’s into mixology.

It’s not for her. It’s for her 189,000 TikTok followers.

Baron, 27, derives a certain satisfaction in “finding those little things and little brands” that could easily be overlooked. But her TikTok videos of curated gift ideas tap into a crucial and increasingly younger audience: People who do their holiday shopping — from inspiration to purchase — on social media.

Research shows 60 percent of Gen Z (born from 1997 to 2012) and 56 percent of millennials (1981 to 1996) will do at least some holiday shopping on TikTok, Instagram, YouTube and similar apps, according to the consulting firm Deloitte. That’s a significant leap from the 49 and 46 percent, respectively, recorded in 2021. Even Gen X and boomers have warmed up to the trend, the study found.

What’s more, social media is a key starting point: 6 in 10 shoppers say they get “inspiration and ideas” from the sites, according to a global survey by the IBM Institute for Business Value, in association with the National Retail Federation.

“Social media provides exposure to so many more products that we would never have access to,” said Logan Stenseng, 24, of Iola, Kan., a small town about 100 miles southwest of Kansas City. He uses Pinterest for gift ideas but also hunts for bargains on Facebook Marketplace. “You also see what’s trendy in other places, and things that are very useful or practical that are helping other people that you can’t find in stores here.”

The platforms allow for a seamless browse-to-buy shopping experience, said Bobby Stephens, a partner at Deloitte who focuses on the retail and consumer products sector. And he expects more companies, brands and platforms to move in that direction as consumers continue to gravitate to product reviews, pick lists and unboxing videos.

“I think it’s just a more engaging and modern experience for the end consumer,” Stephens said. And with younger demographics spending an increasing amount of time on the apps, “what you’re seeing is brands and retailers bringing the content to them.”

The market for influencer-branded content hit $10.4 billion last year, according to Grand View Research, a market research firm, and is expected to swell in the next several years. Fashion and lifestyle brands represent the largest slice — nearly a third — of the market, the analysis found.

How TikTok ate the internet

The shift is among the many ways consumers have altered their buying habits in the face of decades-high inflation and rising interest rates. Shoppers are savvier — hunting for bargains, comparing prices, clipping coupons — and buying earlier, in part to spread out spending over the season. The National Retail Federation projects holiday spending will range from $942.6 billion to $960.4 billion in November and December, which is 6 to 8 percent higher than last year. The figures do not account for inflation.

Retailers also had to adapt this year as stockpiled inventory and rising labor costs torched their margins, forcing them to roll out early sales and discount a broader array of merchandise. But they also recognized that consumers expectations had shifted, even after in-person shopping returned to pre-pandemic levels. Convenience and service took priority. Curbside pickup, buying online and picking up in-store, and self-checkout became standard.

Allison Stackhouse, 24, finds herself shopping on social media because it’s where she spends most of her free time.

“All of the tracking information that is built into my phone — it knows what I like, it knows what I want,” she said. “It’s just like, you’re thinking about [a product]. They throw it in your face and you’re like, ‘Okay, well, now I’m going to buy it.’ ”

TikTok and Facebook parent Meta have led the trend among social media companies. In 2020, Instagram announced a new shopping feature for retailers to create virtual storefronts, making it easier for users to click and buy. Now, the app also has a “shop” tab on the bottom toolbar.

TikTok, which in five years became the dominant social media app among Gen Z, is expanding opportunities for brands, offering tools and guides to best draw in an audience and manage ads. The app also rolled out a live shopping feature in the United Kingdom and in Asian markets. The social media giant is gearing up for a U.S. launch in the coming weeks, the Financial Times reported.

But there have been stumbles. On Wednesday, Meta announced it was laying off 11,000 employees, attributing it in part to an overestimation of the e-commerce boom during the pandemic. The decision came three months after Meta announced it was shutting down its live shopping feature on Facebook after it underperformed.

Ryan Detert, the chief executive of Influential, an influencer marketing company, said that despite Meta’s move away from the arena, he expects influencers and brands to lean into live-streaming. The experience is just an enhanced version of watching someone review a product in a video, he said, but now viewers can interact with the talent and ask questions.

Detert pointed to the overwhelming success in the Asia-Pacific region, where “200 billion — with a B — is spent on live commerce every year.”

“It’s a consumer behavior,” he added.

The shift is a natural extension for people who already shop on social media and turn to apps such as TikTok to research products. Stenseng, from Kansas, said he uses the app as his search engine because it’s ripe with information and honest reviews of products, allowing people to be informed consumers, he said.

Liv Picarillo, a 24-year-old consultant in Boston, said she likes shopping on social media because of the added convenience.

“You’re already scrolling through Instagram and you see this really cool thing you like, and you can click three links and then it’s at your door in two days,” she said.

But how influencers present the products is important to young consumers, who have a radar for insincere endorsements. Both Picarillo and Stackhouse, a marketing professional in New York, said they won’t even entertain a post if it’s clear the influencers wouldn’t use the products themselves.

This is something TikTok creator Naomi Hearts, 24, considers every time she’s approached by a brand. As a plus-size trans Latina with more than 918,000 followers and 62.7 million likes, Hearts feels a responsibility to make sure the companies she recommends are inclusive and align with her principles. She gives careful consideration to each product to ensure it is right for her followers.

“I think going on social media to sell a product is a good investment,” Hearts said, adding that followers are “going to buy what you’re selling because they love you and they want to support you.”

Amazon was an early adopter, establishing an influencer program in 2017 and developing “Influencer Storefronts” where creators can include links to items they talk about on their feeds. If a follower buys the item through that link, the influencer gets a commission. Walmart recently announced a creator platform where influencers can host live shopping experiences and link to products.

Retailers’ stockpiles mean deep holiday discounts starting now

Full-time influencer and content creator Claire Wenrick has been working with Amazon since she was in college. About 40 percent of her income comes from affiliate marketing, she said, another 40 percent through brand deals and the last 20 percent through her creator coaching business. On a good month, the 23-year-old living in New York makes about $5,000 from her Amazon storefront.

Amazon doesn’t pay Wenrick to promote items, she said; rather, it incentivizes her to link products she talks about in her TikToks to her storefront. If she hits a certain number of sales for the month, the company sends her a gift card that she can then use to order more products to review on her social media.

Now, Wenrick is beginning to prepare her holiday shopping content. With sales stretching well before Black Friday and Cyber Monday, she will start promoting her affiliate links early. She also plans to do her “favorites of 2022,” she said, a series that performed well for her last year.

“I think sharing products that I’ve been using and I’ve been loving the entire year helps people actually purchase the product rather than me just kind of throwing something random in their face that I don’t have or I know that I like,” Wenrick said. “People love the reviews.”

For Baron, who posts gift guides around the holidays and works full time at a consulting firm in Newport Beach, Calif., the TikToks are her side hustle. In a good month, she can make as much as $5,000 from affiliate link and brand deals. But making money off her videos was not her initial intention, she said. In November last year, she had about 300 items on her spreadsheet and realized there was no use in gatekeeping her unique finds.

“It is nice for people to hear either, ‘I have gifted this year before,’ ‘I have received this as a gift before,’ or ‘This is something that I personally would like,’” Baron said. “Having that personal touch and knowing that it’s something that somebody else would enjoy, I think it’s so beneficial when you’re actually shopping for gifts.”