The shopping habits of today’s consumers are increasingly integrated with their use of technology, with social media and innovative e-commerce solutions influencing how consumers find out about products, what they buy, and where they buy them.
Circana’s Connected Consumer Report outlines the opportunities presented to brands and businesses in this increasingly connected world, including a changing relationship to social media, the prioritisation of everyday luxuries, and the evolution of e-commerce.
Alistair Leathwood, Head of Insights, Analytics and Media, APAC, Circana, said that technology offers new ways for businesses to encourage consumers to buy.
“In an era where digital connectivity is at its peak, brands have a unique opportunity to thrive by leveraging this and deeply engaging with their audience in new and creative ways,” he said.
“By combining community, shopping and entertainment, brands can capture their audiences and provide them with a unique experience that urges them to take immediate action, even if they weren’t actively seeking to purchase prior to engaging.”
Keeping connected
Technology is becoming an increasingly large part of consumer’s lives, with four in five people owning at least one connected device, and 37 per cent, almost two in five, planning to buy more connected products in the next 12 months, despite current cost-of-living challenges.
This high level of adoption of technology means that social media is reaching more people than ever. For example, YouTube reached 85 per cent of Australians and 90 per cent of New Zealanders in just one month.
Of particular importance when considering the impact of social media is the Gen Z, or Zoomer, cohort, legal drinking age portion of which are aged 18 to 27. This generation will make up a quarter of the population in the Asia Pacific region by 2025 and have an estimated US$450b in global spending power.
Many Zoomers utilise technology to earn extra cash, with 16 per cent making money as influencers on social media. User-generated content on social media platforms is a key when appealing to consumers in this age range, who are increasingly concerned with the authenticity of the content they consume and the products they buy.
While technology and social media play a significant role in the shopping habits of Gen Z consumers, they are still omni-channel shoppers, with two in five saying they would prefer to shop mostly online and three in 10 preferring mostly offline shopping.
Everyday luxuries
Another way that our increasingly connected world impacts today’s consumers is through their reaction to cost-of-living pressures. What was once known as the lipstick effect, the theory that consumers spend more on small luxuries during times of economic downturn, is now becoming ‘little treat culture,’ where consumers are treating themselves, often as a reward for completing difficult or uninteresting everyday tasks. Both affordable and aspirational luxuries are being fuelled by Gen Z social media advocates, who are suggesting hacks or customisations to make the most of pricy items.
In addition, consumers are prioritising little treats within pinched household budgets, retaining a section of their income for these small luxuries. Shoppers are also becoming savvier, finding new ways to maximise their budgets without sacrificing quality or experiences.
The new age of e-commerce
More than just a means of advertising, social media platforms present new avenues for shopping, termed social e-commerce. Many social platforms such as YouTube, Instagram and TikTok encourage consumers to purchase in the moment by providing instant check out options with in-app e-commerce links.
This brings the store to the consumer, accelerates decision journeys from awareness to purchase, and encourages consumers to shop even when they may not have been planning to. Thanks to the convenience of social e-commerce, 70 per cent of global consumers find that they are shopping online, even without previous intent.
Leathwood said that to make the most of social e-commerce, data strategies need to be optimised to enable carefully tailored campaigns.
“Brands can strengthen their approach by harnessing the power of data to understand their ideal shopper, tailoring campaigns to meet those dynamic needs and increase marketing success.
“Marketers and brand professionals need to go beyond vanity metrics like clicks and engagement, they must understand how online behaviour converts into sales, using e-commerce transactions and first-party data to gain greater visibility into the purchasing journey,” he said.
Increasingly, engaging with consumers online will involve engaging in the Metaverse, which is a blending of physical and digital environments. The Metaverse will offer vast opportunities for data insights, as well as the ability to provide experiences such as 3D digital stores, virtual sales assistants, personalised shopping experiences, and innovative loyalty programs.
While there is significant innovation occurring in e-commerce, the knowledge and atmosphere provided by brick-and-mortar establishments remains an important element of consumer experience, indicating the continued importance of omnichannel offerings.