Social media isn’t just about catching up with family, old friends or that random person you met at a bar five years ago. Now it’s become one of the most powerful e-commerce platforms.
This year alone, consumers around the globe are projected to spend $1.23 trillion on social media commerce, according to an analysis by Capital One Shopping. The analysis also shows that about 4 in 10 online consumers in America make purchases on social media in 2024.
Social media has changed the game of marketing and how we spend alongside it.
The rise of influencer culture
It’s a marketer's world and we just live in it. Social media provides companies with lots of data to help them market directly to you.
“I think social gives you an opportunity to do that really well…understand different types of audience segments and various different types of customer journeys in terms of how they correlate and interact with the brand,” said Ari Lightman, professor of digital media and marketing at Carnegie Mellon University.
Additionally, marketers now have a new way to access everyday consumers through the rise of influencer culture. Influencers help make brands accessible and promote and sell items to their audience, thereby becoming the marketing vehicle itself.
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“As influencers become larger in terms of their following they become very much akin to celebrity endorsers,” said Lightman.
Influencers with an audience have what marketers want — people’s attention. Add in community and trust, those followers can turn into buyers. According to Capital One Shopping Research, 30% of digital consumers have purchased something because of an influencer or creator’s social media post.
The Joneses are everywhere
Behind our screens, inside the apps, our world opens up creating a new form of comparison that can drive consumerism. In the past, “keeping up with the Joneses” meant feeling like you needed to keep up with your neighbors and maintain a certain lifestyle or risk being considered a plebeian.
However, the Joneses are no longer geographically bound to our neighborhood, community or workplace. The Joneses are everywhere. Every time you open Instagram or TikTok, you can see how people live across the globe — from lavish vacations to expensive dinners and exclusive events, other people’s luxurious lifestyles can be rubbed in your face without even trying.
It’s easy to feel a twinge of envy or be overcome with the fear of missing out (FOMO). Those feelings can put a damper on your mood. To boost your mood, you seek refuge in a little retail therapy. You get a dopamine hit, but it doesn’t last. However, your credit card bill does.
Aspirational purchases, status symbols
Social media and influencer culture can revive a brand and catapult it to unknown heights. Consider the popularity of the Stanley Cup, which became a social media phenomenon with a rabid fan base. In 2023, Stanley Cup sales soared to a whopping $750 million.
"Aspiration is a huge emotional driver"
Items like the Stanley Cup can be an aspirational purchase or status symbol. “Aspiration is a huge emotional driver,” said Lightman. Some people buy a Stanley Cup with aspirations it’ll help motivate them to drink more water and reap the benefits. In essence, using a purchase as a form of commitment to help them with who they want to become.
Others buy it as a status symbol as one might buy a Birkin bag. But not everyone feels good about the purchases they make on social media.
Buyer’s remorse
When scrolling through social media, something might catch your eye and you immediately think, “I want that!” Given how simple it is to buy these days, it’s easy to succumb to impulse buying and get stuff we don’t need.
About three in four people have purchased unnecessary items on social media, according to WalletHub's Social Media Shopping Survey. Data from the survey also shows that 63% of people regret some of the purchases they’ve made from social media.
Author and coach Jen Fort, 58, fell prey to impulse buying on social media. “My history with social media purchases ranges from low-cost items that caught my eye during a creative video, that I never used or did not meet expectations for quality or use. Then there is the big ticket item, a course for overworked, overstressed women to help reclaim their life. Big ticket… like the kind you don't tell your husband the real cost until much, much later,” she said.
"The way I've changed my spending habits over time is that I now save social media posts and let them marinate for a bit"
Fort found a way to halt some of the impulse buying and keep social media spending in check. “The way I've changed my spending habits over time is that I now save social media posts and let them marinate for a bit... I'll go back to the saved items a few days or weeks later and see if the item still holds that desire to buy. I'd say I weed out 90% of items I was originally interested in,” said Fort.
Social media is an illusion
Social media has given us unfettered access to others — but in a highly curated, performative way. Though the Joneses appear every time you open one of the addicting apps designed to keep you scrolling, there’s so much we don’t see.
We don’t know how people are actually paying for things. It could be racking up credit card debt or getting support from the bank of mom and dad. It could be an inheritance after an untimely death or a settlement payout from some awful accident or event.
Even if others are independently wealthy, we don’t know what sort of things they had to do to amass that kind of wealth or the hours worked.
Social media is a type of theater, and we are the audience. All we see is the illusion of success and luxury. We see the end product but not the details behind it. That would be far too #reallife.
Bertolt Brecht, a theater practitioner who sought to confront the audience by shattering the illusion of reality and acknowledging it as a performance said, “When something seems ‘the most obvious thing in the world’ it means that any attempt to understand the world has been given up.”
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