How Social Media Is Capitalising on Its Youngest Users

By: Michael McQueen

Years ago, social media well and truly lived up to its name. Platforms which enabled the easy exchange of photos and statuses, these media allowed individual engagement for purely social purposes. The last decade has seen social media evolve into something much more overwhelming, addictive and ultimately lucrative than their original ‘social’ role, especially as their most native users have grown up into their most powerful and profitable consumers.

Defined loosely as those born between the mid 1990s and the early 2010s, Gen Z make up almost 40% of the world’s population. They are over-represented in some of the world’s fastest-growing economies such as in India, South East Asia and the Middle East, and boast a combined spending power of $143 billion.[1]

As consumers, Gen Z present a sizeable opportunity, but they can also be difficult to decode. In the words of Forbes’ Pablo Stefanani, “Gen Z is a tough nut for many brands to crack: an enigmatic generation defined by its willingness to challenge convention and break the rules that brands had previously taken for granted. It’s critical that brands adapt to remain relevant.”[2]

According to research conducted by Atlantic, more than half (51%) of Gen Zs reported a desire to try new products even when one they already like is on offer.

While unpredictable and unconventional in many of their behaviours, one thing that can be depended on is their engagement with the online world. They are technology-obsessed consumers whose adolescent years have been shaped by and played out on social media. While their engagement with content on these platforms differs from older generations, their presence can be strongly felt, in both their creating and in their spending.

Gen Z leads the way on social media spending across multiple measures. They are the most likely to be influenced to buy a product based on positive reviews and to respond to influencer endorsements in purchasing.[3] Almost a third of Gen Zs actively use platforms such as Facebook, Instagram and TikTok to seek inspiration for online purchases.

Evidently responding to such trends, platforms such as these have maximised the spending potential of Gen Z by making purchase options readily available. TikTok has capitalised on this younger generation’s appetite for social commerce most effectively. In October 2020, TikTok entered a landmark deal with Shopify enabling the platform’s 1+ million merchants to tap into TikTok’s burgeoning audience of Gen Z users. At the same time, the arrangement allowed TikTok content creators to add ‘Shop Now’ buttons to their videos.[4] Instagram and Facebook soon followed suit, making e-commerce accessible on their platforms by introducing easy shopping options on their platforms.

Recent moves by Snapchat indicate that the collision of social media and e-commerce is set to last, with the Gen Z dominated platform recently announcing the acquisition of the tech start up Fit Analytics. Fit Analytics builds technology used by many online retailers that assists in choosing correct sizes for online purchases.[5]

Snapchat generates significant revenue from the advertisers on its platform. This acquisition follows its existing partnerships with brands like Ralph Lauren and Perfect Corp in which augmented reality allows users to try on clothes before buying. Users don’t even need to leave the app to make their purchases, but can browse, try on and buy directly through the platform.[6]

The target market for this strategy is not difficult to identify. 90% of Gen Z in the US use Snapchat frequently, on average opening the app 30 times a day. Snapchat is bringing accessible products straight to the source of their biggest and most lucrative market and using the latest tech to make buying easier than ever.[7]

The boom of social media is continuing to grow in power, with platforms proliferating, usage growing and spending skyrocketing. The trends are clear: the younger the user, the more likely they are to spend through social media and it seems clear that the market for social media e-commerce strengthens with every generation.

With the biggest users and spenders of social media being found in its youngest participants, Instagram’s interest in engaging under 13s on its platform seems distinctly strategic. Instagram’s head Adam Mosseri recently confirmed that the creation of an under-13s Instagram was on its way, responding to the growing number of children asking their parents for access to Instagram to catch up with friends.[8] Their solution to this is a version of Instagram that can be monitored by parents and on which privacy and safety are prioritised.

Laws surrounding the protection of children’s privacy are naturally much stricter than those of their older counterparts. Selling products to under-13s through social media is essentially prohibited by the legislation concerning them. In 2019 Google was fined $170 million for tracking children’s viewing history in order to curate YouTube advertising. TikTok similarly faced fines for breaching this same Children’s Online Privacy Protection Act.[9]

However, while platforms may not be able to immediately monetise the under-13s market, the move still marks a strategic investment which is in line with the trends connecting social media purchases and young users.

When Gen Z entered the world of social media, e-commerce on the platform was not an option. However, their status as digital natives and their overwhelming exposure to social media from their early teens prepared them as a market before buying was even available. The advent of influencers and the introduction of businesses’ online presence on social media contributed to this, exposing them to products through social media long before the collision with e-commerce had occurred. By the time Instagram had introduced its e-commerce options, the demand was already overwhelming and the move was simply a natural progression.

The same could be said for the under-13 age group. If the younger generations’ buying behaviours continue their trajectory, then the strength of the youngest market on social media once they reach a buying age will be unprecedented. While their purchasing potential is not immediate, the trends indicate it is a very strategic investment for Instagram.

Social media companies are not overlooking the power of their largest markets. Unconventional as they may be, the coming years will likely see ongoing capitalisation of the purchasing potential of their youngest users who soon will likely not remember spending any other way.

[1] 2020, ‘State of Gen Z Report’, Zebra IQ, September.

[2] Stefanini, P. 2020, ‘A Simple Secret To Satisfying Gen Z: Listen’, Forbes, 20 March

[3] Report, PWC – Gen Z is talking, are you listening? June 2020

[4] Phan, T. 2020, ‘With social commerce on the rise, Shopify’s tie-up with TikTok makes a lot of sense’, The Hustle, 28 October.

[5] Cohen, J 2021, ‘Snap’s latest story: An acquisition to power up its ecommerce apparatus’, The Hustle, 22 March.

[6] Ibid.

[7] Ibid.

[8] Lyons, K 2021, ‘Facebook is working on a version of Instagram for kids under 13’, The Verge, 18 March.

[9] Ibid.

Article supplied with thanks to Michael McQueen.

About the Author: Michael is a trends forecaster, business strategist and award-winning conference speaker.

Feature image: Photo by MART PRODUCTION from Pexels