More than half of US Gen Zers are headed to TikTok Shop this season

Dive Brief:

• About 43% of Gen Z shoppers plan to spend more for the holidays this year, compared to 37% of millennials, according to a report released by Fiverr. Per Fiverr, Gen Z continues to do much of its holiday gift searching on social platforms.
• Through TikTok Shop (34%), influencers‘ recommendations (25%) and generative AI search (14%), the demographic globally remains largely influenced by what’s trending online for gift choices.
• In the U.S., nearly 54% of Gen Z will find gifts on TikTok Shop alone. A third of U.S. respondents will shop for gifts seen on Facebook and Instagram ads, and almost a quarter (24%) of U.S. Gen Zers will make their purchases through influencer recommendations.

Dive Insight:

As Gen Z looks online for the holidays, brands are continuing to bet on social media as a means to reach younger generations.

Retailers said they are investing more in digital marketing to attract the segment, with 57% of U.S. retailers using social media ads. Globally, nearly 40% of retailers are investing in social media ads, followed by influencer marketing (35%), email marketing (33%), and improved product pages and SEO (29%) as strategies to reach the audience. Nearly 70% of businesses surveyed also said they plan to use AI this holiday season to “level the playing field” against large e-commerce brands and connect with younger shoppers, according to the report.

“With inflation, competition, and staffing shortages intensifying both online and in stores, the insights from our latest research underscore the type of expertise businesses need to stay ahead,” Gali Arnon, chief business officer at Fiverr, said in a statement. “Demand is up for experts with AI skills, digital marketing, and social media to maintain loyal customers and reach new audiences near and far.”

EMarketer released a report last month supporting the forecast of the younger generation making holiday purchases on social media. The company found that 42% of Gen Z shoppers are likely to buy gifts via social media this year, higher than any other generation. Across generations, shoppers buying gifts through social media planned to purchase gifts from Instagram (57%), Facebook (56%) and TikTok (43%).

Social media platforms like TikTok and Instagram have incorporated shopping into their apps in recent years in an effort to attract younger generations and the brands they shop at. TikTok Shop launched in the U.S. late last year, adding an e-commerce element to the popular video-streaming app.

Already popular with Generation Alpha, Generation Z and younger millennials alike, TikTok Shop has been investing in its shopping capabilities. The platform hosted hosted various discount days this summer in collaboration with NYX Professional Makeup and L’Oréal Paris, among others. The shopping portion of the platform has continued to expand with a pre-owned luxury segment in the U.K. and its move in the U.S. to begin offering authenticated handbags. Instagram has continued to pursue similar ventures in hopes of attracting the spending power of the customers already on its platform.

With inflation as a factor, Fiverr found that 80% of businesses are offering discounts, compared to 55% in 2023. The report also found that 42% of customers prioritize good deals for their holiday shopping, followed by free shipping (32%), and high-quality products (30%).