Not for sale: Social media’s role in digital impulse spending
Social media invites a whirlwind of ever-changing trends, inviting consumers to constantly redefine their identities. From the current “it shoe,” to the trendiest home decor, to the most popular water bottle, people are consistently buying more and more. This social media dominated world has produced instant pressure for people to fit in with the latest fads, with young people being especially susceptible. We’re all affected by this new wave of extreme impulsive shopping, so much so that many of us don’t even realize the part we play in its never-ending cycle.
Despite social media’s influence on increased convenience and gatebreaking, digital impulse spending has led to new irresponsible spending habits across all types of age groups and consumer segments. Credit unions are uniquely positioned to jump in, take action and help consumers take back control of their financial outlook.
Scraping the fluff
It is estimated that consumers will spend roughly $11 trillion on online goods/services in 2024.¹ This notion of digital impulse spending is especially prevalent on everyone’s new favorite Vine replacement, TikTok. A study by Earnest Analytics shows adults 18-24 were 3.2 times more likely than the average consumer to buy something on TikTok Shop in 2023.²
As early as 2020, the #TikTokMadeMeBuyIt trend began, encouraging viewers to purchase and test out trending products. While some products seem to be cheaper, or worth-while, a lot of them tend to be a waste of money. Ultimately the trend revolves around impulsive and irresponsible spending. With the launch of TikTok Shop in 2022, the push for thoughtless shopping has only increased.
Is there a way to strategically insert marketing into the stimulant itself? Cut social media off at its legs. Find a way to help consumers realize social media’s impacts on their spending decisions
before they hit purchase. Credit unions have the tools to help inform these reactions and make saving just as exhilarating as spending.
Getting down to the nitty gritty
Now what is really going on inside of people’s heads that’s instigating this behavior? The key to effective marketing is truly understanding human behavior; not just the what, but the why behind the what.
Psychological analysis can help provide a deeper insight into human behavior. Perhaps the most compelling cause of impulsive spending is that it satisfies immediate gratification. On the flip side, as a marketer you can point out that this immediate gratification likely leads to future displeasure and that instead, financial responsibility is sure to lead to greater fulfillment later on.
FOMO is another contributing factor to such poor financial decisions.³ Buying the new “it product” makes people feel like they fit in. However, trends are constantly changing, trapping consumers in an endless chain of buying. Use this to your advantage and expose the unrealistic conditions of these ever-changing trends.
Notably important for understanding the younger generations when it comes to impulsive shopping, is the agency of control impulse spending provides. When our emotions are out of flux or we are experiencing uncontrollable life changes, impulsive decisions act as an immediate sense of regaining control, something easily abused in the clutter of excess goods.³ Redirecting that immediate longing for power, marketers can help show consumers that patience and planning can provide a greater sense of control long-term.
While good marketing requires an understanding of human behavior, great marketing shares these findings with consumers, educating rather than keeping them in the dark. Is there a way to boost awareness and teach consumers ways to lessen triggers of impulsive purchasing habits? As corny as it sounds, knowledge is power. The most effective thing you can do as a marketer is give consumers the agency to come to a conclusion on their own.
Remember, when in doubt, flip it upside down. When you’re feeling stuck, challenge yourself to think about your marketing campaign in a whole new light. What wild connections can you make that might lead to new epiphanies?
Opening the can of worms
The realm of social media and the digital world have forever changed the shopping game, from added value to entertainment and flexible accessibility, to harboring copious amounts of poor shopping habits and impulsive behaviors. Often people don’t realize how their online spending might be impacting more than just their own bank accounts.
Digital impulse spending also harms the environment, increases overconsumption, and supports fast fashion. Keeping in mind that Gen Z aspires to shop with brands that align with their values, are you bringing these revelations to light in your advertising strategies?
In the storm of irresponsible purchases, credit unions can be the light. Marketing should reflect the various tools credit unions can offer to help install better spending habits. This may include
encouraging consumers to frequently check their bank statements, to create budgets, to compare prices, and to limit extra expenses. What other specific resources does your credit union grant? Perhaps an app tracker? Leverage leverage leverage.
By giving customers the power to make their own decisions, credit unions can act as a system of checks and balances; helping to free consumers of social media’s negative influences and restoring their control over their own finances.
Brand recall is key. Strive to dominate that top-of-mind space so that the minute consumers discover that unfulfilled need, the answer is already laid out in front of them. When you end the search before it begins, you monopolize a solution to that specific problem.
1https://www.forbes.com/sites/michelleevans1/2024/01/25/top-e-commerce-trends-changing-how-we-shop-in-2024/
2https://www.forbes.com/sites/jennmcmillen/2024/06/17/tiktok-shop-is-attracting-millions-of-consumers-7-facts-about-who-they-are/
3https://www.forbes.com/sites/traversmark/2023/12/11/a-psychologist-offers-3-tips-to-tame-your-impulse-buying-habit/
