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Social Media Critical for Securing Consumers Under 40, Study Says

Despite the rapid growth of social media, many companies are just beginning to grasp the power of influencers, noted Kevin Brown, the chief marketing officer of Onbe, a payments partner for several brands.

“To build loyalty, brands must meet audiences where they are – and, in most cases, that place is on social media,” said Brown, in a recent company statement. “Influencers are able to step into that space and bridge the gap between brands and the people they’re trying to reach in a unique, highly personal way.”

New research reveals more than 70% of millennial and Gen Z consumers have made a purchase based on content from “influencers” – social media users who have an established credibility and can often persuade others to act on their recommendations. Furthermore, a new national study, conducted by Onbe, surveyed nearly 1,000 American consumers between 18 and 40 years old and found the most impactful way to build loyalty and awareness with today’s young consumers is through engaging, branded digital experiences.

Simply put, today’s young consumers are heavily swayed by how brands connect with them across digital platforms, most prominently through influencer marketing and digital rewards. Even so-called “micro-influencers” on social media can significantly impact consumers.

While most companies are well-aware of the massive buying power of millennials and Gen Z consumers, a majority of them lack the actionable insight necessary to transform potential customers into brand loyalists, Brown said.

Onbe’s study found that social media influencers can significantly increase brand loyalty. Among the study’s noteworthy stats along those lines:

  • More than 70% of millennial and Gen Z consumers have made a purchase based on an influencer’s suggestion
  • 50% of young consumers have changed to a new brand based on an influencer’s recommendation
  • 40% of millennials and 57% of Gen Z have made a purchase on Instagram based on influencers’ suggestions

Onbe’s study also found that millennial and Gen Z consumers increasingly prefer digital rewards. Specifically, today’s young consumers typically prefer online incentives, including:

  • Both millennial and Gen Z consumers prefer to receive virtual cards over physical cards, or those that can only be used for a single retailer
  • 90% of both groups are likely to spend reward payments with the same brand that offered them a reward
  • 80% of both groups say special promotions make them more loyal to a brand

For more on Gen Z, check out the June edition of The Food Institute Report, analyzing:

  • The unique demographics of younger consumers
  • The latest research on Gen Z purchasing trends
  • Factors impacting Gen Z decision making
  • Market opportunities as Gen Z comes of age

To download the report, click here.