18 year-old Nadia Diakowska on the rising value of e-commerce
December 1, 2023
How social media influencers reshaped the global marketing landscape
E-commerce, which is the buying and selling of goods and services or the transmission of data via electronic networks, has been around for more than 40 years. However, it gained significant momentum around 2010, coinciding with the emergence of the first social media influencers.
E-commerce has revolutionised the shopping experience, making it more convenient and accessible to customers worldwide. Thanks to the widespread use of social media platforms by influencers to promote brands and products, e-commerce has taken on a whole new level of significance.
The industry is estimated to generate $21.1 billion in 2023, with more than half of e-commerce brands spending at least 20% of their marketing budget on social media influencers.
This trend gained popularity in 2009 when brands began investing heavily in influencers on Facebook and Instagram. They started opening “shop tabs” on their websites to allow social media users to purchase influencer-advertised products directly through the apps.
This changed not only the nature of social media services but also the facilitation and accessibility of e-commerce transactions.
In parallel with the rise of social media influencers, the value of the e-commerce industry saw a steep increase.
While the global e-commerce industry was worth around $25.8 billion in the year 2000, thanks to the popularisation of influencer-based advertising, the market’s value has risen to $6.3 trillion in 2023, accounting for 21.2% of total retail sales.
Apart from boosting e-commerce sales, social media influencers have also contributed to an increase in the quality of goods and services offered by various industries.
This is because businesses can engage with their customers in real time through social media platforms. They can receive feedback and share customer experiences online, which helps their understanding of the market to better meet buyers’ needs.
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The Power of Influencer Marketing in the Beauty Industry
For instance, Instagram’s beauty influencers have had a significant impact on the inclusivity of the makeup industry as a whole.
Many influencers raised awareness about the lack of shade range for foundations and concealers, which made it difficult for people of colour to find shades that match their skin tones.
This caused global outrage in the world of social media. Customers and influencers alike refused to abide by the unfairness and boycotted the firms by refusing to purchase their products.
In order to maintain high revenues, makeup brands were forced to respond by making their products more inclusive, increasing the quality of their goods and retaining their customers.
Businesses have also started targeting highly specific consumer pools by collaborating with particular influencers.
The personal nature of an influencer’s content makes it more likely for consumers to perceive it as authentic and reliable. This trust fosters a positive association between the brand and the consumer, leading to increased brand loyalty and awareness.
According to the Influencer Orchestration Network’s report, more than 80% of all consumers are more likely to buy products that influencers promote. Moreover, 33% of people said they would spend over $100 on a single influencer-promoted product, even without seeing it.
A think-tank report also showed that 57% of US adults use social media to discover new brands, while the rate increases to 82% among Gen Z adults.
Social media influencers have become crucial drivers of the economy, and their contribution to the global market cannot be ignored.
It will be interesting to see what new trends, opportunities, and challenges influencers will bring to the world of economics.
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