How Peer Recommendation Affects E-commerce Purchasing Decision of Generation Y & Z

At the end of 2020, millennials became the largest group of consumers, spending about $29–$143 billion on purchases. Unlike in the past generations, where most parents do not even make purchase decisions anymore, the current generation does.

Generation Y and Z represent the most significant percentage of the world’s population, and they rely on online sources for shopping inspiration. One thing peculiar to millennials is that they make decisions based on what their peers recommend.

Whenever they want to buy something online, they prefer to listen to what people in their age group say about the product. As an e-commerce store owner, whether you sell on Amazon or eBay, Shopify or Shoplazza, you need to know how to use this knowledge to generate income and grow your brand.

This article describes how the purchasing decisions of generation Y and Z are affected by peer recommendations.

They Prefer Mobile Shopping

An average Generation Y and Z member prefer to shop on their mobile devices instead of visiting physical stores. A recent study shows that 67% of younger and 46% of older millennials prefer to shop on their mobile devices, compared to 42% across all age groups. Many e-commerce store owners still do not know this secret, and they do not know where to direct their energy to get more sales.

If someone decides to patronize your brand and you do not provide a seamless mobile shopping experience, the person won't be motivated to buy anymore. Besides peer recommendations influencing purchase decisions, you also have to play your part as a store owner.

Make the shopping experience very easy and convenient for shoppers and visitors. If you’re able to improve your online store to be mobile-friendly such that potential customers find it easier to use, you can see significant changes in your business.

They Use Social Media a Lot

Social media influences purchase decisions and product descriptions among people who fall between the ages of 18 and 38. About 39.8% of people place social media among their top three mediums for ideas on products to buy. However, this is not surprising for a generation that spends most of its time on social media platforms like TikTok, YouTube, Instagram, etc.

Peer recommendations on social media influence purchase decisions. If someone uploads a picture of themselves wearing the best-fitting jacket online, followers will fall in love with it. Influencers use this as leverage to advertise products to their audience. If the person tagged where they bought the products, their followers would be tempted to patronize the brand. Even if they didn't tag the vendor, people could ask about it.

They Love to Share

Mobile and social media bunch make millennials more prone to sharing. Several social media groups and communities contain many Gen Y and Z members.

Whenever someone sees something they love or find exciting, they tend to share it with their friends, family, and acquaintances. If they buy a product and they find it very useful, they are most likely to preach about it to others.

As a result, there is a higher chance that friends and members of their social media communities will also try the product.

Final Thoughts

As an e-commerce store owner, understanding how business works will help you make the best decisions. Generation Y and Z have a strong influence on purchasing power, and they make up the largest chunk of the world’s population.

Millennials have the unique ability to influence their peers to make specific purchasing decisions. Therefore, you should take advantage of this and create target markets for this generation. This way, you can expect significant improvements in your e-commerce business.

(Contributed by Ayotomiwa Omotosho & Hermes Fang)