How Social Media Changes the Way Consumers Shop: Part One

Social media gives the average American more control over brand reputations. Consumers can now impact businesses by publicly sharing opinions and directly interacting with brands through social media platforms.

Over 50% of Americans spend more than an hour each day on social media, and during this time, users find and share information about brands to make smart purchases.

Read on to discover how peer interactions on social media can influence a consumer’s intention to purchase from a brand.

What is Electronic Word of Mouth (eWOM) ?

The formal definition of Electronic Word of Mouth (eWOM) was developed by researchers Hennig-Thurau, Gwinner, Walsh and Gremler stating:

“Any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet." (Journal of Interactive Marketing)

In other words, eWOM is a type of buzz marketing that relies on the online communication among peers to stir up conversation about a particular brand or product.

When you share a status to your newsfeed that you walked around the city in your new Steve Madden shoes without forming a blister, that is eWOM. Or when you message your Facebook group chat to tell your story about grabbing the last pair of sunglasses during Nordstrom’s Anniversary Sale, that is also eWOM.

eWOM has developed into a vast digital landscape made up of 3 main components - online reviews, peer pressure, and influencer marketing - that have changed the way consumers think and talk about brands.

Online Reviews

Print and commercial advertising was at one time the most effective marketing strategy for a product or brand. Now, consumers tend to distrust this industry, causing traditional advertising to lose much of its persuasive power.

Today, consumers turn to online reviews to receive honest communication, gathering real opinions from those who have shared their experience with a particular brand or product.

70 percent of consumers say they trust and are influenced by product reviews from peer communities on social media platforms, such as Facebook and Instagram.

Take a look at this Facebook review for a New Jersey wedding venue, Il Tulipano. The review is descriptive and provides information about the staff and bridal attendant. Not only will potential customers see this 5-star review, but they will also notice how the brand responded, which further demonstrates excellent customer service.

Peer Pressure

Peer pressure occurs when a person feels they must follow the actions, opinions, or behaviors of other people in a particular social circle in order to be accepted by them. You may think your audience won’t give into peer pressure but it’s actually a big motivation behind consumer purchases. Social media platforms encourage the creation and sharing of different forms of content, and people commonly mention products - whether intentionally promoting them or not.

Consumer trends typically circulate within regions or social circles. Think back to highschool fashion trends. High School cliques tend of have their own unique trends, which circulate among students in that circle for a period of time.

Likewise, peers tend to form online social circles where members are influenced by each other. Purchase trends circulate within these online social circles, causing subconscious influence on peers. Because of indirect peer pressure, brands should closely monitor online conversations that mention their name.

Influencer Marketing

Influencer marketing is similar to the peer pressure that happens among online social circles. Brands collaborate with popular social media accounts that generate a uniquely high number of loyal followers. The owners of these accounts have risen to online fame through the publicization of their hobbies, interests, fashion, or leadership in a particular industry.

Brands offer influencers incentives, like a paycheck or free products, just to tag the brand, review a product, or use the brand in posts without an obvious endorsement. These posts are essentially advertisements but more effective than traditional print ads because the audience trusts and looks up to the influencer.

An influencer post increases brand exposure by reaching a larger niche audience that the brand  may not have been able to reach otherwise. Take a look at the blogger in the photo above who collaborated with Nordstrom for its Anniversary Sale. Her post was shared 18 times, bringing the brand further exposure.

So there you have it folks. The power of peers is real and thriving among online communities. Brands have stepped up their game and found ways to incorporate eWOM into their own marketing strategies.

Stay tuned for Part Two of this blog series where we will look at how a brand’s online personality can affect customer loyalty.