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Consumers Are Making Purchases Via Instagram And TikTok

Updated: May 14, 2022

The pandemic accelerated the shift to omnichannel purchasing—the tendency for consumers to purchase items through Instagram, TikTok, or a brand’s website, on top of visiting a traditional brick-and-mortar shop.

That was the takeaway from Fortune’s Reimagining Customer Experience virtual summit on Monday with top executives from brands such as Stitch Fix, Build-A-Bear, and Signet Jewelry.

Most brands were already aware this was coming down the pike, but hadn’t fully embraced until every American consumer was suddenly trapped at home with fewer opportunities to spend money in person.

See how online sales happen

“Our research tells us 90% of sales start on a mobile phone,” said Fran Horowitz, CEO of Abercrombie. But here’s the catch. Shoppers aren’t just typing “Abercrombie” into a search bar and aiming to shop from a brand they know and trust.

Instead, buyers are catching wind of fashion trends on social media, then clicking through an influencer’s or friend’s page to purchase.

“Social commerce and social selling is the future,” Horowitz added. “That’s where this consumer is headed, and you have to make sure you’re on these channels. The consumer believes their customer more than they believe the brand anymore.”

Companies Saw Their Revenues Grow With Online Sales

Other companies saw unexpected growth from consumers looking to make connections with loved ones from afar. Build-A-Bear CEO Sharon Price John said that was the case for a company that has long considered itself a mall-based, experiential retailer but saw triple-digit growth in 2020 as it leaned into online offerings.

Build-A-Bear launched a 3D bear builder, which is an animated experience in which you can build a stuffed animal from your phone, and the company soon learned its shopper demographic was changing.

“Now 20% of our sales are online,” John said. And as Build-A-Bear celebrates 25 years, she said the company realized that 40% of their total sales are from teens, tweens, and adults rather than adults buying on behalf of children, which had been the norm.

People wanted to send love to people [during the pandemic] so the gifting category started to pop up for us,” John said. Build-A-Bear launched "Heart Box" to lean into that space, which includes not just a stuffed animal but aso accessory items like tea and candles in a gift box.

Many Companies Are Being Discovered By Customers Through Social Media

Nadia Boujarwah, cofounder of Dia & Co, a plus-size fashion company that offers personal styling, said one advantage for U.S.-based companies amid the pandemic was that they need not reinvent the wheel to meet customers in this new virtual age.

“In reality, we don't need that much imagination in the U.S. to imagine what comes next because we’re so far behind other consumer markets,” she said.

Part of that was the shift away from search-driven purchases. Companies like Dia & Co are being discovered through word of mouth or social channels. Consumers are stumbling upon products, in other words, versus seeking out something they need or want. And in order to compete in that market, companies need to have a presence across all channels.

Some Customers Still Go To Physical Stores To See The Product In Person, But Make The Purchase Online