Gen Z, Millennials Will Drive Social Media Spending to $1.2T

The social commerce industry is expected to reach $1.2 trillion by 2025––three times faster than traditional e-commerce.
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Gen Z and Millennials are leading the social commerce charge as the primary users of social media. The growth, which was projected in a new study from Accenture, attributes 62% of social commerce spend by 2025 to these two generations. Social commerce refers to when a person’s entire shopping experience, from product discovery to the checkout process, takes place on social media.

Digital Connection Meets Commerce


Nearly 2 billion social media users, or 64% of those surveyed by Accenture, said they made a social commerce purchase in the last year. That’s a big boon to the retail industry, which initially suffered during the early days of the COVID-19 pandemic. As consumers have spent more time at home during the pandemic––and on their phones––social commerce has taken off. 

Social commerce has offered an alternative to traditional e-commerce by integrating into all aspects of everyday life, with an added sense of community and connection fostered through social media. Without being able to see friends and family in person, Americans turned to virtual solutions. The study found 63% of respondents feel connected with friends and family virtually while 42% feel connected using virtual experiences.

accenture infographic

As more of the world uses social media, commerce will continue to increase its mix with news, entertainment and communication on these platforms. Currently around 3.5 billion, or 44% of the world’s population uses social media, representing big opportunities for brands and retailers to capture not just Millennials and Gen Z users, but all consumers.

“The pandemic showed how much people use social platforms as the entry point for everything they do online––news, entertainment and communication,” Robin Murdoch, global software and platforms industry lead at Accenture, said in the study. “The steady rise in time spent on social media reflects how essential these platforms are in our daily life. They’re reshaping how people buy and sell, which provides platforms and brands with new opportunities for user experiences and revenue streams.”

Level Playing Field


Social commerce is also likely to help small businesses and brands, not just major retailers. Small brands can connect directly with consumers through social media with authenticity, according to the study. 

“It's nothing short of a people-powered democratic retail revolution,” the study found. “And it's incredibly effective. Why? Because it seamlessly blends social experiences and e-commerce transactions through a single path to purchase, all enabled by a single platform.”

More than half––59%––of social buyers said they are more likely to support small- and medium-sized businesses through social commerce than when shopping through e-commerce websites. Another 63% said they are more likely to buy from the same seller again, meaning social media can also help brands build loyal customer relationships.

“Social commerce is a leveling force that is driven by the creativity, ingenuity and power of people. It empowers smaller brands and individuals and makes big brands reevaluate their relevance for a marketplace of millions of individuals,” Oliver Wright, global consumer goods and services lead at Accenture, said in a statement. “Getting social commerce right will require creators, resellers and brands to bring their products and services where the consumer is, and will be, rather than the other way around. It means working together within a dynamic ecosystem of platforms, marketplaces, social media and influencers to share data, insights and capabilities to deliver the right incentives and best consumer experience across an integrated digital marketplace.”

However, there are some remaining concerns that social commerce purchases will not be protected or refunded properly, leaving brands with a trust barrier to overcome with new customers. 

accenture social commerce markets

Top Opportunities


With such huge growth over the next few years, there are some retail categories set to explode, the study found. 

Clothing is expected to increase the most among social commerce purchases, capturing 18% of all social commerce by 2025, followed by consumer electronics (13%) and home décor (7%). Fresh foods and snack items represent a large product category with 13% of total purchases, although those sales are almost exclusively within China. Another up-and-coming area is beauty and personal care products.

Looking ahead, 16.7% of the $7 trillion e-commerce total will be attributed to social commerce by 2025, with China leading the way. The U.S. will also see major growth, with social commerce more than doubling to $99 billion by 2025. The opportunities are big for brands and retailers, but also likely a win for consumers.

“As brands, retailers and platforms make their plans, one thing has to be at the center of their strategies, and that's people,” the study concluded. 

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