The Future of Social Shopping: What Retailers Need to Know About Gen Z and Millennials

After years of rapid growth, online retail businesses have reported an unexpected stagnation, especially in more developed economies like North America and Europe. After the initial boom of 2020 and 2021 caused by the pandemic, the ecommerce market is facing more challenges and not necessarily straightforward growth.

To help you navigate the evolving landscape of social shopping, we surveyed 8,000 consumers of all ages, as well as over 400 decision-makers. Combined with official national statistics, we put together a 2025 benchmark report on the state of ecommerce and the role of social media in its future.

A Cultural Shift Led by the Younger Generations

For Millennials and Gen Z, online retail isn’t just about the convenience of next-day delivery and single-click purchases. We’ve noticed a clear spike in young people prioritizing worthwhile experiences and engagement when shopping online, which has been akin to in-person shopping for a few decades prior.

The Numbers Are Clear

The rise in demand for social commerce isn’t based on an educated guess or prediction. 74% of Gen Z and 64% of Millennials in developed nations reported planning to use social commerce more in 2025.

For these generations that grew up alongside the ecommerce market, they expect brands to win them over through innovative and creative shopping solutions rather than only lower prices and faster delivery. With the rise of video-based content, reviews, and influencers, social platforms like TikTok and Instagram have become an integral part of the shopping journey.

Most Companies Are Falling Short

Despite social shopping gaining popularity, with 21% of all consumers saying they’d completed a purchase through a social media platform in the past 12 months, only 46% of online retailers support social commerce. They’re losing valuable market share to offshore retail giants like Temu and Shein, which are winning consumers over with exceptionally low prices and a strong social media presence.

A Closed-Loop Ecommerce Model

Previously, online retailers had to funnel users from all over the internet to their websites to secure a sale. Nowadays, younger consumers are more interested in a closed-loop model, where they don’t have to juggle multiple websites, accounts, and payment methods.

Whether it’s a TikTok Shop or an Instagram store, younger generations prefer the seamless blend of entertainment, scrolling, and product browsing. They no longer need to go out of their way to purchase a product if their credit card and address are already saved in TikTok.

Businesses Are Benefitting From Social Shopping

By sticking to social media marketing and commerce, you’ll be able to access all three types of internet shoppers:

• Frequent buyers
• Price-driven decision-makers
• Speed enthusiasts

With your catalog of options, discounts, and payment methods all in the same place, you minimize the friction that usually rules out hesitant or impatient consumers.

Sixty-two percent of younger consumers said they don’t have brand loyalty and would be quick to switch if their expectations aren’t met. While on the surface this appears to be a negative trend, you can use it to your advantage by being the retailer all younger consumers flock to when others fall short.

Understanding Your Target Demographics Is Key

Whether it’s Gen Z, Millennials, or Gen X, understanding who your ideal buyer is and what they’re looking for online is your best option for securing their interest. Download ShipStation’s 2025 Benchmark Report today to learn more about how to thoughtfully engage with the next generation of shoppers.