The Download: According to newly released data by American Express, social media love generates 23 percent of revenue—$197 billion—for small businesses. In the same study, released in advance of Small Business Saturday, on Nov. 28, Amex found that 89 percent of consumers are more likely to shop at a small business that friends recommend. And 78 percent of the owners say that social media endorsements are a significant driver of business.
The Outlook: Consumer skepticism of commercials and digital advertisements has elevated the power of social media shoutouts and turned platforms like Instagram into a digital shopping mall. Earlier this year, Instagram swapped out the Activity tab for Shop and added a check-out feature, and Facebook, which owns Instagram, launched Facebook Shops. The influencer marketing industry is on track to be worth up to $15 billion by 2022, up from as much as $8 billion in 2019, according to Business Insider Intelligence estimates.
In Their Words: “Word-of-mouth from peers matters, because they’re felt as authentic and genuine. There’s less of a perception of authenticity from a celebrity. However, in general, what it lacks in authenticity, it compensates for in the desire to emulate. I wish I was like Brad Pitt. One step closer to being Brad Pitt is drinking the same coffee he does,” says Luca Cian, a professor at the University of Virginia’s Darden School of Business.
Surface Says: Though sometimes it feels that Instagram is following your every move, maybe it’s worth tagging where you got your new pair of sweatpants.