Investigating the influence of reference groups on Generation Y's social commerce buying behaviour

Abstract

Consumer behaviour is the essence of marketing. It is the most important factor for marketers to understand and comprehend. Having a thorough knowledge of how a certain target market behaves allows businesses to tailor their activities accordingly and enables them to fulfil specific consumer needs. The internet and social media are becoming vital for a successful business model. Various environmental factors have led to the rise of e-commerce. Social commerce is a new type of e-commerce where products and services are bought and sold via social media platforms. Social commerce is presenting attractive opportunities for businesses to improve their marketing endeavours and profitability levels. Generation Y is the largest generational cohort and are frequent users of the internet and social media platforms. Staying connected with friends and family by means of social media is of great importance to Generation Y. Reference groups to whom consumers refer to and consult when making purchase decisions, play an important role in determining the behaviour of this generation, especially via social media channels. The purpose of this study is to investigate the influence of reference groups on the buying behaviour of Generation Y on social commerce platforms. Existing literature fails to examine the influence and importance of reference groups on Generation Y’s social commerce behaviour. Hence, this study investigated various aspects regarding the influence of reference groups on Generation Y’s social commerce buying behaviour. The study was conducted by implementing a qualitative approach and made use of an exploratory research design. A non-probability judgement sampling method was used in order to recruit participants. Data was collected by means of three focus group sessions, comprising a total 26 participants. The data was analysed by means of the Morse and Field approach and ATLAS.ti was used to code the data as well as for categorical and thematic analyses. Consequently, four themes were identified, which comprised of 13 categories. The results indicated that reference groups do indeed influence Generation Y’s buying behaviour on social commerce platforms. Family and friends are considered as their primary reference group due to the high level of trust they have with these referents. Influencers are also regarded as a primary reference group of Generation Y. Reference groups have a strong influence on the approach and avoidance behaviour of this generational cohort.

The preferred social commerce platform of Generation Y is Instagram, followed by Facebook Marketplace on which they mainly purchase electronics, clothing, and other items perceived to be less expensive. Generation Y predominantly make use of social commerce platforms to search for information and read product reviews, but hardly leave reviews or make actual purchases on these platforms. Due to the strong preference of Generation Y for buying products online, it is recommended that businesses who target this generational cohort make their products and services available online. It is further recommended to utilise Instagram and Facebook Marketplace when making their offerings available on social commerce platforms. Family and friends, as well as influencers who appeal to the Generation Y cohort should be recruited and incentivised to advertise products and services to Generation Y, seeing that these are the two primary reference groups of the generation cohort.