Keywords

2.1 Introduction

Instagram keeps the consumer informed about trending products. It's a perfect tool for competitor analysis and gives customers a variety to choose from. With everything just being a click away, it’s easier to keep tabs on the competition. For the companies, one must note that by using tools such as social blade, one can assess a lot through just an Instagram handle. All statistics of engagement, money earned, new followers, average comment rate, etc., can be determined (Agrawal 2022).

In terms of brand visibility, Instagram marketing is fantastic. According to survey participants, Instagram’s posts and reels make it easier for them to find new goods or services (Sun et al. 2022). Due to the extension of latitudinal interaction with a business on Instagram, people have greater faith in the brands that are promoted there. In contrast, multiple studies also discovered that firms without an Instagram account are more likely to be ignored in the present and the future by potential customers. A brand can benefit much from enhancing its standing and clearing the air. Fashion Nova, Lush, Lea Clothes, and other companies have made significant use of social networking. Some companies have successfully displayed their product categories and gained customers.

One of the things to notice is that the above-mentioned brands are not just merely advertising but creating a brand community. These communities have become stronger after the Covid-19 era as many users followed their favorite brands closely for updates and other relevant information. It’s not just enough to be present on Instagram. But there is an algorithm to understand (Bellaaj 2021). The base of it includes engaging with your followers, posting quality content that is on par with the trends on the internet, and maintaining a balance using tools such as Instagram stories, posts, reels, guides, and shops. Previously, content creators could put up longer videos on IGTV, but now the IGTV format has been discontinued.

Instagram over the years has a trial period for each of the functions that it has to offer. To encourage brands and influencers to continuously upload quality content, Instagram now offers monetary benefits. The benefits are achieved when there is a continuous effort put into delivering quality content. A customer experience is extremely hyped up once they are noticed, Gen Z are often seen engaging with their favorite brands and influencers.

According to HubSpot (Instagram engagement report, 2020) where 81,258,182 In order to comprehend a number of criteria, Instagram posts and 1,676,748 of the top users were being monitored. Engagement, influencers, and caption length are a few important findings that have considerable significance for any company looking to sell itself successfully. The following are some of the study's major highlights: More people liked reels and photo posts than permanent video posts on a page, 27.55% more. On Instagram, a post includes 10.7 hashtags on average, although 50% of posts have fewer than 6 hashtags. The pages devoted to beauty and cosmetics receive the highest engagement. 52.3% of Instagram users follow fewer than 1000 additional users. One of Instagram's most fascinating features is the geography tag, which lets your followers know where you are (Król and Zdonek 2021).

Below is a list of compelling statistics by HubSpot that makes Instagram marketing and purchase decisions of Gen Z, a brilliant topic of study for the current market environment, especially post covid-19. Screen time has increased and so have consumption patterns. These are some statistics to keep in mind:

  • Instagram has over one billion active users.

  • 64% of the users are between the ages of 16–34.

  • 52% of Instagram users are female and 48% male.

  • Influencer marketing grew by 48% in FY 2020–2021.

  • There are 8 million plus business accounts.

  • 84% of the Instagram influencers are female.

  • 7 out of 10 hashtags are branded keywords.

  • 500 million users use Instagram stories every day.

After going through the facts, one thinks that only a beauty or a lifestyle brand has a chance for recognition. This is highly untrue; there are new trends emerging for every kind of customer out there. Knowing your customers is now simpler than ever, and data collecting has been quicker. Businesses may use Instagram to connect with the right customers and experience exponential brand growth. Whether it's a B2B corporation or a charity (Baykal 2020). A brand must, however, be aware of the shifting trends and how they may affect its product marketing plan.

Many businesses find it suitable to promote on Instagram. The estimated number of advertisers per month is around 2 million advertisers on Instagram. the approximate audience that is present is about 1.32 billion users. This means that it roughly reaches about 23% of the global population aged 13 and older. 48% of Instagram users are observed to be men and 52% are women. Instagram is the 7th most visited website and the 9th most googled term. It is also the fourth most used social media followed by WhatsApp, YouTube, and Facebook. It has become the second most downloaded app in the world and there are many reasons that add up to making it such a desirable platform to sell and advertise (Dorie and Loranger 2020). Therefore, it becomes very important to discover how Gen Z’s purchase behavior is on Instagram relevant to today’s time and marketing practices, Gen Z was the population taken for the study, Primary data was collected from the respondents using the structured questionnaire using Likert scale and secondary data was collected from various publications web pages, books, and newspapers. The hypothesis was formulated to address the research questions and specific statistical tools like regression and ANOVA tools were used to analyze the data.

The Present study is structured as follows.

2.2 Statement of the Research Problem

The problem forms a triggering force behind any research work. In more recent times, there has been an increase in the way Gen Z consumes technology. The pandemic (Covid-19) pushed innovation in terms of technology and product development. Many believe that this period has made people more tech-savvy but has introduced a problem of overbrowsing, but it is a great opportunity for marketers to get noticed. There is a huge shift from offline to online markets that needs to be studied. There are multiple avenues available to today’s customers. It’s not like the earlier times when it would be impossible to address grievances, shop from non-traditional platforms, and discover unique forms of promotion or activities. In today’s world, it takes a lot to convert a customer. And Generation Z is not easy to please, it takes more than just normal advertisements to convert them into potential customers. The way we interact on Instagram has completely changed. The worth of a product is challenged and creative ways are used by businesses and Instagram influencers to understand their audience. Traditional marketers have now realized that one channel is not enough to achieve success (Hameed and Mathur 2020). There are many aspects to take care of on Instagram in order to be a visible brand for, e.g., trending hashtags, influencer genre, and high engagement rates are some things that brands extensively research. This research aims to understand Instagram influencers and how they affect the purchase behavior of Gen Z. It is observed that there are various marketing strategies for various groups. In the past, there haven’t been many studies that have been conducted on GenZ purchase behavior when exposed to social media. It is a field that can be discovered further and make a clear decision for marketing managers whether or not to use Instagram marketing as a tool to promote their business. There is a gap in understanding the value of brand engagement, the use of micro-celebrities, and influencer marketing which has to be understood before coming up with an annual marketing budget (Herrando et al. 2019).

2.3 Review of Literature

Agarwal (2022) summarized that at the end of the twentieth century, many things altered as a result of the advent of digital technology, including people's psyche. The buying and shopping interests of consumers have changed over time. The Internet, smartphone-led digital technology, and mobile applications have caused a sizable portion of the population to switch from traditional markets to online channels. More information is given to the buyer in this way than at a physical store. The newest and hottest trends have an impact on people. Shoppers who are tech-savvy are members of the Y and Z generations, who were born between 1981 and 1885. An examination of generational cohort-based buying provides valuable insight into consumer motivations and online purchase involvement that were influenced by shared values and beliefs.

Sun et al. (2022) studied that China is a sizable market that accounts for one-third of the worldwide market for luxury goods. By 2025, Chinese consumers are expected to contribute RMB 1 trillion to global luxury sales according to further research into the buying patterns of Gen Z consumers. Additionally, since the 1990s, digital marketing and internet sales have surpassed traditional ones due to technical innovation. Social media has a significant impact on retail trends and consumer behavior. By 2025, internet contact will have an impact on the consumption of luxury goods. Luxury companies and stores are motivated by this to comprehend the demand created by Instagram alone. Brands now place a high value on a Gen Z user's digital presence. Instagram is assisting on a global scale.

Bellaj (2021) studied that e-commerce presence is increasing a lot in today's environment. A digital channel is known as a digital shopping format that is provided to consumers by retailers to give them an online shopping experience. Digital Channels have transformed how marketing activities take place and how to manage customer relationships, especially for online businesses. Entrepreneurs now apply digital technologies to increase aspects of their business activities. As reported recently, more than half of the world's population now uses social media and there are more than 150 million businesses that use Instagram, WhatsApp, and Facebook. More than 100 million businesses interact with their customers via Instagram. Digital channels help businesses collect and manage data. It's easier to connect information about the customer now. Social media is now used for creating, strengthening, and enlarging business networks. Entrepreneurs use digital networks to enhance their brand visibility, improve relationships with their existing and future customers, and expand their market share. Digital channels help a business generate value and improve business performance. Reports suggest that digital channels act as a backbone for businesses in emerging economies.

Krol and Zdonek (2021) studied social media use and its impact on intrinsic motivation in Generation Z. Gen Z is a very different type of target audience when compared to other audiences. The same kind of advertising efforts that were done before are not very applicable to today's audiences. Mobile phones have become the number one place to receive content. ICT information and communication innovations have increased the experience of online organizations. It is a time where every organization should optimize their resources using modern solutions which brought a revolution to business market communication. Social media is a contributing factor to this process. Information is ready and accessible in today's time. Gen Z interacts I'm a certain way, they stay connected via the internet, and social media for communication purposes. This consumer group is active in nature, who with the help of online platforms share information, look for entertainment, etc. Therefore, in this study, it was important to understand the frequency with which social media platforms are used and how they are used as a tool for communication in the years to come.

Dorie and Loranger (2020) studied the multi-generation differences in channel activity. The retail market has become increasingly competitive, retailers now realize that there is an urgent need to connect with the customers through a wide range of channels that act as touchpoints between the retailer and the customer. Many retailers want to research and understand how shopping patterns vary. It’s not just about Brick-and-Mortar stores, the younger generations are riding a wave of online shopping. Many customers use mixed channels for their shopping interactions but there is a significant growth in online channels. When a customer gets the freedom to interact via social media, phones, and tablets they get a better insight on their choice of brand. Pew Research (2018) has found that Generation Z, millennials, and baby boomers owned smartphones at rates 92,85 and 67%. Instagram has a total of one billion active users making it an engaging platform for both businesses and users. There has been a rise in the number of channels available to a customer, and hence it has become increasingly important for a marketer to understand the multichannel behavior.

According to Baykal (2020), these days, there is a massive change in which the marketplace functions. Customers look for improved experiences where it's fully focused on them. The marketplace has become more responsive to customer needs. The omnichannel concept is a way of blurring lines between the online and physical stores. Customers look for a mix of both omnichannel environments, they have a choice to move freely among online and physical stores and expect a level of professional seamlessness. After looking at various generations, it was found that GenZ deserves a separate marketing campaign. These include the rise of omnichannel experiences. Technology has advanced how the retail sector functions. Consumers are not just limited to the product, but also look at information from different sources and often use a pattern of multiple channels for shopping, stores, and browsing the internet.

Hameed and Mathur (2020) researched that India has the second-highest population on the entire planet. The greatest Gen Z population in the world is estimated to be 472 million people, according to Hameed and Mathur (Hameed and Mathur 2021). The distribution of Gen Z's demographics has changed. They are more politically and socially conscious, have new job objectives and prospects, and have distinct workplace preferences. Also, as a result of these features, consumption is altering. Gen Z has distinct thoughts and ideas about how they might contribute to the economy of India, according to a study that used focus groups to analyze how consumption patterns differ.

Herrando et al. (2019) studied that social media commerce has gained a lot of attention lately. Social commerce websites have a unique feature where there can be an exchange of information among various customers. This kind of system is a mix of social media, e-commerce, and social networks. They receive information from trustworthy sources. Websites generate information for a company and help them to influence other users’ purchase decisions. Consumers these days depend on online information for better-informed decisions. Product reviews have become extremely important to assess the quality beforehand. 78% of online users are influenced by social media and many were engaged with feedback and reviews. The kind of purchase that takes place in social commerce is different from regular e-commerce. This reason for differentiation is because of the participation aspect since users can generate content and share their feedback. The purchase intention of a Gen Z consumer is based on hedonic, utilitarian, and social values. Social media marketing has flourished because of the expansion of social media. (Instagram, Facebook, Twitter making customers feel heard. Brands now have a greater chance to reach their target customers. Brands have a multichannel way of promoting special offers. They advertise with their own media pages but also hire and collaborate with influencers to promote products and special discounts. Social media has become popular after some creators found a substantial number of followers by producing content on a daily basis (lifestyle, technology, beauty, and fashion) which makes their fans relate to them better.

2.4 Research Gaps

Our potential research gap is the studies done on Instagram's Influence and purchase decision of Gen Z. There are no long-term studies that have been done in order to understand the two. Many existing studies have focused on business aspects, luxury marketing, and tools used by Instagram. But there is a rise in the need to understand why there is a need to study a specific generation, their buying habits, and brand exposure on Instagram. This could help businesses on Instagram understand the buying behavior of their target audience.

Another gap would be in the relationship of the location of the customer and their buying behavior. It is important to understand how urban and rural area customers are different from one another when it comes to purchasing habits. There are very few studies done on GenZ that stay in Rural areas or Tier 4 cities of India. Many businesses and influencers struggle to have a metric or a way to measure the success of a social media campaign. A lot of concepts such as bounce rate, significant amount of time spent browsing, and leads can’t be accounted for.

2.5 Research Objectives

To study the demographic profile of the respondents and study similarities in the way they interact with Instagram.

To understand the factors that influence the purchasing behavior of Generation Z (Age 8–23).

To know about how the brands are leveraging social media to increase brand awareness and increase sales conversion.

To understand the increased consumption and interaction on Instagram post Covid-19 and dependency on technology.

2.6 Methodology

The research is descriptive in nature. Gen Z was the population taken for the study and Eighty-Six Gen Z samples were randomly chosen and reprinting the entire population. Primary as well as secondary data sources were used to collect the data. Primary data was collected from the respondents by the structured questionnaire using the Likert scale, and secondary data was collected from various publications’ web pages, books, and newspapers. The hypothesis was formulated to address the research questions and specific statistical tools like regression and ANOVA tools were used to analyze the collected data, analyzed, interpreted, and presented in the report as research findings.

Hypothesis 1

H0: There is no significant association between the type of product and the channel used.

H1: There is a significant association between the type of product and the channel used.

Hypothesis 2

H0: There is no significant relationship between time spent on Instagram based on gender, age, and location.

H1: There is a significant relationship between time spent on Instagram based on gender, age, and location.

CHI-SQUARE TEST: The chi-square test, a statistical method, is used to compare actual results to forecasts. This test seeks to establish if a difference between actual and projected data is the result of chance or a relationship between the variables under investigation. As a result, the chi-square test is a fantastic tool for assisting us in understanding and assessing the relationship between our two category variables.

A chi-square test or similar nonparametric test must be used to examine the distribution of a categorical variable. Categories like nations or animals can be indicated by nominal or ordinal categorical variables. Since they can only have a few particular values, they cannot have a normal distribution. For example, a marketing firm in India wants to find the relationship between the link the product type purchased and the Instagram channel used to gain awareness. It is mainly used to calculate two categorical variables, which are:

  • As a result of chance

  • Because they have a relationship between them

The formula for Chi-Square Χ2 = ∑ (O − E)2 / E.

where C = Degree of freedom, O = Observed value, and E = Expected value. The number of variables that can change in a calculation is represented by the degrees of freedom in a statistical calculation. It is possible to determine the degrees of freedom to make sure chi-square tests are statistically reliable. These tests are typically employed to contrast the observed data with the data that would be anticipated if a specific hypothesis were to be correct. The values you compile on your own make up the observed values. Based on the null hypothesis, the predicted values are the anticipated frequencies.

A statistical test called chi-square examines how categorical variables from a random sample differ from one another to determine whether the results are consistent with what was anticipated. The following circumstances call for the application of the Chi-Squared test:

The Chi-squared test can be used to check whether your data resembles a well-known theoretical probability distribution, such as the Normal or Poisson distribution. The Chi-squared test can be used to assess the goodness of fit tested regression model on the training, validation, and test data sets. The chi-squared test is the procedure used the most frequently to evaluate hypotheses. A claim that any given scenario might be true can be tested later and is known as a hypothesis. The Chi-Square test determines how much of a difference there is between the expected and actual results when the sample size and the number of variables in the relationship are given.

These tests use degrees of freedom to determine if a certain null hypothesis can be rejected based on the total number of observations made throughout the experiment. The larger the sample size, the more dependable the result.

To understand the dependency of place and selection of brands, the Observed Values and expected values are shown in Tables 2.1 and 2.2.

Table 2.1 Observed values
Full size table
Table 2.2 Expected values
Full size table

X 2 = 6.4178.

Number of Rows = 5.

Number of Columns = 5.

Degree of Freedom = 16.

The calculated value is more than 0.5 so the null hypothesis will be rejected. So there is an association between the type pf product and the channel used.

Hypothesis 2

H0: There are no significant effects on time spent on Instagram based on gender, age, and location.

H1: There is a significant effect between time spent on Instagram based on gender, age, and location.

Regression Analysis: Regression analysis is a statistical technique for examining several variables and determining which variables can have an impact on an aim (such as the success of a product launch, company expansion, or a new marketing campaign.

Dependent Variable: Y

All requested variables were entered.

Predictors: (Constant), X3, X1, X2.

Dependent Variable: Y

Inference: According to the above statistical tool Regression analysis, through Tables 2.3, 2.4, 2.5, 2.6, and 2.7, Y is the dependent variable and X is the independent variable.

Table 2.3 Variables entered/removed
Full size table
Table 2.4 Model summary
Full size table
Table 2.5 ANOVA
Full size table
Table 2.6 Coefficients
Full size table
Table 2.7 Residuals statistics
Full size table

Y (Time spent on Instagram) = X1(Age) + X2 (Gender) + X3 (Location).

Y (Time spent on Instagram) = 0.076 X1 + 0.045 X2 + 0.020 X3.

Y = 0.141.

As the P value is less than 0.05, the null hypothesis will be rejected, and accept the alternate hypothesis There is a significant effect between time spent on Instagram and gender, age, and location.

2.7 Findings

The majority of the Gen Z population 36% spends a considerable amount of time between 3–4 h on Instagram, followed by 29.1% spending between 5–6 h.

Majority of the respondents (76.7%) have been exposed to Instagram shopping.

The top three reasons why the purchase is being made by respondents on Instagram is because of trending designs, cost effectiveness, and the overall quality.

More than half the respondents 50% recommend products from Instagram to friends and family.

It is observed that respondents 24.4% have spent between INR 3000–4000 and 23.3% have spent at least between INR 1000–2000.

It has become very important to have a brand presence on social media. In the survey, 47.7% are influenced by the presence of the brand on Instagram.

More than 50% of the respondents believe that Instagram gives exposure to new products and services.

2.8 Limitation of the Study

Since Instagram keeps changing its functionality, it’s difficult to keep the research relevant.

Time constraints, if the research is conducted over a period of year, then there is a scope for better data analysis and increasing sample size.

Collection of data is very tough so it is done through random sampling. There is a possibility of error while taking the samples.

Money is a constraint as investing more money in the research could have increased the number of respondents.

2.9 Conclusion

Gen Z is a very different and unique market. They are more aware of the situations happening around them. Internet runs because of what’s trending and it is an amazing way to promote goods and services. Instagram has become a platform to interact and discover product offerings. Many small and medium-size businesses depend on Instagram for brand awareness. It works better for some businesses than others. People are made aware of products through various channels of Instagram such as reels, shops, posts, stories, and advertisement links. Influence is a factor that is relevant to many product categories such as beauty, footwear, apparel, and travel. Opinion leadership is a trend that has been seen on social media time and again. Influencers pick their niche, work with brands under that niche, and help market the product. Furthermore, screen time is an important aspect when it comes to analyzing purchase behavior. The more an individual spends time on Instagram, the more they are exposed to the product. Trends are what run the internet today. Be it the Y2K fashion, unique product offerings are all brainchild of social media. The potential to earn through Instagram has become enormous. Brands really need to jump on the bandwagon if they want to get any sort of benefit from Instagram. It has become a marketplace that no one would have imagined some years ago. From a mere social media platform to an all-rounded market, Instagram has come a long way. Gen Z is the main generation that has pushed this growth forward and created a new stream of demand for sustainable and trendy products. It's not just about selling anymore. It’s about sustainability, responsibility, presentation, and so much more.

2.10 Scope for Future Research

Different generations interact differently with social media. It is a very exciting avenue to compare different generations and their buying behavior. Very big scope as all companies is very invested in social media and how it can turn their business around. It is an opportunity for marketers to understand how Instagram has become the top influencing application that helps millions of businesses generate revenue. Promotion on social media is a growing industry with a net valuation of $2 Billion in 2022. Social media will become more integrated into the personal, social, and business life of an individual. It is just the beginning of an era. Instagram is expanding with the meta universe. Researchers have found that, by 2039, important aspects of planning, business, and life for all individuals will be via social media.