It's going to be an Instagram Christmas

Key Points
  • Shopping is increasingly moving to mobile this holiday season, especially for younger customers.
  • Sixteen percent of consumers who plan to shop online later this year said they plan to use smartphones, up from 12 percent a year ago, according to a new survey from PwC.
  • In surveying Gen Z shoppers, PwC found 50 percent of those who plan to complete all of their shopping online during the holidays will use only a smartphone.
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Retailers, take notice: Shopping is moving to mobile, especially for younger customers.

This holiday season, Gen Z shoppers, or those people between the ages of 17 and 22, are expected to be browsing their Instagram and Snapchat accounts on their cell phones more than their computers in search of the perfect gifts — both for their friends and for themselves.

Altogether, 84 percent of shoppers young and old are expected to buy items online this holiday season, according to an annual survey of roughly 2,070 consumers by PwC. That's about the same as in 2017. Of those people who plan to shop online, 16 percent said they plan to use smartphones to shop, up from 12 percent a year ago, the survey said.

A lot is at stake. PwC estimates consumers will spend 5 percent more this holiday season compared with last year. The forecast is in line with many industry groups, which are predicting an upbeat end to the year. Shoppers are expected to spend an average of $1,250 on gifts, travel and entertainment, PwC said.

While desktop computers have historically been the primary method of browsing the web, this year smartphones are favored by many people, as retailers are starting to invest more in their mobile apps or are partnering with social media channels.

"Retailers' mobile web experiences have been greatly enhanced," Steve Barr, leader of PwC's U.S. retail and consumer practice, told CNBC. "They're removing friction from that process."

Mobile shopping was a key theme during the 2017 holiday season, breaking new records on days such as Black Friday. But spending via smartphones is only expected to grow bigger, according to industry analysts, as Gen Z gains spending power. That demographic is expected to comprise 32 percent of the global population of 7.7 billion by next year, ahead of millennials at 31.5 percent. And that generation is known to be tethered to smartphones.

In surveying Gen Z shoppers, PwC found 50 percent of those who said they plan to complete all of their shopping online during the holidays will use only a smartphone. The other half was divided among shopping on tablets, desktop or laptop computers and smart-home technology. Thirty-nine percent of those Gen Z customers said they will click through "buy" buttons to make purchases, while 25 percent said they prefer shoppable photos, like those on Instagram.

Instagram has been making it easier for users to shop from its site while making it easier for brands to get involved. Currently, the social media platform lets companies tag their posts with individual products (like a dress or pair of shoes). Shoppers can then click on the item, and the app will allow them to buy what's in the photo. Now, though, Instagram is working on its own standalone app for shopping, planning an even bigger push into e-commerce that would threaten other e-commerce companies such as Shopify.

Snapchat has also recently rolled out a feature that allows users to take a photo of an item and then buy it on Amazon.

On sites such as Instagram, Gen Z shoppers are also increasingly looking to so-called brand influencers to guide their purchase decisions, PwC said. Fifty-five percent of Gen Z customers said they pay attention to influencers whose lifestyles they aspire to, compared with just 41 percent of consumers overall saying the same, the consulting group found in its survey.

"These young people are finding their identity," Rob Holston, a global advisory leader of EY's consumer industry team, told CNBC. "They are the first digital-native demographic, and they can evaluate what's a true story versus what's just a story."

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