With life for retailers set to change forever post-pandemic, we could find that some of the assumptions of recent years have to be replaced, especially when it comes to customer engagement. A new Yotpo study suggests that the age of influencer marketing is, if not yet over, about to take a back seat to social media ads and user-generated content (UGC).
The e-commerce marketing platform conducted a study among retailers’ e-commerce directors across Europe and found them saying that while influencer marketing currently yields the most return on investment (ROI), they expect this bubble to burst. They predict that social media ads and UGC will deliver the most ROI in 10 years’ time.
Many brand creative campaigns have been on hold due to Covid-19 and retailers have been getting creative with various forms of UGC, like content from influencers, reviews and ratings, customer photos, and videos. So these are all playing a much larger role in brand marketing today than they might have done without the pandemic.
But even before the pandemic, the study shows that the amount of UGC in marketing strategies almost tripled in the last 10 years as almost nine in 10 respondents agree that it increases conversion rates. And the trend seems to be towards UGC from customers rather than influencers.
Only 6% of the e-commerce leaders surveyed expect influencer marketing to be the most effective form of marketing in the next decade. That compares to 52% at present.
THE BIG CHANGE
The retailers are predicting by a big majority that social media advertising and UGC will effectively replace influencer marketing. More than two thirds (67%) predict social media will become the most effective strategy, compared to 28% today. And while some UGC comes from influencers, more than a quarter (27%) of respondents say that UGC from customers is poised to take the lead within 10 years, compared to 14% now.
While much of the talk in the report was about UGC, the relevance of social media ads could be seen from the fact that 95% of respondents said they’re already using UGC in social media posts. And paid social media posts came top of a list outside of retailers' own websites where they display UGC.
Some 88% of the heads of e-commerce agreed that UGC increases conversion rates. And for many, that UGC means reviews. Retailers believe that building consumer confidence with authentic reviews is important as shoppers are 48% more likely to return to a site after seeing UGC.
But it needs to be the right kind of UGC. For instance, one-word reviews don’t have much of an impact. “While one-word reviews certainly won’t hurt your business, they’re not nearly specific enough to help drive a purchase decision. In order to generate more useful reviews, send out review requests with prompts related to specific topics, like quality, fit, shipping, and so on,” the report advised.
The same is true for visual UGC. Customer photos are highly influential — 77% of shoppers prefer them to professional photos. “That being said, there’s no guarantee that customers will get your aesthetic right when uploading their own photos, which can ultimately be harmful to your branding,” Yotpo added. “In order to gather visual UGC that you can actually use, offer guidelines when asking customers to submit photos — such as photographing your products against a plain background, outside, with a specific filter, etc.”
And of course, it’s important to present UGC in the right way. “Once you’ve begun collecting the type of UGC that really drives purchase decisions, it’s time to complete the process by displaying it on your site in the most effective manner possible,” Yotpo explained. “Implement AI-powered topic filters above your reviews, so shoppers seeking out specific information — like fit or quality — can immediately filter for the most relevant reviews for them. On-brand visual UGC, meanwhile, can be displayed directly on your homepage in shoppable galleries. By collecting higher-quality UGC, then displaying it intelligently on-site, you’ll be well-positioned to optimize customer experiences, thus driving continued brand growth.”