Why Retailers Need to Start Embracing User-Generated Content

 In Uncategorized
Subscribe to our newsletter

With the advent of technology and big data, tracking customer behavior has been easier than ever. 

There are all sorts of tools you can use to do it. 

Open up your customer relationship management (CRM) tool and find the people who buy the most. Take a look at your e-commerce tool and you’ll see the products that are sitting in everyone’s shopping carts. Dig into your loyalty program tool and you can find all the customers who are just one purchase away from the next tier of membership.

And so on. 

But one tactic for tapping into customer motivation is a more old school approach, one that really doesn’t rely much on data at all and instead goes back to the first form of marketing: word of mouth. 

We’re talking about user-generated content (UGC). 

Why user-generated content is valuable to retailers

UGC highlights the positive reviews, images, and videos out there created by people outside your brand. You can find these on social media, in blog posts, with contests, or through reviews and testimonials. 

All you need to do is find the content that people are creating about your brand. Your loyal customers are doing all the hard work for you; so use it to your advantage and attract other customers. 

An easy way to do that is to hop on social media and take a look. You can also encourage your customers to create UGC by telling them to tag their Instagram posts or Tweets with a hashtag about your product. 

For smaller retail brands, UGC is awesome because it costs you zero dollars to create. In a world where it can be hard for smaller mom and pop shops and retail brands to compete because of tight marketing budgets, using user-generated content as a central pillar in your campaigns is a smart decision. 

The great news is it pays off on the other end too; customers love it.

Yotpo did a study looking at 200,000 stores and 163 million transactions to see how UGC made a difference, if any, in consumer shopping behavior. 

The results were pretty eye-opening. 

how ugc increases conversion rates

They found that for clothing, for example, consumers who didn’t see any UGC had a conversion rate of around 2%. However, when shown UGC, that conversion rate jumped up to 6.37%.

That’s a huge lift!

The same was true for consumers in food too. Without UGC, the conversion rate was just over 3%; after seeing UGC, that number jumped to just over 9%.

Hearing from other people matters

Regardless of how great you know your products and customer service, it doesn’t really impact consumers until they hear it from someone else.

That’s where user-generated content comes in.

It’s essentially social proof. Someone taking the time to create a post on Instagram or a dance on TikTok about how much they love something they bought from you has a far bigger psychological impact on a potential shopper than you saying the same thing in an ad or an email.

Consumers love to see when people who they feel are just like them make a purchase and share it. It’s real and authentic, and that matters deeply in an era where building trust is hard. Until your brand proves it to them, consumers are far more likely to trust the words of a stranger over virtually anything you want to tell them.

So pulling user-generated content into your marketing is a way to start building a bridge between you and your potential customers and developing brand loyalty. You can point to other people and say: “See? They love us, and since you like the same things they do, you’ll probably like us too!”

Something as simple as that can have a bigger impact than you think, and it can be a real secret weapon for smart retailers, regardless of size.

The more you can leverage and even facilitate social proof through UGC, the better off you’re going to be over the long-run. You don’t have to go viral, though it doesn’t hurt; all you need is authenticity. A handful of loyal customers who love your products can generate real results.

The data shows just how impactful UGC can be, so if you’re a retailer, it’s time to start using it.

Subscribe to our newsletter