"User Generated Content (UGC) is continuing to change the advertising industry", with these words David Krupp, host of the Australian social commerce Podcast The Social Media Store, opened episode number six, which features our squarelovin CEO Benedict Stöhr. And we could not agree more. This blogpost will give you an overview of what the two talked about as well as a little context on The Social Media Store.

This is what you need to know about The Social Media Store. 

The Social Media Store is a podcast about all things social commerce. Social commerce is a subcategory of E-Commerce that emerged in the late 2010s. While E-Commerce refers to any customer shopping experience that is made online via a website or a branded app (source: hootsuite.com), social commerce describes the purchase of a product directly via a social media plattform, for example Instagram, or an online shopping experience that is enriched with social media content.

Based on a recent study, total e-commerce revenue in Germany reached a record level of more than 72.6bn. € in 2020, representing year-on-year growth of around eleven percent (source: trendreport.de). Further studies show that a third of all Germans have already made purchases via social media (source: greven.de). Based on this data, it is more than likely that buying through Social Media Apps like Instagram, Facebook, TikTok, Pinterest or Snapchat will become second nature for all of us. To get into the details, check out our Infographic about Social Commerce.

Social commerce is not only a great option for customers, but at the same time offers promising opportunities for marketers and business owners. In The Social Media Store, host David Krupp, dives into the many different aspects of social commerce and how the new approach on ecommerce is evolving. In the 6th episode our CEO Benedict joined him as a guest to talk about User Generated Content (UGC) management and its connection to social commerce. 

What does UGC actually mean?

UGC stands for User Generated Content. By definition, User Generated Content is any form of content — text, posts, images, videos, reviews, etc. — created by individual people (not brands) and published online, in print or to a social network. Fun Fact: Readers' letters are also UGC. The term has been around since the 70s/80s, and became especially popular in the 90s, when the first online reviews came up. Benefiting from the Internet and especially from social media, the amount of User Generated Content has grown massively over the past few years. 

This is what happens when you use UGC

1. UGC sparks emotions 

The old-fashioned but still most common way for brands to show and promote their products is very abstract: put a shirt, without anyone wearing it, in front of a white wall - photograph a perfect and somewhat photoshopped model wearing the shirt, and that's it. No relatability, no inspiration, no emotion. But, did you know that 98% of all purchasing decisions are highly emotional? How are you going to spark emotions with your products in front of a white backdrop?

Brands need authentic content that evokes emotions, delivers trust and provides inspiration, by giving a reference point in the form of social proof and identifying a peer group that potential customers may belong to. UGC is the kind of content that naturally fulfils all of these expectations and is perfectly suited to enhance online experiences. On Social Media, people are used to  imperfect, natural, authentic and real content shared by their friends and peers. Every time they open the Instagram app, they see a great variety of content and, as recent studies show (source: retaildive.com; pvc.de), are likely to get inspired by it and discover new products they might end up purchasing. So why not make use of this manifold content called UGC for your brand? It’s kind of a win-win: tap into the large pool of authentic customer content and don’t worry about constantly having to produce authentic content yourself as a brand anymore. 

Just think about how easy it is to take a picture or a video of a product and to share it on social media - anyone with a smartphone can be a content creator, there’s no need for fancy equipment or professional skills. That's why almost any product is perfect for UGC marketing. The easier your product can be photographed, the better. Among our clients, we see the trend that products with an emotional component usually see the most community engagement. Anything related to family, kids or pets works particularly well. 

2. UGC drives sales 

UGC not only provides inspiration and additional visual information regarding products, but also leads to higher conversion rates via Instagram. On the plattform, basic every-day-products like tea, porridge, or socks are shown in different contexts, by different people presenting them in very desirable ways. This way of showcasing products that our grandparents have already used just the same, has turned them into lifestyle products, which not only significantly increased sales of these items, but also created a new market for premium variants of them. Various Start-Ups that are now selling premium tea, porridge or socks, are offering them for a price 400% higher (or even more) than the average supermarket price - and it works. Besides organic content, UGC also has a significant impact on social ads. Our experience shows that ads enriched with visual UGC see significantly higher click-through-rates than those with branded content.

In a broader sense, social commerce also includes website sales that are supported by the interaction with embedded User Generated Content, such as interactive UGC galleries. Integrating UGC in a webshop creates a different, more natural and enjoyable customer experience that feels more like a private, personalized space (source: researchgate.net). 

Here are the reasons why UGC will throw you on top of the marketing game 

We live in an age of on demand everything: music, series, movies, food delivery, you name it. What some call the Netflix era is characterized by growing expectations of consumers in regard to what brands need to offer in order to grab their attention. They want to decide for themselves when they consume which kind of content, where and for how long. This observation can be applied to social media usage and online shopping too. (compare: webpurify.com). Just like consumers want entertainment that perfectly suits their taste, they increasingly demand online shopping experiences that come with the content they would like to see. Spoiler alert: it’s not perfectly polished models in studio lighting. Embedding UGC in your online shop contributes to a holistic image of your products. It allows you to present one and the same jacket, for example, on a great variety of people in a great variety of contexts. Consumers today are looking for brands that stand out, promote diversity and inclusivity. Guess what: your customer community already has all these qualities. Engaging with UGC gives you the opportunity to showcase them and working with squarelovin makes it easy as 1,2,3. 

Why you should use Hashtag Campaigns for Community Engagement - Best Practice: Jack Wolfskin 

Launching a hashtag campaign is a great way to generate community engagement and  can easily trigger a chain reaction, such as a change in brand image. To illustrate this, here's a best practice from our client Jack Wolfskin. In 2017, the German outdoor brand wanted to refresh its brand image and approach younger customers. The brand noticed that it was gradually becoming urbanized and wanted to bring its image back to its origins: backpacking in the outdoors.

That's why Jack Wolfskin launched the #gobackpack campaign on social media. While the campaign was running, each customer who made a purchase at a Jack Wolfskin store, got a flag that said “go backpack” in large white letters. By posting a photo or video with the flag on Instagram and tagging #gobackpack as well as @jackwolfskin, people could enter a competition, with the chance to either win prize-money or get a refund for their latest Jack Wolfskin product. Within only three months, the brand was able to collect more than  five thousand individual and authentic pieces of content, all of them conveying feelings of freedom, adventure and enjoying the outdoors. Until today, Jack Wolfskin uses this content for marketing purposes successfully. 

If you’d like to learn more about the difference between Australian and German law regarding image use and about the growing importance of UGC during the COVID-19 pandemic, you can now listen to the whole episode

Sources: 

https://www.trendreport.de/e-commerce-studie-2020/

https://www.greven.de/blog/social-media-marketing/studie-social-commerce

https://www.retaildive.com/news/study-instagram-influences-almost-75-of-user-purchase-decisions/503336/

https://www.pwc.de/de/handel-und-konsumguter/pwc-zwischen-entertainer-und-werber.pdf

https://blog.hootsuite.com/social-commerce/

https://www.researchgate.net/publication/320519627_Influence_of_user_generated_content_in_online_shopping_impact_of_gender_on_purchase_behaviour_trust_and_intention_to_purchase

https://www.socialmediatoday.com/news/lessons-from-ugc-in-2020-and-how-it-can-help-you-in-2021/593678/

https://www.webpurify.com/blog/the-2021-user-generated-content-report-44-ugc-stats-you-need-to-know/