How Small Retailers Can Use User-Generated Content Marketing to Out-Compete Big Chains

By: on August 6, 2018

No matter how you slice it, small businesses just can’t compete against big box chains on price and resources. The good news is that you can compete—and stand out—by creating great content, and that specifically includes user-generated content (UGC).

UGC is the secret weapon for budget-strapped retailers. It saves you time and money, and, best of all, your customers create the content they want.

If you’re still in doubt about its effectiveness, consider the following statistic pulled from a Nielsen study:UGC Nielsen stats

Nielsen research on UGC content (Source)

Need more evidence? According to UGC marketing platform Yotpo:

Small retailers that aren’t showcasing user-generated content are missing out on a low-investment, high-impact way to build brand equity that can increase customer engagement and boost sales by as much as 30 percent.

In this article, we’ll explain what UGC is, the benefits it holds for small businesses and look at how two previously unknown businesses successfully implemented UGC to become established brands in their space, driving sales as a result.

What Is User-Generated Content?

User-generated content (UGC) is any type of content created by your customers—typically your most loyal fans. Instead of a brand showcasing its product or service, UGC demonstrates users showing off a product or service and how it makes their lives better. These can take the form of:

  • Social media posts and shares
  • User reviews and testimonials
  • Photo and video contest submissions
  • Blog posts

At its core, UGC works because it provides social proof of value. Your consumers are the best marketers.

share a coke instagram UGC

An example from Coke’s popular #ShareaCoke UGC campaign (Source)

Benefits of User-Generated Content

Think about the last time you were making Friday dinner plans. Chances are you looked up user reviews on Yelp to see what the ratings, food and service were like. Was the picture of the “best barbecue in known universe” the final push you needed to end your weekend with a bang?

We thought so.

According to the Pew Research Center, about two-thirds (67 percent) of frequent online shoppers read customer reviews before buying a product for the first time. UGC is a proven way to establish and grow your brand, and small retailers should take advantage of that. Here are other reasons why you should be using UGC in your content marketing efforts.

1. Build Trust: Consumers Trust Other Consumers

Let’s face it: As the owner of your business, you’re probably not the most objective when it comes to how great your product is. Customers don’t want to hear how great a product is from your brand—they want to hear it from other customers:

Why is that? It’s because consumers usually aren’t paid and don’t have much to gain from sharing reviews. It’s easy to see how effective UGC is in building trust and, ultimately, sales.

This is supported by research from Gartner (available to clients), which found that UGC from social media platforms such as Instagram can increase conversion rates up to 2.4 times. It’s human nature.

What’s going to convert visitors into buyers is knowing that real people have bought your product and that they genuinely value it.

It’s important to note that not all content will be positive. But you should see negative feedback as an opportunity to turn critics into fans by addressing their complaints head-on. Your efforts to address the problem could also gain the trust of other potential customers who may end up becoming long-term paying customers.

2. Gain Insight: Understand and Engage Your Consumers

Do not overlook the marketing gold mine of data that is UGC. Analyzing content from your customers can help you understand your audience, what their motivations are and what engages them.

These insights can inform you on what your fan favorites are and even what your upcoming product can address.

First, start by assessing the content your customers have created.

  • Is there a consistent theme in the pictures they’re sharing on Instagram?
  • Do those align with what your brand stands for and how you’d like to be perceived?

If yes, great, your brand perception is on point. And if not, this gives you an opportunity to address why you’re being perceived differently.

Customer reviews are another frequently overlooked source of consumer insight. Dig into your reviews.

  • What do your customers love about your product?
  • And what are they unhappy about?

You can then take steps to improve your product or address their complaints in the launch of your next product. This will give you a chance to make things right by building better relationships with your customers, in turn encouraging more sales.

3. Boost SEO Rankings: Authentic Content Drives SEO

When it comes to providing unique and authentic content that resonates with both search engines and customers, UGC checks all the boxes.

UGC campaigns can drive immense SEO value. Encouraging customers to share pictures, post reviews and leave comments gives you the opportunity to know what they’re talking about. By looking at the language and phrases they’re using, you’ll be able to identify long tail keywords that can help inform your SEO strategy.

Content generated from your customers tends to be more product or service focused, so it naturally carries SEO-friendly attributes such as titles, keywords, internal links and backlinks that search engines look for when ranking pages.

Customer product reviews are another crucial way for businesses to earn SEO credibility from search engines. Companies like Google evaluate a site’s reputation based on authority of the domain, author and truthfulness of the content—all of which reviews and testimonials provide.

By driving consumer trust and word of mouth marketing, UGC is effectively powering SEO, getting more traffic from search engines and increasing conversion rates by building trust.

Success Stories: Examples of User-Generated Content

Below are two success stories that started out as small businesses and have become category leaders in their space today by using UGC as their core marketing strategy to engage their customers.

Their passionate base of customers have become advocates, building engaged communities around their products, in turn increasing awareness and building trust for new buyers.

How Black Milk Clothing Succeeded With UGC

Australian fashion brand Black Milk has paved the way as one of the first retailers to effectively use social content online as its main marketing tool to generate sales for its nylon clothing.

Black Milk’s popularity today is a testament to how it has succeeded in tapping into its online cult following with UGC. The company has never paid to advertise or promote a post since its content is mostly generated by its fan following, a community of passionate fans called “Sharkies.”

Quick Stats of Black Milk’s Social Media Following

Black Milk Social Media UGC

How UGC addressed Black Milk’s challenge: One of the main hurdles online retailers face is the difficulty consumers have in not being able to touch and feel their products, particularly when it comes to fashion and apparel. Black Milk’s form-fitting clothes also pose additional concerns for potential buyers: Could this fit me? Will this look good on me?

Fans love to see what other fans are wearing, and UGC naturally lends itself to that.

According to Offerpop, 65 percent of brands believe UGC on social media is more influential than any other brand content, while 85 percent of consumers find visual UGC more compelling.

Social media-led UGC campaigns drive social traffic and, in turn, boost metrics such as follows, shares, retweets, likes and comments—all of which bodes well for raising your customer awareness and reach.

How Black Milk implemented UGC: Black Milk first saw an opportunity to tap into UGC when customers started posting selfies of themselves on Instagram wearing Black Milk tights.

To hop on the momentum, the brand began to encourage more Sharkie selfies on social media, by creating unique hashtags for each product and followed up by asking customers if they could feature their pictures on their website and social media platforms.

The result is a gallery of fans showcasing Black Milk’s clothings in various sizes with trending hashtags on its instagram account of one million followers.

 

It very soon got to the point where far more girls were buying clothes at my little online shop than at my tent at the markets.

James Lillis, founder, Black Milk

 

The value of UGC is clear: Shoppers who were previously unsure if a product would fit them can now see what it looks like on real women and be confident that it could look good on them too. In Black Milk’s case, their customers are more than just fans; they become Black Milk models and ambassadors.

Black Milk UGC

Black Milk shares a picture of a “Sharkie” selfie to its Instagram account (Source)

How DockATot Succeeded With UGC

A European import, the DockATot arrived as an unknown entity on the baby product scene in 2015 and has since been featured on nearly every mom blog, website and magazine as a result of its word-of-mouth UGC marketing on social media.

Designed as a multifunctional lounging “dock” that mothers can take their babies in anywhere, the company has over 450,000 followers on Instagram alone, with celebrities like Kim Kardashian, Lauren Conrad and Michael Phelps as some of its early high-profile fans.

Quick Stats of DockATot’s Following

DockATot social media UGC

How UGC addressed DockATot’s challenge: As a newcomer in the competitive baby product category, DockATot faced the biggest challenge in retail: getting customers to buy a new product they’ve never heard of.

That wasn’t the only barrier—the product’s price point (ranging from $175 for DockATot Deluxe+ to $300 for the DockATot Grand) and its category as a product designed for babies involving safety, were hurdles that needed to be overcome too.

Reputation is everything for new businesses, nevermind one that’s in a niche market. Without a previous track record, Elina Furman, its marketing director, knew it was critical to instill trust for the DockATot in moms.

With her limited budget, she decided UGC would be the most cost-effective, high-impact way she could build brand recognition for the new product.

How DockATot implemented UGC: According to a survey from Owlet Baby Care, nearly half of all parents with children six months or younger get just one to three hours of uninterrupted sleep a night.

Based on that evidence, Furman decided to communicate the value babies and moms would get by using the product—the gift of sleep.

Addressing the ‘lack of sleep’ that new parents struggle with would set the narrative for the DockATot’s website, its product reviews and social media posts.

 

I knew that as soon as mothers would get this product in their hands […] they would want to spread the word and it would catch on.

Elina Furman, marketing director, DockATot

 

DockATot UGC
DockATot’s message of “rest” and “sleep” resonates throughout its Instagram feed (Source)

Using a photo reviews app, Furman sought product reviews from customers, encouraging them to rate the product and share pictures across social media platforms.

Instagram, in particular, has been a huge hit for the DockATot for the following reasons:

According to the brand, over 1,200 DockATots were sold in just a day in its first ever sale. More significantly, sales have grown 2000 percent since its launch in the U.S. three years ago.

Takeaways and Recommendations for SMBs

Whether you’re just getting your feet wet in UGC or putting together a strategy for a UGC campaign, you should act fast to engage and share the stories of your most passionate fans to establish trust, create brand recognition and increase sales. Here’s one last example—this time of an SMB using UGC:

SMB Spotlight: How a Small Texas-based Boutique Grew Sales With UGC

Tahnee Elliott

Founder of TC Elli’s

TC Elli’s is a clothing boutique for young women, based out of Lubbock, a small college town in West Texas.

Why UGC: “While we love our local customers, we knew the only way to achieve significant growth was to appeal to a wider audience. We decided to use UGC to reach a wider audience without the hefty price tag associated with influencer marketing.”

How: Through our ambassador program, we implemented social networking UGC to reach our base of young, college-aged women. Our college ambassadors—or “Honeys” as we call them—are fans of TC Elli’s with a social media following. They use social media to educate potential customers and provide style tips with our products.”

Results of UGC: “Since starting our ambassador program, we’ve seen a sizable increase in sales in store and online, as well as a huge growth in our social media following. This has expanded our reach and enabled us to communicate with our target audience across the country. As an added bonus, UGC has also decreased our expenses. Using images produced by users on our website saves us valuable time and money usually spent on photo shoots.”

As you can see, ambassadors of your brand are out there; you just have to go out and find them. Here are some final takeaways:

  • Engage before asking: Social media engagement should not be seen as a chore but an opportunity. Show them your personality. Make it a point to engage with customers by responding to their comments or answering their questions. This will get customers excited about contributing for your product.
  • Offer rewards (and remember your hashtags): Provide an enticing incentive for your customers. It could be a small gesture of appreciation such as a repost or a product giveaway. Don’t forget to create a unique hashtag for your campaign to encourage and collect shares, and thank them for participating. A little appreciation goes a long way in building a loyal following for your brand.
  • Success takes time: A consistent theme throughout the success stories above is how new entrants overcame significant challenges by engaging their communities with UGC to emerge as category leaders today. Growing your business doesn’t happen overnight—the same goes for the success of your UGC campaign. With a little persistence and creativity, you might just be the next Black Milk or DockATot.

You may also like

Customer Advocacy Examples Small Retailers Can Copy

How to Increase Retail Sales: Measuring Social Media Impact on Retail Sales

Building Customer Loyalty That’s Embedded in Brand Trust

Compare E-Commerce Platform Software