BUILDING A MODERN BRAND WITH UGC + AI
The Next Frontier of_UGC
- The DNA of Digitally Native Brands
- The Need for Authenticity & The Rise of UGC
1. THE DNA OF DIGITALLY NATIVE BRANDS
THE DNA OF DIGITALLY NATIVE BRANDS
The steady rise of direct-to-consumer retailers, from the scrappy success story of Warby Parker to the unprecedented scale of behemoth Amazon, mirrors a seismic shift in the changing expectations of online shoppers.
“As technology increasingly reduces a market’s cost of entry, a greater choice of business models, services, and products is now available to customers in something of an endless virtual aisle from which to choose.” (KPMG1 )Merchants that cling to competing on price and product alone to serve today’s smartphone-tethered consumers, who have the world’s biggest online mall at their fingertips, risk becoming obsolete.
As Macy’s and Toys ‘R’ Us shutter stores, digital-first brands are taking on Amazon in a few calculated ways: They’re verticalizing, so they can take charge of the supply chain and run a lean, agile operation. They’re also forming hyper-strategic multichannel approaches, using online marketplaces exclusively for brand recognition. But the biggest changes these brands are making are harder to quantify: Unable to compete with Amazon on price, selection, or delivery, they are differentiating through intangibles, like customer community and brand values.
By its very nature, Amazon can’t provide the sense of belonging to a brand community or being a part of a curated lifestyle. These emotional experiences influence purchase and retention, attracting loyal customers who seek connection with a brand. Today, “authenticity is a standout consumer value.”2
“Customer-centric technology and data is critical to unlocking a superior customer experience,” according to a research note from Cowen retail analyst Oliver Chen. “Retail needs to engage customers in creative, on-demand ways to be relevant to new generations, and every company needs an Amazon or Un-Amazon-able strategy.”3
Digital-first brands are rewriting the rules of retail marketing via online product reviews, the humble hero of user-generated content. Using “the wisdom of the crowd” as a marketing tactic is a notion that’s taken on heightened meaning in a retail landscape forever changed by a $2.3 trillion global eCommerce market.
Ironically, the very strategy brands are using to fight back against Amazon was pioneered by the eCommerce giant, the original mastermind behind the online customer review. The much-copied feature gave consumers a voice and a digital bullhorn to sound off on their likes and dislikes to a vast Internet audience. This granted them newfound influence over retailers, while helping to redefine what they demand of their shopping experiences.
2. THE NEED FOR AUTHENTICITY & THE RISE OF UGC
THE NEED FOR AUTHENTICITY & THE RISE OF UGC
Today, a chorus of shopper voices, with influencers chiming in, combine to create a new choir of “brandvocates” who wield more sway over shoppers’ purchasing decisions than professional marketers.
It’s a shift that’s particularly pronounced among Millennials, which have replaced Baby Boomers as the nation’s largest buying group, along with Generation Z. These latter are even more likely than their Millennial counterparts to buy an item based on recommendations from YouTube videos and value the opinion of their “influencer” circles — which include family, friends, and bloggers — when making a purchase.4
The same shift is stripping marketers of their longtime pull with consumers, while elevating UGC-driven promotions — be it product ratings and reviews embedded in a customer email blast or shoppers’ Instagram photos on an eCommerce site, which are now often deemed more authentic and ripe for monetization than traditional advertising campaigns.
Indeed, it’s the shoppers themselves, who are the voice of the brand today. And as troves of UGC is “shared among consumers due to mobile internet and phone cameras, a number of brands are identifying consumers’ own photographs and incorporating them into their marketing material to make it seem more authentic and relatable,” the Euromonitor report said. “‘Less-than-slick’ is not only acceptable, but sometimes desirable.” 5
While reviews were a revolution in customer trust when they were first introduced, they’ve since become a staple for every online retailer, from super niche microbrands to big box department stores. A little more than two decades since the first online review, user-generated content has evolved to become a foundational building block for the success of any brand.
The Evolution of_UGC
1995
THE BIRTH OF THE CUSTOMER REVIEW
In the early days of eCommerce, purchasing online felt risky and unfamiliar. In 1995, Amazon was the first to successfully break down the trust barrier by publishing customer reviews on site.
2003
CUSTOMER REVIEWS GO MAINSTREAM
As reviews became a staple, brands began experimenting with how to maximize impact by collecting and displaying them on homepages, category pages, and product pages.
2004
FIRST YELP REVIEW
Though Yelp has now collected over 100 million reviews for businesses around the world, the first one ever written was by Jon B. in San Francisco about a spa: “Show up early and take advantage of their sauna, showers, and fruit bar before your massage.”
2005
FIRST GOOGLE SEARCH FOR “USER-GENERATED CONTENT”
As organic reach became nearly obsolete and paid advertising grew more expensive, user-generated content evolved into a highly effective, scalable way to reach and re-engage banner-blind consumers.
2007
PHOTOGRAPHERS AND FAUX REVIEWS
A new form of UGC emerged: customer photos. As customer images began providing clarity and visual punch, the world of text reviews started to get murky. Fake reviews became ubiquitous, and Amazon launched more than 1,000 lawsuits to crack down on the issue.
Today
UGC BECOMES DIGITAL-FIRST BRANDS’ BREAD AND BUTTER
The direct-to-consumer revolution opened up eCommerce opportunities in industries like perfume, lingerie,and food. Because of the gap between product descriptions and in-store purchase, robust, instructive reviews are now more important than ever.
This article was originally published on https://www.yotpo.com/ebook/brand-building-ugc-ai/
