User-Generated Content in E-Commerce - Advantages and Tips for Your Online Shop

1. What is UGC anyway?
2. Why is User-Generated Content a central component in E-commerce Marketing?
3. 5 Advantages of User-Generated Content in E-Commerce
4. However, this format should ideally not be a one-time and short-term campaign, but a long-term strategy. By establishing a unique brand hashtag and engaging your customer base, you can ensure the continuous generation of UGC beyond the scope of a limited-time campaign.
5. To drive this behavior as a brand and to contribute to it, you should, in addition to transparent communication and making it easier for customers to share their posts via suitable features, implement strong CTAs along the customer journey. These CTAs should be placed at strategically important points that your users fundamentally interact with.

If you are active in e-commerce and want to interact closely with customers while simultaneously increasing sales, user-generated content should definitely be on your agenda. From product reviews and ratings to visual content such as customer photos and videos, UGC has become a valuable tool for e-commerce companies to build trust, promote conversions and strengthen your customers' loyalty.

In this article, you will learn about 5 advantages of user-generated content in e-commerce. We also share some ideas and tips on how you can generate UGC for your online store and describe what you should pay attention to when dealing with UGC in order to use it successfully for your company. Of course, we won't miss to share a few practical examples.

What is UGC anyway?

User-Generated-Content, or UGC for short, represents content created by external individuals, such as followers, customers, or users, on the basis of their opinions, experiences, and decisions, and shared or published on the World-Wide-Web. These contents mainly encompass brands or their products/services. UGC can be found in numerous diverse content formats, such as images (visual UGC), videos, social media posts, reviews, audio, and more.

This content, based on the experiences of users and consumers, is the most trustworthy, authentic, and informative content you can get for your product and company. Because this shows the real value and the real experiences of your brand's customers.

UGC is therefore also often understood as the new version of word-of-mouth (recommendation marketing). But why is UGC nowadays an important component in e-commerce and thus contributes significantly to the success of numerous online shops?

Why is User-Generated Content a central component in E-commerce Marketing?

The customer experience and the often following sharing of it have always been an important factor in the external perception and success of e-commerce companies.

However, its relevance has increased significantly due to the expansion of possibilities on the user side in combination with the generally enormously increased use of digital platforms and especially social media. While consumers are highly selective in their purchase decisions due to increased availability of information, authentic, informative, and trustworthy content has become one of the most important assets of e-commerce companies. This applies to both the acquisition of new customers and the retention of existing customers.

You're probably wondering now if UGC can really have such a strong influence? It is indeed so, because according to Pixlee Turn To, the memory of UGC lasts longer for 35% of respondents. Also, UGC is 50% more trustworthy compared to branded content. According to a study by TrunToNetworks, 90% of consumers also believe that user-generated content has a greater influence on their purchasing decisions than so-called branded content (promotional brand content). Additionally, 2/3 of users believe that UGC creates a trustworthy and authentic shopping experience.

You haven't really focused on UGC in the past and are not yet convinced despite the numbers mentioned before? Then we have here 5 advantages which you can benefit from:

1. Increase of the conversion rate
2. Building brand awareness and engagement
3. Improving the online customer experience
4. Improving customer retention
5. Cost efficiency

5 Advantages of User-Generated Content in E-Commerce

1. Improving conversions (through social proof)
   
   
   Do you remember the last time a friend recommended a product to you? Or when you watched the latest fashion haul from your favorite influencer/YouTuber? And did you feel as good when you last saw a display ad on your phone or a commercial on YouTube? Exactly! Andy Crestodina summed this up as follows:"WHEN YOU SAY IT, IT’S MARKETING; WHEN YOUR CUSTOMERS SAY IT, IT’S SOCIAL PROOF."
2. 
   
   This social proof comes from the authenticity and credibility of UGC, affects (potential) customers and helps to build the necessary trust and conviction for a conversion. 9 out of 10 respondents find UGC helpful and are influenced by it when they want to make an online purchase.It can also convince undecided customers who have already had a touchpoint with your online store but have abandoned their purchase. Here, UGC can be used in ads for retargeting these customers in order to generate possibly missing trust. User-generated content can thus significantly contribute to increasing conversion rates and the success of your online store.
   
   
   In general, User-Content-creation
   
   
   can be integrated into all phases of the funnel, from awareness to retention. Regardless of its form, whether it is reviews, images, videos, etc., UGC has the power to attract customers, convince this audience to make a purchase and then bind them to your company. But more on this in the following.
   
   
   Building Brand Awareness and User EngagementIn addition to improving the conversion rate, UGC also offers other advantages for your online store. One of these advantages may seem obvious, but it is nevertheless essential. The development of awareness.Driven by various platforms and especially social media, we are now able to actively seek information about brands and their products in the form of customer reviews and recommendations, visual UGC, etc., usually within seconds or minutes. But also, we encounter these passively, without having to specifically look for them.
   
   
   User-generated content therefore helps you to build additional presence in the digital environment and thus create, consolidate or even increase awareness of your brand. This is important because customers who don't know your brand yet, can't buy from you. UGC therefore also supports you in the upper funnel at the beginning of the customer journey.
3. In conjunction with the provision of relevant information, the generated attention can contribute to an increase in your brand's awareness and increase the chances for an interaction with potential customers. And this engagement is extremely valuable, because it implies that customers are engaging with your brand or your product. They interact with your content. That means they may be asking for product information, looking at product experiences or comparing products to make an informed purchase decision. And achieving this engagement can be quite challenging in a highly competitive e-commerce environment, even with the help of other marketing measures.
   
   
   To generate the greatest possible engagement for your brand, however, you must always have new, original, informative and authentic content. Good thing that various social media platforms, with the amount of user-generated content that is now being shared on them, represent a kind of UGC source/library and can and should be used profitably by you. Depending on the size of your company, the integration of aSocial media software
   
   
   , for bundling, managing and analyzing information from different social networks, could be useful. By automatizing, cost advantages can be developed.
   
   
   Improving the Customer Experience in Online Shopping
   
   
   The customer experience, also known as customer experience or CX, is one of the most important elements for e-commerce companies. It influences the current purchasing decision and thus the conversion rate, but also indirectly the customer retention (loyalty) after the initial purchase.
   
   
   The customer experience is the perception of your customers at all contact points with your brand. It is one of the most important elements in which e-commerce companies can differentiate themselves from their competitors. Ensuring a good customer experience can significantly increase customer retention and thus the CLV (Customer Lifetime Value) and the brand equity of your online store.On the other hand, a bad CX can also mean a loss of potential or existing customers and negative effects for your brand. However, creating a seamless and exciting shopping experience that stands out from competitors is also one of the biggest challenges for e-commerce companies.In the challenge to create a unique shopping experience and emotionalize your customers, the integration of user-generated content can help. So, for example, you can convert the content generated by your users into shoppable UGC galleries and thus stimulate the inspiration to "buy" a certain look/a certain product. UGC can also be integrated into your (social media) ads and email communication.Another extremely effective measure to improve the CX and at the same time increase the conversion rate is the inclusion of customer reviews on category or product pages. These can in turn contribute significantly to the perception of quality of your products and brand. More on that later.
   
   
4. Incentive to Loyalty (Long-term Orientation)
   
   
   
   
   Loyalty! This word is one of the most frequently heard words in e-commerce. And rightly so, because returning customers are essential for the continued stay and success of an online store. Especially in the current enormously volatile, uncertain and competitive e-commerce environment. However, loyalty, depending on the business model, is usually difficult to generate. This is where UGC comes back into play.
   
   
   Now, on the one hand, you should consider the points mentioned before and also offer your customers a good CX. If you manage to do this, it is important in the next step to enable your customers to share their experiences. Customers who publicly share positive content about your products or brand are called brand advocates. The likelihood of this group of customers making another purchase from you is very high.
   
   
   In addition, UGC in the form of testimonials, or user-generated product images, -reviews, experience reports, selfies and videos, is an effective marketing strategy to increase trustworthiness in your brand and bind existing customers.
   
   
   Because these positive user-generated contents and the social proof achieved with them, awaken the desire to be associated with your brand. Moreover, the provision and integration of satisfying experiences can lead to the creation of a community, a sense of belonging and thus promote brand loyalty.
   
   
   And if you get negative feedback from your users besides the positive content, it should have an equally high or possibly even higher value. Because these negative experiences give you valuable insights into possible weaknesses and thus reveal potential for improvement in your business model, processes and products.
   
   
5. Cost efficiency
   
   
   One of the most important resources for acquiring new customers as well as retaining existing customers is content. Because good content significantly influences the engagement and the chance of (re-)conversion of customers. But we all know that the budget and resources for content research, its creation and subsequent activities are limited. In addition, the ongoing creation of quality content that appeals to your audience and is helpful to them can become a challenge for online stores. Especially for smaller ones. Ok, and that means?User-Generated-Content can help you out here. Especially social media platforms like Instagram and TikTok can turn into sources of new, authentic and above all informative content in different formats. And the best part is: companies can simply make use of the availability of this user-generated content. How? Numerous different marketing suites, like for example
   
   
   squarelovin
   
   
   , offer easy solutions to track UGC, to legally request its use and to integrate it into your own campaigns and thus reuse it.
   
   
   In addition to the positive effect of cost reduction through the use of UGC, the integration of it into your campaigns can also develop a so-called flywheel. Because the use of user-generated content in campaigns often leads to the creation of further user-generated content. Ideally, this could follow the continuous creation of creative, authentic and inspiring content and thus enrich your campaigns.
   
   
   So far so good. You're wondering now how you can encourage your users or customers to create content and then share it as well?
   
   
6. 
   4 Tips to Generate User-Generated Content for Your Online Store
   
   
   User-Generated-Content has not just emerged yesterday. Numerous examples can be found where online shops have successfully discovered and used UGC.Launch Contests & Giveaways
   
   
   Contests and giveaways are perfect for generating UGC. Hash-tag campaigns are also ideal for both generating UGC and increasing the brand awareness of your online shop, as well as creating social proof.One of the most well-known examples at the moment is undoubtedly from Shein. Shein is an ultra-fast fashion company, which became known with its “Fashion-Hauls”, the so-called “Shein-Hauls” on TikTok. In this format of a hashtag campaign, customers show and share their ordered looks from Shein. While this campaign was certainly promoted by a network of influencers at first, the incentivizing of the customers did play an important role in the generation of virality. Participants in the campaign had the chance to be posted in Shein's social media feed.Because customers can identify with these contents and the control factor is extremely high, the chances of generating a viral effect are increased. In the case of Shein, the hauls have developed into a popular format on TikTok, generating plenty of attention for both the users and Shein. In this process, the customers also drive content creation for Shein. The massive reach, which Shein has already been able to achieve on TikTok, is evident when looking at the brand hashtags. With the hashtags #sheingals or #sheinhaul, the e-commerce giant has already generated 3.2 and 9 billion views on TikTok respectively.
   
   
   Shein-TikTok-Haul (Author's screenshots)
   
   
   The two most important aspects in such a campaign are both the selection of a unique hashtag to which your customers can relate and the encouragement of your audience/community to participate.

However, this format should ideally not be a one-time and short-term campaign, but a long-term strategy. By establishing a unique brand hashtag and engaging your customer base, you can ensure the continuous generation of UGC beyond the scope of a limited-time campaign.

Build a community

1. As with so many other topics in marketing, creativity in UGC is also boundless. Therefore, it might offer itself as a pure e-commerce player or as an omnichannel retailer to organize (online) events or establish forums and social media groups as touchpoints for new and existing customers.
   
   
   These are also suitable to motivate your (potential) customers to talk about your brand. These communities encourage your membership to exchange, create UGC and thus share their experiences and opinions.
   
   
   Collect and use what already exists
   
   
   If you already have a somewhat established brand and customer base, it might be worthwhile to collect already created photos, videos and other content of your brand. How? Quite simple: On most platforms, especially in social networks, you can simply find photos, videos and other content.
   
   
   You can search for mentions/tags, places as well as hashtags. To do so, simply enter the name of your brand, the hashtag or the place in the search field, have a look at the content and collect those in your media library that you want to use in the future.Feature up (On-site reviews & Visual UGC uploads)Customer reviews. Some of you might now ask yourself, why customer reviews? But let's be honest. Who of you did not inform yourself about the product before his or her last online purchase? And what is better than the opinion and experience of customers? Exactly: nothing. Customer reviews have a long past, but have gained enormously in importance over time. Especially in the digital environment and e-commerce. The development has even reached the point where customer reviews have become a major part of the business model of some online shops.
   
   
   Features and functions that allow your customers to share their opinion and experience about your products or services can greatly promote the creation of UGC. It is advantageous to make this as easy as possible for your customers. Often, these reviews are therefore directly integrated on the category or product pages. By providing inherent added value, this contributes to increasing the credibility of online shops and thus improving the customer experience and conversion rate.
   
   
   Here too, numerous examples of different online shops can be found. At Snocks, for example, the product review, in the form of a 5-star rating, is displayed quite prominently directly on the category page. The rating can also be found on the product page, but is additionally complemented by detailed customer reviews at the end of the product page. As a rule, these reviews can be found both text-based and in a visual form.
   
   
   
   Snocks Product Review
2. Snocks Customer Reviews
   
   
   Especially the combination of text-based and visual content can significantly influence the purchasing decision of customers for certain products or brands. One of the online marketplaces that allows its customers to give reviews in text and visual form is Etsy. In Etsy's case, the risk of making a purchase that customers may perceive can be reduced and trust in the dealer and their products can be strengthened.Etsy Customer Reviews (Author's Screenshot)
   
   
   Do you think that’s it? The process is not over here. Once you have managed to have UGC created by your customers, it should also be holistically integrated into your marketing strategy. However, there are a few points to note here.
   
   
3. What you should pay attention to when dealing with User-Generated Content
   
   
   User-Generated Content is not self-running. To ensure successful use of UGC, there are a few things you should consider.
   
   
   Choose the right (social) platform
   
   
   The choice of the right platform is a central component and crucial aspect for the success both in the holistic development and implementation of your marketing strategy and for the generation of UGC. It should be noted here that, for example, the above-mentioned contests, giveaways or hashtag campaigns, as well as the content need to be created and played out on the platforms where your target group resides.
4. Clear communication and authenticity
   
   
   
   A major incentive for users who produce UGC, as already demonstrated in the example of Shein, may be the use and dissemination of the content they have produced. Many UGC creators want their content to be reused and shared by your brand:
   
   
   
   To now reduce the effort on your side and maximize the value at the same time, your communication regarding the content you desire and therefore the content which is most likely to be shared, should be clear.
   
   
   According to

 Hootsuite

, only 16% of brands communicate clear guidelines on which user-generated content they use and share, while more than half of customers want clear communication from your brand.

So, there is still a lot of potential for your online shop in creating UGC considering proper communication with customers. So don't hesitate to communicate openly and clearly with your customers in order to increase the success chances in UGC and generate its greatest value, authenticity.

Strategic placement of relevant Call-to-Actions (CTAs)

In rare cases, a sustainable amount of UGC is created overnight, but more often over a certain period of time. Ideally, recognition features of your brand should also be established in order to create a sustainable generation of UGC.

To drive this behavior as a brand and to contribute to it, you should, in addition to transparent communication and making it easier for customers to share their posts via suitable features, implement strong CTAs along the customer journey. These CTAs should be placed at strategically important points that your users fundamentally interact with.

In this respect, the placement of CTAs at strategically relevant points in your online store, as well as features that enable customers to share their experiences, still offer plenty of room for creativity and potential, which should be used accordingly. In practice too, numerous other and diverse examples can be found. From placing your brand hashtags across social media in the post description of your posts, in the Instagram bio right up to your own location tag.

1. About You-Instagram-Bio (Author's Screenshot)Incentivizing or not?
   
   
   Another general question you should ask yourself is whether you want to incentivize your customers to generate UGC or not? In principle, incentivizing brings advantages, but also disadvantages. As a rule, a certain benefit in the form of discounts, vouchers or similar can be a positive incentive for customers to create content.
2. However, not only does this affect your profitability, but it can also lead to a certain dependency on the customer side and affect your brand in the long run. Therefore, you should decide in connection with your brand vision, whether you create incentives or not. An important aspect that should be considered permanently regarding incentivization is balancing quantity and quality.Use of a content marketing software
   
   
   To organize the content generated by your users in a meaningful way, integrate it into your marketing strategy and then distribute it, the use of a
   
   
   content marketing software
   
   
   is incredibly helpful. Most of the providers of such software solutions or suites offer you a wide range of features to get the most out of your UGC.However, before you reuse the content in any way or integrate it into your campaigns, you should definitely ask for the permission of the respective persons who have created the content.Neglecting to do this could result in legal consequences or a backlash against your online shop from the customer side in the worst case. Especially due to the quick and far-reaching dissemination of such negative experiences, your brand image can be negatively affected. Fortunately, obtaining the consent of your customers is also greatly simplified by the integration of the abovementioned solutions offered by numerous providers.
   
   
   Involve your users
3. In this entire process, it's important not to forget where this content came from and for whom it's meant in the future. Right! Your current and future customers.
   
   
   The reuse or display of original content shows appreciation towards your users who create the content for your brand, encourages them to repeat this in the future and at the same time increases the authenticity of your post towards (potential) customers. For this reason, you should also identify the origin of this content.In general, you should make sure to clearly show where the content comes from and which components (visual, text, sound, etc.) you have used from your users. If you use the UGC cross-platform, it is also important to ensure how your users want to be identified on the non-native platforms.
   
   
   Conclusion
   
   
   UGC has become an important aspect for the success of companies in e-commerce. This includes content created by customers such as photos, videos and reviews, which are created and shared on various digital platforms, including social media.
   The relevance of UGC for e-commerce companies lies in its ability to create authentic and trusted content that resonates with your customers, leading to increased brand awareness and loyalty, higher conversion rates, by social proof, and stronger customer retention.
   
4. Online stores can make use of the numerous benefits of UGC through contests, giveaways and the integration of suitable features to share the customer experience and thus contribute to the development of a high-performance customer experience along the customer journey that stands out from competitors.However, in order to leverage the potential of UGC accordingly, online stores should consider some aspects such as the choice of the right platform, the integration of supportive features, the strategic placement of important CTAs as well as obtaining consent from the customer's side, possibly in combination with the use of content marketing software.
   
   
   ⁠Eine weitere, generelle Frage, die ihr euch stellen solltet, ist, ob ihr eure Kund*innen zur Generierung von UGC incentivieren möchtet oder nicht? Grundsätzlich bringt eine Incentivierung Vor-, aber zugleich auch Nachteile mit sich. Allgemein kann ein gewisser Benefit in Form von Rabatten, Gutscheinen oder Ähnlichem ein positiver Anreiz für Kund*innen sein, Inhalte zu erstellen. 
   ⁠
   
   
   
   ⁠Allerdings beeinträchtigt dies nicht nur eure Profitabilität, sondern kann auch zu einer gewissen Abhängigkeit auf Kundenseite führen und eure Brand langfristig beeinflussen. Daher solltet Ihr, in Verbindung mit eurer Markenvision, entscheiden, ob Ihr Anreize schafft oder nicht. Ein wichtiger Aspekt, welcher nämlich dauerhaft bzgl. einer Incentivierung berücksichtigt werden sollte, ist Quantität und Qualität zu balancieren.
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5. Verwendung einer Content-Marketing-Software
   ⁠
   
   
   ⁠Um den von euren Nutzer*innen generierten Content sinnvoll zu organisieren, diesen in eure Marketingstrategie zu integrieren und anschließend zu distribuieren, ist die Verwendung von einer Content-Marketing-Software enorm hilfreich. Die meisten Anbieter solcher Software-Lösungen oder Suites bieten euch eine umfangreiche Palette an Features, um das meiste aus eurem UGC herauszubekommen.
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   ⁠Bevor ihr den Content in jeglicher Art weiterverwendet oder in eure Kampagnen einbindet, solltet ihr unbedingt die Zustimmung der jeweiligen Personen, welche den Content kreiert haben, einholen. 
   ⁠
   
   
   
   ⁠Dies zu unterlassen könnte im schlimmsten Fall sowohl rechtliche Konsequenzen als auch einen Backlash gegenüber eures Online-Shops von Kundenseite bedeuten. Insbesondere der schnellen und weitreichenden Verbreitung solcher negativen Erfahrungen geschuldet, kann euer Brand Image negativ beeinträchtigt werden. Glücklicherweise wird auch die Einholung der Zustimmung eurer Kund*innen bereits durch die Integration der zuvor genannten Lösungen zahlreicher Anbieter deutlich vereinfacht. 
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6. Bezieht eure Nutzer*innen ein
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   ⁠In diesem gesamten Prozess ist es wichtig, dass ihr nicht vergesst, von wem diese Inhalte erstellt wurden und für wen diese in Zukunft gedacht sind. Richtig! Eure jetzigen und zukünftigen Kund*innen. 
   ⁠
   
   
   
   ⁠Die Weiterverwendung bzw. Darstellung originaler Inhalte zeigt Wertschätzung gegenüber eurer Nutzer*innen, welche die Inhalte für eure Brand erstellen, ermutigt diese, dies in der Zukunft zu wiederholen und steigert zugleich die Authentizität eures Posts gegenüber (potenziellen) Kund*innen. Aus diesem Grund solltet ihr außerdem die Herkunft dieses Inhaltes kenntlich machen. 
   ⁠
   
   
   
   ⁠Generell solltet ihr darauf achten, deutlich darzustellen, von wem der Inhalt stammt und welche Bestandteile (Visual, Text, Ton, etc.) ihr von euren Nutzer*innen verwendet. Solltet ihr den UGC plattformübergreifend nutzen, ist es auch hier wichtig sicherzustellen, wie eure Nutzer*innen auf den jeweils nicht nativen Plattformen gekennzeichnet werden wollen. 

Fazit

UGC hat sich zu einem wichtigen Aspekt für den Erfolg von Unternehmen im E-Commerce entwickelt. Dazu gehören von Kund*innen erstellte Inhalte wie Fotos, Videos und Bewertungen, die auf verschiedenen digitalen Plattformen, einschließlich sozialen Medien, erstellt und geteilt werden. Die Relevanz von UGC für E-Commerce-Unternehmen liegt in dessen Fähigkeit, authentische und vertrauenswürdige Inhalte zu erzeugen, die bei euren Kund*innen auf Resonanz stoßen und zu einer erhöhten Markenbekanntheit und -treue, höheren Conversion Rates, durch Social Proof und einer stärkeren Kundenbindung führen.

Online-Shops können sich u. a. durch Contests, Giveaways sowie der Einbindung geeigneter Features zum Teilen der Kundenerfahrung, die zahlreichen Vorteile von UGC zunutze machen und somit zur Etablierung einer performanten Kundenerfahrung entlang der Customer Journey beitragen, welche sich von Wettbewerbern absetzt. 

Um das Potenzial von UGC entsprechend nutzen zu können, sollten Online-Shops jedoch einige Aspekte, wie beispielweise die Auswahl der richtigen Plattform, die Einbindung unterstützender Features, die strategische Platzierung wichtiger CTAs sowie die Einholung der Zustimmung von Kundenseite, ggf. in Verbindung mit der Verwendung einer Content-Marketing-Software, beachten.