Q&A: What is consumer-generated content (CGC) and why it’s essential for brands and retailers alike

With the number of smartphone users worldwide set to surpass 2 billion in 2016 and overtake desktop users, consumers have unlimited information at their fingertips. Consequently, brands and retailers have a real opportunity to tap into each touchpoint of the consumer shopping journey, both online and offline. Additionally businesses can leverage data to gain intelligent insight into both their customers’ needs and shopping behaviour, and their own brand offering.

What do you think are the current trends in the social space, businesses need to watch for?

Consumer data as value exchange

Social platforms allow the collection of precious consumer information businesses can leverage to offer what consumers are longing for today - a more personalised customer experience. By gathering knowledge gained from data, brands can offer highly relevant product recommendations and promotional offers, and provide a tailored customer experience. It’s by listening to consumers’ individual preferences and making those central, that brands will achieve positive results like loyalty, retention, positive feedback and acquisition. However, consumers are still reluctant when it comes to sharing personal details. Clarity and transparency are therefore critical factors for brands when talking to consumers about data. On top of transparent communication, businesses should really showcase to consumers the value gained from their personal data; for example, offering shopping recommendations well before purchase, but also consider customer appreciation activities and programmes, such as sending samples to try and feedback on. Such ‘recognition and appreciation’ approaches have the potential to turn customers into brand ambassadors, meaning a better brand image and reputation in the long run, and overall more positive bottom line outcomes.

Smart devices

The proliferation of new technologies and more people owning smart devices, is inevitably affecting mobile consumer behaviour and bringing more changes. Let’s take ‘baby boomers’ (people born approximately between the years 1946 and 1964), they are now using their smartphones not only to reach out to their loved ones, but also to research a brand and its offering, as well as complete a purchase. Generally, and across all generations, consumers are increasingly researching and shopping directly from their smart devices, and as social continues to merge with commerce, the ‘big’ players such as Facebook, Twitter, and Pinterest are all adding ‘buy’ buttons, and enabling users to pay in-channel with Apple Pay. As a result, brands and retailers need to tap into each touchpoint of the shopping journey and be present across all channels, offline and online.

Shops turning into interactive destinations

Similar to what we are seeing online, where consumers can interact with not only brand content, but most importantly content they rely the most on, like consumer-generated content (CGC), the offline shopping experience needs to be as interactive and personalised as possible to keep people in store. Being able to provide consumers with access to CGC, but also make personalised offers available ahead of purchase, when a consumer enters a store for example, is critical for brands to keep customers engaged and retain high footfall numbers. It is by leveraging consumers’ data that businesses will understand consumers’ specific needs and behaviours in different channels and formats, and offer them a truly personalised experience that will pay off both from a business and client perspective.

Why and how does consumer-generated content (CGC), like online customer feedback, influence consumers purchase decisions?

With consumer losing trust in brand messaging, businesses need to find a more effective way to influence consumers’ shopping choices. Several studies showed that CGC is the main source consumers consult before making a purchase decision. Providing access to CGC as well as incorporating content like online customer reviews, Q&A and brand-related photos and videos at all engagement points of the consumer purchase path, will lead brands and retailers to start seeing concrete results from their marketing spending.

Bazaarvoice conducted a survey in November 2013 of 1,500 adult consumers in the United Kingdom, which showed that the general public place high value on consumer reviews; specifically, 70 per cent read reviews before making a purchase decision. In a more recent study carried out by Webloyalty/Conlumino, in the discovery stage of the purchase journey, 74 per cent of online shoppers mentioned that they find new products through reviews and recommendations on websites and social media. In the experience stage, 31 per cent of consumers regularly leave reviews or give feedback with an average of 2.3 reviews written each year, of which 56.7 per cent are positive and just over 33 per cent negative. 31 per cent of online shoppers post recommendations and reviews to friends and social-network connections about what they bought.

Why do you think online reviews are important, both for consumers and businesses?

Consumers are talking about brands whether they want it or not; to make the most of customer feedback, and ultimately ensure customers consider them trustworthy, it is important to start a dialogue with them. In fact, consumers become more trustworthy of a brand and its products when the brand replies to customer feedback. Data from Bazaarvoice’s Conversation Index Volume 6 shows that shoppers who saw a brand respond to questions, feedback and negative reviews were 186 per cent more likely to purchase, than from brands that did not respond to feedback.

Authentic customer feedback has huge potential to positively influence buying intent and audience opinion. Acquiring more authentic consumer-generated content will help businesses achieve higher conversion rates and create lasting, valuable relationships. CGC is also a precious form of R&D for brands and retailers. Insight from reviews can be invaluable, as it can inform better business decisions, lead to innovation, and ameliorate the customer experience. In today’s omni-channel age, brands need to fully understand their consumer audience and the most appropriate platforms through which to engage with them; they need to go where conversations happen, with CGC being an evolution of these conversations. Ultimately, given that consumers rely more on peers’ recommendations than brand messaging, they are more inclined to purchase from brands that provide easy access to tools enabling them to share and access peers’ opinions.

Why do you think some brands and retailers are still reluctant towards leveraging consumer-generated content?

Businesses still fear negative customer feedback - they see it as a threat to their image and reputation. This is because they simple cannot see the great value behind displaying and engaging with negative online reviews, and treat these as insights and opportunities to improve their offering. For example, at the 2014 Bazaarvoice Summit, Gap, Inc. it was discussed why using negative reviews to root out product, service or even marketing flaws can be extremely valuable. The brand was able to use negative reviews to highlight the adjustments they needed to make in production of the fit, quality and material of their products.

There is also a lack of education among internal stakeholders on how to gather, respond to and leverage that feedback, which requires more of a paradigm shift to be accomplished, a change in the brand’s mentality about CGC as a whole. Additionally, given the cost involved and the technology required, some businesses may be reluctant to build a CGC-related strategy – that is why it’s crucial to be properly informed about the ROI of investing into CGC.

What steps can businesses take to protect themselves from fraudulent content?

Consumers have a fundamental right to trust the content they encounter, and it is a business’ responsibility to ensure authenticity of content at all times. The importance of sharing authentic content is crucial to building customers’ trust, particularly with today’s increasingly informed and connected consumers. In research commissioned by Bazaarvoice, 84 per cent of consumers stated that they would feel more trusting of reviews if they knew the reviews were screened for fraud, they were moderated, and displayed by a neutral, credible third party. 45 per cent of respondents say they were more trusting of reviews that had passed through a technology filter and human analysis, but only 14 per cent of respondents say a technology filter alone is sufficient.

Brands should consider displaying a trust mark along with the review. Trust marks demonstrate the brand’s commitment to authentic consumer feedback. This will also help increase consumers trust towards reviews- in fact, 47 per cent of respondents say they “would be more trusting of the reviews” if presented with a trust mark and an accompanying description of anti-fraud policies displayed when reading online reviews.

What steps can consumers take to protect themselves from fake content out there?

It all comes down to a trustworthy relationship with the brand and the brand’s channels. Consumers should be offered access to an open environment when they can transparently share their opinions, and at the same time, consult peers’ opinions.

Some signs consumers should watch for to protect themselves from fraudulent content are:

  • Authentic reviews tell a story other consumers can identify themselves with, which usually includes key words largely used by consumers.
  • A brand displaying only positive and/or five stars reviews is also another sign consumers should be keeping an eye for.
  • Watch for a sign like a trust mark on the brand’s website, to ensure authenticity of content (see Argos displaying Bazaarvoice Authentic Reviews Trust Mark on their website).

How can brands and retailers work together to maximise the impact on consumer-generated content?

The most effective way to achieve this is by joining a network of other brands and retailers. As a member of a robust network, businesses get useful insights not just into their own products and customers, but also into their category as a whole. Just as the network takes the pulse of industries, it also offers unique insights into the state of global regions. The breadth of the Bazaarvoice network for instance, allows us to see larger consumer trends across industries, such as global changes in mobile shopping. The most obvious benefit of sharing CGC across a network is that each member’s content volume increases, and businesses syndicate content to their vendors’ or channel partners’ sites.

Does consumer-generated content, like online customer feedback make an impact on sales? Can you share any examples of this?

Several forms of ROI manifest at different levels of review volume, extending beyond conversion increases to drive search traffic and reveal product improvement suggestions. The biggest leaps in sales may come as a result of the first several reviews on a particular product. As products continue to build review volume over time though, we’ve found that that conversion lift is just phase one of the cross-business benefit of UGC. Conversion is essentially the first “zone of ROI.”

Conversion rates see a steep incline as reviews stack up, and continue showing incremental increases well past 1,000 reviews. The second zone of ROI is SEO benefit, which manifests as the first full page of reviews is collected (around eight reviews). The SEO value of fresh CGC continually grows stronger as volume increases, even into the several hundreds and thousands. This is because the dynamic nature of review and Q&A content is still highly relevant, even at large volumes. Finally, the third zone of ROI is product insights. This zone begins at around 100 reviews, once there’s enough content to extract product suggestions, flaws, and insights from the review text.

As an example of this, Bazaarvoice has worked with Sealskiz and GHD. With GHD our aim was to support in providing impartial information to make it easier for consumers to select products and improve conversion. GHD has experienced a 30 per cent uplift in conversion as a result of having ratings and reviews content on product pages in the UK, and even more in secondary markets in other countries, where they’re seeing anywhere from a 35 per cent to 127 per cent uplift in conversion when people interact with reviews. With Sealskinz, we worked to increase shopper-purchaser conversion and use input from customer reviews to learn about new customer demographics to target. In December of 2014 alone, Sealskinz saw a 102.6 per cent lift in conversion from visitors who engage with reviews compared to those who didn’t engage with reviews.

Prelini Udayan-Chiechi, VP Marketing EMEA at Bazaarvoice