How to Use UGC (User-Generated Content) in Ecommerce & Dropshipping in 2024

Content is the lifeblood of any ecommerce business. It powers all your marketing efforts across different channels, from your website to your social media to your ecommerce sales channels. However, consistently producing fresh content requires a steep investment of time and resources. That’s why many ecommerce businesses are tapping into online resources, such as social media platforms, tools, online communities, and other online platforms, to bolster their brand’s content creation efforts. 

Incorporating user-generated content (UGC) can be highly advantageous for your brand. As an ecommerce store owner, this approach frees up your resources and time, allowing you to maintain a consistent flow of engaging content without the burden of constant content creation. Additionally, it leaves you with more time to focus on other aspects of your business such as product development, customer service, and strategic planning.  

In this blog, we’ll talk about what UGC is and how to use UGC in ecommerce and dropshipping businesses. Additionally, we’ll uncover strategies to encourage users to create and share user-generated content and provide you with real-life examples of how brands are leveraging it.

Let’s get started.       

What is user-generated content (UGC)?

User-generated content is authentic content that is voluntarily created and shared by customers to showcase their experiences, opinions, and creativity. It’s not a part of paid or sponsored content. UGC can include product reviews, real customer photos, social media posts, or videos. For instance, a customer shares a photo and an unboxing video of a new fancy product they have recently purchased, sharing their experiences with the brand. This is an example of user-generated content.

User-generated content is brand-specific but doesn’t feel like an ad. It’s similar to word-of-mouth marketing, which shows that other customers love and enjoy certain products. Brand loyalists are an excellent source of UGC, as they are already passionate about a brand and established advocates within its community. UGC is important for ecommerce brands in the digital age. It has become a pivotal tool for ecommerce and dropshipping businesses, especially in 2024, shaping customer engagement and brand perception. 

According to the Volume 17 Shopper Experience Index, 55 per cent of shoppers say they’re unlikely to buy a product without user-generated content such as product reviews, customer photos, or Q&A forums. UGC helps build customer confidence. An ecommerce business can leverage user-generated content to influence its potential customers and convert them into buyers.  

Why does it matter for ecommerce and dropshipping?

In today’s ecommerce landscape, customers crave authenticity and real experiences over polished marketing messages. With ecommerce competition becoming more fierce than ever, it could be quite challenging for a brand to stand out in the crowd of competitors’ advertisements and sponsored content. 

Leveraging user-generated content for your marketing materials is a fantastic strategy to re-engage your existing customers and attract new customers. By showcasing real and happy customers using your products through customer stories, images, and videos, you provide genuine insights and tangible evidence that resonates with your potential customers. It can help ecommerce businesses build trust, foster engagement, and ultimately drive sales. This makes user-generated content more preferable than traditional marketing campaigns. A recent survey found that 60 per cent of consumers (70 per cent of millennials) said social content from friends and family impacts their purchasing decisions, while only 23 per cent said celebrity influencer marketing was impactful.  

The following are some of the reasons why user-generated content matters for ecommerce and dropshipping businesses. 

User-generated content is cost-effective

Creating high-quality content for your brand’s social channels or website can be expensive and time-consuming. For smaller brands or dropshipping businesses with limited budgets, investing in large-scale brand awareness campaigns may pose significant financial challenges. User-generated content is a cost-effective alternative to traditional advertising methods. According to a study by TurnTo and Ipsos, 90 per cent of shoppers report that user-generated content is more likely to influence purchase decisions than influencer marketing. Research also found that user-generated content costs 50 per cent less in cost per click (CPC) compared to traditional ad creative. Instead of investing heavily in expensive ad agencies or flashy ecommerce campaigns, businesses can leverage the creativity of their user base. This way, businesses can save time and money while still producing engaging and effective content. Furthermore, most of your customers would be excited to feature on your channel, which can also contribute to customer satisfaction and brand loyalty.   

User-generated content is easy to track 

With the rise of social media, customers have now become active creators, producing content for their social media channels. As an ecommerce brand owner, you can leverage this user-generated content to catapult your brand. Social media platforms make it easy to track UGC through hashtags, mentions, and tags. Samsung is a prime example of a company that has effectively leveraged user-generated content in its marketing strategies. When they released the Galaxy A smartphone, the tech giant encouraged its users to post creative social content with the hashtag #danceawesome. Several creators shared videos on TikTok, giving the company a huge amount of exposure. By monitoring social media channels, businesses can easily keep tabs on the content their customers create and share. This provides valuable insights into consumer preferences, trends, and sentiments, allowing businesses to craft an effective marketing strategy and engage with their audience in real time. 

User-generated content is customer-centric

User-generated content puts the spotlight on the customers, allowing them to share their experiences, opinions, and creativity. This customer-centric approach fosters a sense of community and belonging, as they feel valued and heard by the brand. Customers may feel a strong desire to participate and engage with a like-minded group of individuals, which can generate diverse and creative content that increases web traffic, user engagement, brand exposure, and repeat purchases. It can create buzz and get everyone talking. By centring their marketing efforts around the voices and stories of their customers, businesses can better resonate with their target audience and build stronger relationships. 

User-generated content supplements branded content 

Brands need a high volume of relevant and quality content to reach consumers on different online platforms, so businesses may need to ramp up content production. Dropshipping businesses, particularly start-ups, and smaller brands may find it challenging to produce high volumes of quality content. Sharing user-generated content, such as user-generated photos, customer testimonials, positive reviews, social media posts, or visual content, not only adds authenticity to the brand’s marketing efforts but also fosters trust and credibility among potential customers. 

Businesses may produce some content in-house and source UGC. Brand-generated content is carefully curated and crafted by the business, ensuring consistency in messaging, tone, and visual identity. On the other hand, UGC acts as a supplement that adds depth and authenticity to the brand content. By incorporating UGC alongside branded content, businesses can create authentic content and more comprehensive and relatable stories for their audience. Creating a balance of both professionally curated content and user-generated content can provide a well-rounded view of the brand, offering both credibility and authenticity.

User-generated content makes a brand more approachable

UGC can make ecommerce brands look more approachable and encourage one-on-one connections and communications with their audience. It humanises the brand by showcasing content created by real customers, demonstrating that they value the opinions and experiences of their community. This makes the brand more approachable to consumers, encouraging them to share their experiences and interact with the brand through comments, messages, or direct interactions on social media platforms. It can also help businesses break down barriers and create a sense of trust. Leveraging UGC can strengthen the bond between the brand and its customers and create opportunities for meaningful conversations. 

Benefits of user-generated content (UGC)

The benefits of user-generated content are endless. It enables brands to capture the target audience’s attention like never before, which is why many big and small brands leverage UGC. It’s used across all stages of a buyer’s journey to influence customer engagement, increase conversions, and boost sales. 

Let’s go over some of the incredible benefits of leveraging UGC for ecommerce brands. 

Trust building 

According to a new data report from Stackla, UGC resonates as the most authentic, with nearly 80 per cent of survey respondents saying UGC highly impacts their purchasing decisions, making it 8.7 times more impactful than influencer content and 6.6 times more influential than branded content in consumer’s eyes. User-generated content includes social posts or sharing, blogs, videos, customer reviews, testimonials, and product referrals. 

UGC has lately become a powerful force that businesses can leverage to build trust and credibility with consumers. This authentic content from real customers can be incredibly influential in shaping customers' perceptions about products and brands and driving purchasing decisions. When consumers see real people sharing genuine experiences and opinions about a certain product, it instils trust and confidence in consumers and mitigates scepticism and uncertainty, encouraging them to make informed decisions. By showcasing the experiences and satisfaction of previous customers, UGC helps create authenticity and transparency that traditional messaging struggles to achieve.

Enhancing social proof

Traditionally, consumers used to make purchases based on word-of-mouth recommendations. Nowadays, social proof can be seen as word-of-mouth recommendations, but it’s all happening online. If you have an ecommerce website, you’ll need social proof to show buyers that your business isn’t some scam. Social proof plays a crucial role in influencing customer behaviour and fostering brand loyalty. UGC, such as reviews and customer testimonials, serve as social proof not only for new customers but also for returning ones, influencing their decisions when considering additional purchases. It’s tangible evidence of a brand’s credibility and popularity. 

When consumers see other customers enthusiastically sharing their experiences and recommendations, it creates a ripple effect of validation. Each positive review, photo, or testimonial acts as a vote of confidence in the brand and its products. This collective validation from a community of satisfied customers helps to alleviate doubts and hesitations, making it more likely for new customers to trust the brand. By harnessing the power of UGC, ecommerce and dropshipping businesses can amplify their social proof, establishing themselves as trusted authorities in their respective industries.

Driving brand and product engagement

UGC has become a crucial component in driving brand and product engagement in ecommerce and dropshipping. Studies show that when individuals create and share content online, it gets 28 per cent higher engagement than content produced and shared by companies. 

By encouraging customers to share their experiences and opinions, brands can create opportunities for interaction and dialogue. Whether through reviews, photos, or videos, UGC helps spark conversations and fosters a sense of community among customers. It can result in increased engagement between the brand and its audience. This increased engagement not only strengthens the relationship between the brand and its audience but also produces valuable user-generated insights.

Brands can actively participate in these conversations and incorporate user feedback to demonstrate their responsiveness and commitment to customer satisfaction. Furthermore, UGC has the potential to go viral, expanding the brand’s reach and visibility across social media platforms. UGC fuels ongoing engagement, cultivating a loyal customer base and driving sustainable growth for ecommerce and dropshipping businesses.  

How to encourage customers to make user-generated content (UGC)?

Consumer-generated content is more persuasive than brand-generated content. Consumers tend to trust what your other buyers say about your brand. This valuable content has great marketing potential. Businesses may need to encourage customers to produce and share UGC content to hit their sales goals and foster consumer trust. 

Here are some of the ways businesses can encourage customers to make UGC. 

Offer incentives or rewards

Offering rewards and incentives, such as discounts, exclusive access, or loyalty points, to your customers for their contributions can encourage them to create more UGC. You could introduce an ambassador program that gives fans an opportunity to upload a photo on your website, fostering a sense of community and appreciation while leveraging UGC to amplify brand advocacy.

Feature customer stories

Storytelling can encourage interaction. By sharing the stories, testimonials, and reviews of satisfied customers across different channels, businesses can encourage and inspire other customers to share their own experiences with the brand. Airbnb does this effectively by encouraging its customers to create and share their UGC on social media using the hashtag #Airbnb and featuring the best submissions on its website and social media channels. Airbnb also hosts a photo contest called “Airbnb Photo Storytelling”, which rewards the best photos with cash prizes.

Organise contests and challenges 

Humans are competitive by nature. Organising contests and challenges can encourage customers to participate and showcase their creativity while interacting with your brand. Depending on the type of products you sell, you could run a photo contest, video challenge, or storytelling competition. Make sure you provide clear instructions for participation and announce prizes, discounts, or recognition for the best ones.

Create shareable experiences 

If you want your customers to talk about your brand on social media, you need to give them a reason to do so. Design experiences that naturally encourage customers to create social media posts and videos. This could be through product packaging, interactive contests and challenges, or memorable brand experiences. The more share-worthy the experience, the more likely customers are to create UGC.

Examples of UGC in campaigns and on product pages

Businesses can leverage UGC for ecommerce in multiple ways. Now, we’ll look at some of the examples of UGC campaigns and UGC on product pages.

Sephora: Shoppable UGC galleries

Cosmetics powerhouse, Sephora, launched a marketing campaign for the Beauty Insider Community, utilising social media platforms to shift the focus towards UGC. It enabled the shoppers in their community to communicate with beauty experts and fellow shoppers, helping them to make informed purchasing decisions. 

The UGC campaign encouraged the users to participate in their community by posting pictures, making product recommendations, and posting expert reviews based on their experiences. Furthermore, users could also make purchases directly from Sephora’s Community Gallery by clicking on the post. The campaign was successful, using UGC galleries as visual commerce, driving product discovery and conversion.

Pro tip: Dropshipping businesses can create shoppable UGC galleries, similar to Sephora's, on platforms like Pinterest to showcase their products.

Coca-Cola: “Share a Coke” campaign

Another great example of a user-generated content campaign was Coca-Cola's ‘Share a Coke’ campaign. The company printed 150 of the most common names on Coca-Cola bottles with the phrase ‘Share a Coke with …’ and asked people to share it with their loved ones, family, and friends. This UGC campaign was customised in over 80 countries to make it relevant to local target audiences. 

The campaign became a huge success with social media users enthusiastically sharing photos with the branded hashtag #ShareaCoke. They came up with creative Instagram posts and selfies with branded hashtags to show user participation in this popular trend. Furthermore, the company gained roughly 25 million new Facebook followers and over 500,000 images shared during the campaign using the hashtag. It was one of the longest-running UGC campaigns and pulled in millions of dollars and countless impressions.

Quay Australia: UGC on product pages

Quay Australia, a popular sunglasses brand, effectively incorporates UGC on its product pages to enhance customer engagement and drive conversions. Visitors to this brand’s product pages can see how different sunglass styles look on real customers, providing potential buyers with real photos of how others style and wear their sunglasses. Incorporating visual content, such as customer photos, with written reviews on product pages helps build trust and drive sales through genuine social proof. Shoppers are also encouraged to share their photos and experiences with #QuayAustralia directly on their product page.  

Legal considerations

While UGC can significantly improve a brand’s marketing efforts, it brings a set of challenges, such as copyright issues and privacy concerns, that businesses must carefully navigate. Before you incorporate UGC into your marketing strategies, you must understand its legal implications to avoid causing any UGC legal issues.

The following are some key laws and regulations that businesses should consider before incorporating UGC into their marketing strategy.   

Consumer protection laws

Ecommerce businesses must adhere to the Australian Consumer Law by ensuring that UGC accurately represents products to avoid misleading consumers.

Privacy laws

Laws, such as federal privacy laws, including the Privacy Act 1988 and the Australian Privacy Principles (APPs), govern the collection, use, and disclosure of personal information and UGC. Businesses must adhere to these privacy principles when handling user data and obtain consent for its use. 

Defamation laws

Businesses need to be mindful of defamation laws when dealing with UGC that could potentially harm the reputation of individuals or other businesses. Implement procedures to address defamatory content if it arises. 

Copyright and intellectual property laws

Ensure compliance with copyright and intellectual property laws when using UGC. Obtain permissions for the use of content that is subject to copyright and respect the rights of content creators. 

Advertising standards

Businesses must ensure that the UGC used in promotions or advertising complies with the standards set forth by regulatory bodies such as the Australian Competition and Consumer Commission (ACCC) and the Advertising Standards Bureau. 

Online safety regulations

Consider online safety regulations, including those related to cyberbullying, harassment, and harmful online content. Implement measures to protect users from harmful UGC and establish procedures to address any complaints. 

Summary 

Your business doesn't have to be as gigantic as Apple or Coca-Cola to benefit from UGC. Whatever the size of your business, the benefits of incorporating UGC into your content marketing strategy are the same. UGC has been widely accepted as a part of social media marketing to increase consumer engagement. As consumers increasingly look to social media for recommendations and feedback when making purchases, creating authentic user-generated content campaigns can provide authenticity, encouraging purchasing decisions. Furthermore, by leveraging authentic UGC for your brand's marketing strategy, your business can connect with customers, build trust and credibility, and foster brand loyalty like never before. It can also help build lasting relationships with customers.