How influencer-led retail marketing promotes authenticity and transparency

In the age of social media, traditional advertising and marketing have completely transformed, especially in the past decade.

Consumers need more than impressive billboards or advertisements to put their trust in a brand. Many now look to influencers, content creators, or other consumers before purchasing a product or service.

Per a recent PYMNTS intelligence report, 56% of shoppers in the US make at least one annual purchase based on influencer recommendations, while 12% make more than six.

Authentic authority

A key driver behind this creator-led retail marketing growth is a longing on the part of consumers for authenticity and transparency.

“Customers want to reduce the gap between their experience and also the information created by the sellers or the brands,” Minkyung Kim, assistant professor of marketing at Carnegie Mellon University’s Tepper School of Business, told Retail Brew. “That’s why there are a lot of things like social commerce or online reviews that actually lead brand marketing in retail, because that kind of authenticity, the closer distance, and bridging the gap between their experience and the information really matters to the customers.”

This has specifically been true for categories such as beauty and fashion where influencers are able to capture significant audiences.

“For apparel or beauty, the fit between the customer and the product is more important,” Kim said. “That’s where customers seek more information for authenticity and credibility.”

User case

And this “authenticity” also drives real results. Kim explained that a major metric for measuring whether creator-led marketing or user generated content impacts profits or sales is product returns.

“Online reviews help reduce product returns, because that gives more detailed and authentic information to the customers that they could not really see from the seller- or brand-generated information,” she said. “So it’s not only the sales, but reducing the product returns is becoming more important because of shipping, customer service, and all kinds of unnecessary [logistics] costs that the brands have to incur.”

The PYMNTS study found similar results. In the survey, 44% of consumers said they returned influencer-recommended products “less often than other items,” compared with the 24% who said they return those products more often.

And while metrics for conversions and sales directly tied to influencer marketing are not as simple to determine as some other channels, brands increasingly see a lot of value in it.

According to a 2022 Harvard Business Review report, the influencer marketing industry hit $16.4 billion with more than 75% of retailers dedicating budgets to it.

Catching a shift

In fact, the format has become so intrinsic to retail marketing today that many lifestyle and fashion brands are now posting their own influencer-style social media videos to maximize their margins instead of relying on well-established creators or celebrities, according to a New York Times report.

“In the last sort of 10 years, there’s been a massive shift in terms of the way that customers want to be marketed to,” Emma Shepherd, head of marketing at fashion brand Damson Madder, told the publication. “Peer-to-peer marketing has become such a huge part of how customers interact with brands and how customers want to be sold to. Gone are the days where customers want brands to kind of be really autocratic and tell you: ‘This is what you should wear. This is what’s on trend.’”

The industry is likely to continue to grow with companies becoming ever more adept at targeting a range of consumers with influencer- and creator-led content.

“I think many brands are actually running a lot of experiments to test if the specific component of the promotion really works or not,” Kim said. “So for example, they turn on and turn off some kinds of specific messages to some target customers, and that’s becoming more and more feasible due to the digital aspects of this kind of marketing. Most of this [type of] marketing is online and really targeted to a specific set of customers…That’s why they are improving in terms of the attribution and measurement.”

In short, marketing has shifted from brands talking at consumers to creators and customers talking about them. And as retailers refine the tools that track conversions and returns, storytelling may become one of the industry’s most measurable growth strategies yet.