The top of your funnel is always hungry. With Google’s imminent cookie phase-out, increased data privacy regulations, and the impact of Apple’s iOS updates on Facebook advertising, it has become a lot harder to feed the funnel using third-party data to find and acquire new customers. If there’s a silver lining to this situation, it’s that the necessary increased focus on fostering relationships with customers means you’ll understand them better and be able to provide better experiences, ultimately increasing customer lifetime value.
Still, you can’t ignore acquisition, which is vital to a healthy business. What’s a brand to do? Many brands are looking to influencer marketing to help fill the gap.
What the influencer market looks like
Influencer marketing has been effective for many brands, so an entire global market – valued at $16.4 billion – has sprung up around influencers, more than doubling since 2019. Spending on influencer marketing in the U.S. hit $4.14 billion in 2022. Which brands are participating? Fashion and beauty leads the pack as the most popular vertical for influencer marketing, followed by gaming, travel and lifestyle, and sports.
Who are “influencers?” Influencers are people with larger-than-average, very engaged groups of social media followers. They can really be anyone, not just people we traditionally think of as celebrities. This universal access to becoming an influencer makes it attractive to a lot of people. In fact, one survey shows that 86% of Gen Z and Millennials say they would post sponsored content for money and 54% said they would become influencers if given the opportunity.
Of people who already are influencers, 94% say they want more social media partnerships with brands. More brands seem to be reaching out: according to one survey, 46% of influencers say they saw an increase in brand partnerships in 2023.
Why influencer marketing works
It’s not rocket science to understand why influencer marketing is effective. Essentially, it’s another form of word-of-mouth advertising, which consumers have trusted ever since humans have had something to sell. Even today, 83% of Americans say they are more interested in buying a product after receiving a verbal recommendation from a friend, and 77% of people worldwide say advice from family and friends is the most persuasive form of product information.
Although influencers aren’t technically friends or family, they are usually peers and have built trust and rapport with their followers because they understand what their audience likes. Followers listen to them for recommendations because they have a track record of creating content and showcasing products and services that resonate with their audience’s interests and values.
Also, influencers’ interactions with products and services serve as demos for potential buyers. In their videos, influencers are trying out products, showing what they can or can’t do, and giving viewers more information than they can get from an eCommerce site.
In addition, influencers entertain with their content – so followers like to tune in to watch.
Finally, influencer marketing may be effective because it doesn’t feel intrusive. The viewer is in control of the relationship – they choose if they want to watch or follow or not. It’s a transparent relationship and easy to opt-out.
How brands work with influencers
Relationships between brands and influencers are most commonly one way, such as a brand sending new products and discount codes to influencers to share with their followers. However, relationships also can be bi-directional. For example, some brands form more long-term, collaborative relationships with influencers, including them in product or services development or marketing campaign ideation processes.
The costs of working with influencers depend on how many followers an influencer has – there are “mega” and “macro” influencers with millions or hundreds of thousands of followers, but also “micro” and “nano” influencers with thousands of followers. Many brands work with multiple micro and nano influencers – not only are they more cost-effective, but they often have the most engaged audiences and can help brands be more targeted and successful in converting customers.
Glossier is a prime example of an eCommerce brand that has built its success on micro-influencers, who are also customers, talking about and promoting their favorite Glossier products. The company also develops new products based on what its customers say they want or need.
Gymshark was an early adopter of influencer marketing, sending free samples to top fitness YouTubers that the company founders enjoyed following. Today, the brand has a robust influencer program and even hired a bodybuilder influencer as its creative director.
Hair care brand Briogeo is another example of a company in the beauty space that has collaborated with influencers for new product launches. It also does outreach to influencers on TikTok whose followers rely on them for hair care, hair styling, and other beauty and lifestyle tips.
How Shopify Collabs connects brands and influencers
Finding the right influencers for your brand may seem like a daunting task. Fortunately, technology exists to help streamline the “dating” process between brands and influencers – helping both sides find the right fit, as well as manage inventory and track performance. Shopify Collabs is one of these tools that brands can leverage.
Shopify Collabs functions as a marketplace for both merchants and influencers who want to connect. Brands can search and choose from millions of influencers who create content for different social media platforms, including Instagram and TikTok. Brands can create a recruiting page on the marketplace, outlining their criteria for the type of influencer they want to work with and what they offer their influencer community. Influencers can easily apply to work with brands, redeem gifts, receive product, and use the platform to keep track of all of their partnerships. Influencers are paid by the brand through the platform when followers make a purchase.
Shopify Collabs also aids in managing ongoing relationships, enabling brands to set up customized subscription programs for influencers, send them product, and track the inventory within the Shopify admin.
Where we’re headed: Live shopping
Although live-streaming or live shopping isn’t popular in the U.S. yet, TikTok is betting it will be soon. The company is investing in building a U.S. market for live shopping, as it looks to replicate the successes of live shopping in China. Although China’s live shopping market had a compound annual growth rate (CAGR) of more than 280% between 2017 and 2020, there have been recent signs it may have reached saturation. Social platforms, marketplaces, and brands are all trying to crack the live shopping nut in the U.S. market.
TikTok’s strategy is a long-term play: to build demand for live shopping in the U.S. To do this, TikTok is partnering with influencer agencies to recruit and instruct influencers on how to grow audiences and sell effectively. The company also has partnered with TalkShopLive to build awareness of live shopping and to grow audiences. TikTok also launched a $200 million TikTok Creator Fund to support creators, including those who do live streaming.
Because eCommerce is thought of as a time-saver by most U.S. consumers, experts predict it will take some time to “train” consumers to want live shopping as a form of entertainment.
Influencer marketing future: Virtual influencers
Not all influencers are human. In fact, there are a handful of brands that have created digital influencers with millions of followers on social platforms. It seems that as long as a brand is transparent about having a non-human avatar, consumers like to follow them as they comment on social issues, interact with human celebrities, appear in videos – and recommend products. Check out Lu in Brazil, Lil Miquela Sousa in Los Angeles, Shudu in South Africa, and Imma in Japan. The benefits of going virtual are cost (of course), but also control – no need to worry about human bad behavior or any change in physical appearance. (Is this a moral and ethical can of worms? That’s a discussion for another time.)
Determining if influencer marketing is right for your brand
Should your brand do influencer marketing? You may want to seriously explore it if you are a fashion or beauty brand, or if many of your customers are Gen Z and/or women. Gen Z is the demographic that’s most likely to follow brands and influencers on social media. And, more than half of women say they have bought a product or service as a result of an influencer post. Although there is some setup required, Shopify Collabs is free for Shopify merchants – there’s even a feature that lets you set up a custom survey for influencers when they apply to work with your brand, so you can learn as you go. Want to know more? We’re happy to discuss acquisition strategies and how to effectively balance tactics like influencer marketing with retention strategies to grow your business. Give us a call!
