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Is influencer-guided shopping the future of retail?

Publisched on
January 1, 2022


Social media platforms are becoming increasingly shoppable, with Instagram and TikTok leading the way with their in-app shopping capabilities. Even Twitter recently debuted its own commerce feature, with Walmart being the first retail brand to use ‘Live Shopping’ on the platform.

As social commerce grows, so does the opportunity for influencers (or creators, as many prefer to call them) to become the ‘shop window’ for brands.

But is influencer-guided shopping really the future of retail?

Robin Ward, Head of Sales for creator-driven marketplace LTK, believes so, telling Econsultancy how recent investment has resulted in “100%+ growth year-on-year in the number of creators joining LTK” as well as “100% growth in investment from brands by the end of 2021.”

A more authentic source of shopping inspiration

So, we know that brands are increasingly investing in influencer-driven marketing, but is this being reflected in more than just surface-level engagement on social? And do consumers even trust influencers nowadays, given previous controversy over ASA guidelines?

Ward argues that influencers can actually help brands to generate deeper levels of trust, by acting as a “more authentic source of shopping inspiration to consumers.”

“[Creators] have established communities, and all of their followers have opted to view and tap into their trusted advice and sense of style they have spent time nurturing,” says Ward.

“They speak with their audiences daily (often one-to-one), and they understand them intimately in more ways than a brand can. As a result, creators can connect deeply, because their audience relate to their personality – they see a bit of themselves in the way they live, their body type and how they choose to style themselves.”

Consequently, when it comes to influencer content versus traditional advertising, Ward says that the former instils a much more immediate sense of trust, which “ultimately,” he says, “helps brands drive greater sales opportunities and build longer-term customer loyalty.”

An acceleration of long-term partnerships

Long-term influencer partnerships have been gaining popularity for some time, but Ward says that there has been a real acceleration of this over the course of the last year, with the vast majority of brands transitioning from one-off campaigns to ‘always-on’ strategies.

“This shift has been underpinned by a boom in the creator commerce industry, as retailers put more of their focus on ecommerce channels with proven performance when it comes to sales and conversion,” he says. “The creators have a strong understanding of the brand, and when they are treated as ambassadors, the business priorities and messaging is better instilled and relayed back to their audiences.” In turn, he says, “when a consumer sees repeat brands being incorporated in their favourite creators’ everyday life, this increases consumer confidence in purchase and the versatility of a brand. This will yield greater performance over time.”

Ward recommends that brands should take a data-driven approach from the outset, particularly when it comes to finding the right influencer for their campaign. “Insights on creator, channel and content performance, should all inform how these partnerships are shaped and optimised for full-funnel performance,” he says. “Accurate data and sales intelligence also help brands find influencers with an audience primed to shop their products.”

LTK has found success with this approach and its always-on, strategic partnership with Missguided. According to Ward, the partnership has achieved a “165% increase in sales month-on-month” with influencer marketing also contributing to Missguided’s 2020 revenue growth, which saw a rise of 92% year-on-year.

Filling the gap between online and in-person retail 

With consumers becoming increasingly comfortable shopping on social channels like Instagram, LTK aims to capitalise on this behaviour with its own app, which enables users to shop directly from their favourite creators (giving them a more focused experience). But, how does LTK encourage users to shift away from Instagram?

Interestingly, Ward suggests that influencers are “filling the gap in the market between online and in-person retail.” In other words, offering both shopping inspiration and valuable advice on how to wear items. At the same time, he proposes that the LTK app is a way for users to avoid the bombardment of online content they see daily, instead offering “a curated and personalised way to filter through tried and trusted recommendations.”

“Conversion rate inside the LTK app is four times higher than when a consumer clicks on a shoppable link on social media,” he says. “We’ve also seen a 32% increase in product searches in the LTK app in the UK alone over recent months.”

Ward says a dedication to shoppability – and the fact that consumers know that its purpose is purely for shopping rather than entertainment or news – also drives these valuable metrics. Though of course, the future of influencer marketing includes a variety of owned, earned and paid platforms.

“Over the last decade we’ve built out and refined our insight and proprietary technology for brands and evolved the LTK app so that it provides an elegant shopping experience for consumers, and a flagship storefront for creators,” he says.

Delivering the right influence at scale

While Instagram tends to be focused on driving advertising for its own benefit, Ward says that LTK’s business model is innately geared around how it can benefit both creators and brands. (LTK takes a cut of the affiliate commission that creators earn from content.)

Ward says that LTK’s “three-sided marketplace can offer a range of valuable insight on brand, creator, and consumer sales data. As a result,” he explains, “LTK can offer expert consultancy with the ability to deliver the right influence at scale.”

This also means that brands can reach both mainstream and niche audiences on a global scale, as well as “accurately measure the reach and genuine sales driven from creator commerce. It allows them to comprehensively review and assess creator campaigns and their ROI in real-time.”

Indeed, LTK has gone through a significant period of growth in recent months, reaching a valuation of $2 billion on the back of a $300 million investment from SoftBank’s Vision Fund. However, Ward says that, in the UK, LTK is only seeing the beginning of ‘creator commerce’, with this set to accelerate following “95% growth in sales in the UK over the last year.”

Looking ahead to 2022, LTK’s continued focus will be on ‘Creator Commerce 2.0’, aka creator or influencer-guided shopping. “Creators are the new retailers and curators of brands,” reiterates Ward. “They are owning the shopping experience, and soon, consumers will start and end their retail experience with the creator through one, owned flagship store: their LTK Creator Shop.”

It’s a bold vision, of course, particularly up against the behemoth force that is Instagram. But with fresh investment and now more than 150,000 creators operating via its platform, LTK is certainly serious about being a driving force within social commerce.

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