The digital world has led to the democratization of the luxury market, placing high-end goods in the hands of those historically unable to afford them. As a result, some of the most coveted brands no longer feel as selectively exclusive or unapologetically elite as before.

Luxury brands now face the complex task of being inclusive and exclusive. Failing to strike a balance could mean risking a loyal clientele and alienating prospective customers. One possible solution is user-generated content (UGC).

Trusted referrals

UGC is in the strategy mix of nearly 75% of U.S. marketers, and for good reason. The reach alone can be worth its use, with TikTok, Instagram, YouTube and other social media platforms touting more than a billion monthly active users. UGC puts products in front of the right people at the right time in the right channels by capitalizing on organically posted content from followers.

UGC also affords luxury brands much-needed social proof. If content creators post a positive product review, their audience is likely talking about it. UGC is the modern form of word-of-mouth marketing, which already drives $6 trillion in annual global spending and is estimated to account for 13% of consumer sales. 

Consumers are much more likely to trust a referral from a digital influencer or someone they know over that of a brand. In fact, nearly 80% of consumers say UGC highly impacts their purchasing decisions. UGC’s ability to connect authentically and directly build trust within an audience helps to keep a brand top of mind.

Capturing brand identity

Integrating UGC into a marketing mix effectively can be challenging—even more so for luxury brands, who can’t be sure users will appropriately capture the brand’s heritage or aspirational identity.  This can limit the number of consumers who can represent products accurately and the frequency with which products are displayed in front of consumers.

Then, there’s the matter of rights to the advertising. Creators can reserve the right not to allow a brand to utilize their work—a problem marketers can circumvent with a paid collaboration, but this can be costly.

Here are three strategies about how UGC can be leveraged for luxury brands:

Understand the algorithms

Engagement is the key to UGC success. Encourage the creation of content by offering incentives, contests and challenges—and welcome content that prompts viewers to like, save and share the posts with calls to action.

Utilize hashtags and mentions to further amplify the reach. Apple's decade-long #ShotonIPhone campaign is a good example of a successful foray into UGC. The company enlisted its users to address creative frustrations that some iPhone customers were having with their cameras. The result has been a continuous loop of stunning imagery and user engagement. In 2023, some participants even started submitting short-length movies to share on social platforms using the hashtag. 

Welcome feedback from consumers

Product reviews, testimonials and surveys are more than just UGC. These tools can be to gain valuable insights. Online pet supplier Chewy takes pride in “surprising and delighting” customers in every transaction—and goes the extra mile to be there during tough times. Customers who contacted Chewy for a food-purchase refund after a pet’s death also received flowers or custom artwork to acknowledge their loss. The word-of-mouth social advertising this inspires is pure gold—all because Chewy listens to its customers.

Create an ambassador program

An ambassador program helps to formalize the process of recruiting and familiarizing consumers with your brand. These can be paid or unpaid—with unpaid bringing one caveat: A brand may need to slip them free products in return for UGC. With paid, they’ll serve as field marketers who are capturing live content in your brand's industry and providing invaluable insights for your business. Find which ambassadors are right for you and start building loyalty.

UGC will continue to be a long-term, strategic word-of-mouth marketing effort for luxury brands long into the future. But so long as brands strike an even balance between branded posts and organic content, their heritage will remain intact and their reach will continue to grow.