NEW YORK, United States — "Social proof," or the human tendency to trust and follow the actions and choices of other people, has always influenced consumer purchasing behaviour. For many years, e-commerce sites have leveraged social proof in the form of peer-to-peer recommendations systems (usually text reviews and ratings) to increase conversions. But today, especially in visually-driven product categories like fashion, the most powerful social endorsements often take the form of user-generated imagery.
Rent the Runway, a website that rents out high-end clothing and accessories to consumers for a few days at a time, encourages users to submit photos of themselves wearing their rentals and claims that its customers are 200 percent more likely to rent a dress after viewing these user-generated photos.
But a large volume of influential user-generated imagery is posted away from e-commerce sites on photo-sharing platforms like Instagram, where consumers regularly upload pictures of products they have just bought or aspire to own.
Now, Olapic, a New York-based start-up founded by Jose de Cabo, Pau Sabria and Luis Sanz, aims to connect the dots, using hashtags to search and source relevant user-generated product imagery uploaded to Instagram, Twitter and Facebook, and integrate it directly into the e-commerce sites of its clients.
“Apps like Instagram have made photo-sharing more of a way of communicating and less of a way to show what a great photographer you are. We’ve figured out a way for companies to engage in a visual conversation with their audiences,” said Pau Sabria, a former management consultant at The Boston Consulting Group and a co-founder of Olapic, which has raised a total of $6 million in funding from investors including Fung Capital USA, the private equity arm of the families of Victor and William Fung.
But while competitors like Chute also help brands to gather and display user-generated images sourced on social media platforms, Olapic is tightly focused on making sure those images help sell product and offers a built-in analytics platform that allows retailers to quantify just how many sales each image helps to drive. So far, the company's client list includes Coach, Equipment, Guess, New Balance, Threadless, Nasty Gal, Lululemon and BaubleBar — and early results are promising.
Compared to traditional digital marketing campaigns, Olapic-powered user-generated image campaigns have lifted conversion rates by between 7 and 60 percent, with clients reporting an average increase of over 30 percent, according to data provided by the company.
For example, a campaign promoting the Heidi Klum for New Balance collection, which saw over 6,000 Instagram photos tagged "#HKNB" posted to the Heidi Klum for New Balance landing page, drove a conversion rate of 39 percent, according to Olapic. Meanwhile, a campaign for Threadless, built around the hashtag #threadpics, generated more than 4,500 photos of fans wearing the brand’s crowd-designed t-shirts, which were aggregated and displayed on a dedicated webpage. Users who visited the page were seven times more likely buy something, according to Olapic.
The company also claims that time spent on its clients’ websites typically doubles once their solution is implemented, while average order value increases by anywhere from 2 to 10 percent. Clients have also seen a drop in returns, the company added.
Affordable jewellery site BaubleBar started using Olapic in May 2013. “We already had a strong online community that organically shared what they wear and how they style their BaubleBar jewellery on social networks,” said Daniella Yacobovsky, co-founder of BaubleBar. “But what’s great about Olapic is that we can take this organic sharing activity and make it shoppable [on our website].” While Yacobovsky declined to share specific conversion rates, she characterised them as “strong.”
But what are the legal issues around leveraging user-generated imagery shared on social platforms as de facto advertising on e-commerce sites?
Collecting imagery marked with a campaign-specifc hashtag like #HKNB is one thing. But what if an unwitting user simply uploads a photo of a pair of shoes with a more generic hashtag like #nike? Does Nike then have the right to use Olapic to integrate that person's image into its e-commerce site and leverage it to drive sales?
Typically, when uploading imagery to social platforms like Instagram, Twitter and Facebook, users surrender ownership of their content to the company that operates the service. Additionally, Olapic insists that the photos and videos collected and displayed using its platform are not technically advertising — and therefore comply with the terms and conditions of Instagram and other photo-sharing networks, which allow their content to be embedded across the web.
But that’s not the only issue. “If one of the users uploads another's copyrighted material without permission, then both the uploader and the website could be held liable for copyright infringement,” said Brian D. Wright, a lawyer at Faruki Ireland & Cox, a US firm specialising in complex business litigation. "The website owner would be eligible for immunity protections in the Communications Decency Act and the safe harbour provision in the Digital Millennium Copyright Act,” he continued, “but it’s a tricky area and riddled with legal complications, if not properly managed.” To guard against such issues, Olapic heavily monitors the photos it includes on brands' websites and encourages its clients to do the same.
As for the future, “we’re very ROI focused, so we’re exploring different features that could generate a lot of value for our customers,” said Sabria. “Newsletters are a huge component to e-commerce — and increasingly, mobile and video. We basically want to make the whole experience more seamless.”