Embracing Influencers: Could the Chinese Retail Model Work in the UK?
The pandemic accelerated social commerce across the globe. As shoppers flocked online, social media platforms shifted their interface design to become increasingly shoppable – with Instagram and TikTok, in particular, launching intuitive in-app shopping capabilities.
The popularity of in-app shopping forced brands to recognise social commerce as a key element of their marketing strategy. Brands across all retail categories began to partner with influencers as their new ‘digital shop window’. As well as promoting sales, discounts and giveaways, influencers act as an authentic source of shopping inspiration for consumers, helping brands generate deeper levels of trust and loyalty. The possibilities are endless, and the potential continues to grow.
Since its pandemic-induced boom, influencer-retail has become even more popular. According to Shopify, in 2021, roughly $3.7 billion was spent on influencer marketing in the US alone – a 33% increase compared to 2020.
But despite its continued popularity, it’s fair to say that the influencer-retail model hasn’t reached anywhere near its full potential in the US or Europe. It’s Asian brands that are leading the way – and customers have engaged in their millions. The mountain of influencer-retail potential is huge – and who sits atop? Chinese influencers. And the biggest of them all is Li Jiaqi.
Boasting millions of social media followers, China’s ‘Lipstick King’ exemplifies the power of influencers. He once sold 150,000 lip glosses during a one-hour livestream, and is able to pull in $145 million a day in sales. Li Jiaqi has also featured in major campaigns for KFC, Uniqlo, Dr. Jart+ and Paris Fashion Week. His impressive reach is valuable for retail brands in all categories, but he’s not the only influencer making waves in China – far from it.
The influencer-retailer model is booming in China, and is estimated to have generated around £136 billion in revenue in 2020. But is influencer-guided retail really the future of shopping in the UK?
To find out, we conducted a large-scale survey into how UK retail workers view the future of their industry. We surveyed 100 senior IT decision makers (ITDMs) and 200 frontline workers to discover their predictions. The overwhelming majority (91%) of ITDMs believe that influencers will be used across both physical and digital channels to sell products.
Resoundingly relatable vs captivatingly cool
It can be tempting for brands to choose the coolest influencer they can afford with the most followers. Instead, retailers should opt for influencers that are relevant to their target audience – even if they have a smaller following. In fact, micro influencers (accounts with between 10,000 and 100,000 followers) often have more impact than their larger counterparts. Seemingly authentic endorsements by smaller accounts tend to have higher engagement rates and are more likely to drive sales. Micro influencers also typically charge less for partnerships, resulting in lower costs and higher ROI for brands.
The rise of virtual idols
At the opposite end of the authenticity spectrum, brands are starting to create ‘virtual idols’ in the metaverse. These hyper-realistic, computer-generated influencers take up positions as brand ambassadors in the virtual realm, helping retailers build their profile and amass younger, digitally native followers.
Again, Chinese retailers were the first to tap into this innovation. In May 2022, Alibaba Group, in collaboration with Ranmai Technology, launched Ayayi – China’s first virtual idol. She’s known for her pearlescent hair and calm personality, helping her gather over one million social media followers. Ayayi has since partnered with over 30 high-end fashion brands – including Louis Vuitton, Burberry and Prada – and featured in marketing campaigns in China.
Alibaba’s latest creation – a virtual idol called Noah – was developed based on consumer surveys. More than 21,000 people voted on his personality, skills and physical appearance, resulting in a cool, dark-haired male model who can dance like a K-pop star.
Just as we all enjoyed creating our own characters in The Sims, this mass customisation helps build connections between the consumer and the virtual idol at scale – making Noah potentially the most effective influencer yet.
The most influential people on the internet
While retailers in the West are still behind China in the pursuit of virtual idols, early adopters of virtual influencers are starting to rack up significant sales.
One of the first digital influencers, Lil Miquela, shot to fame in 2016, when the ‘19-year-old’ went viral on Instagram. The Gen-Z-targeted influencer has since been named Time Magazine’s ‘most influential person on the internet’, garnered 2.9 million followers and set the trend in motion for fashion brands to adopt computer-generated influencers.
In a relatively unexpected move, British heritage brand, Marks & Spencer, launched their own virtual influencer in October last year – Mira. Despite sharing only six posts on her dedicated Instagram page, Mira has already gained almost 5,000 followers. She’s an extension of M&S’s real-life influencer programme, launched to discuss style inspiration, promote products and engage in trending conversations online. Mira is also a bid for the brand to connect with a younger audience via social media.
While Mira represents an innovative move for M&S, she also highlights the ubiquity of virtual influencers across the retail market– and the long-term potential of influencer marketing.
Whether virtual or real, influencers have the power to impact the future of your retail business – and you need to be ready to embrace it. Influencer marketing can significantly increase sales, so you need the infrastructure in place to process orders quickly and efficiently. And depending on the frequency of your partnership posts, it can also widen the gap between peak and off-peak periods.
A better network for a brighter future
At TalkTalk Business, we provide retailers with the network they need to flex to changes impacted by influencer marketing. Your network is designed around you. You’ll have the speed, flexibility and rock-solid resilience you need to provide exceptional influencer experiences.
To learn more about the future of retail – and how retailers are embracing the influencer-retailer model across the UK – read our exclusive whitepaper: The Future of Retail: Automated or People-Powered?
About the research
In September 2022, we commissioned a survey by Vansorn Bourne in September 2022 of 300 senior IT decision-makers and frontline employees in business sizes ranging from 1,000-2,999 employees to those with 5,000 or more.