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THE HIDDEN TRUTHSTHE HIDDEN TRUTHS
Merchant and Customer Perspectives on ReviewsMerchant and Customer Perspectives on Reviews
Lauren FreedmanPresident
the e-tailing group
Jay ShafferVP of Sales & Marketing
PowerReviews
Housekeeping…Housekeeping…
• Following today’s presentation, the subsequent White Paper will be emailed to all attendees
• White Paper is also available at www.powerreviews.com
• Webinar will be recorded for viewing with presentation available on PowerReviews’ website
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Jay ShafferVP of Sales & MarketingPowerReviews
• Retailer by heart and by trade
• Long career in customer advocacy
• VP of Customer Experience @ Wine.com
• VP of Marketing @ Directly Home
• Director of Customer Acquisition @ Ofoto.com (KodakEasyShare)
Jay Shaffer is VP of Sales & Marketing at PowerReviews, where he educates online retailers about its Customer Reviews Solution and promotes Buzzillions.com, its performance - based shopping research portal.
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About PowerReviewsAbout PowerReviews
• Fully outsourced and managed review solution• Focusing on the challenges of online retailers• Social tag-based reviews for greater relevancy
– Individually expressive– Product specific conversations– Normalized data collection
• Interests with merchant partners aligned• Monetize our relationship on Buzzillions.com
shopping portal
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220+ Retailers Leveraging PowerReviews220+ Retailers Leveraging PowerReviews
Why Did We Do The Research?Why Did We Do The Research?
• Understand the use of reviews by current online shoppers: convenience vs. commitment
• Confirm our vision of Social Navigation – how much do shoppers really like and want this new way of shopping?
• How merchants define the “success” of reviews on their site?
• How do merchants measure ROI?
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Lauren FreedmanPresidentthe e-tailing group
• Her company's “annual mystery shopping” and merchant surveys provide a comprehensive overview of the state of e-commerce, setting industry standards while simultaneously highlighting best practices.
• Proprietary consumer and merchant research studies on in store pickup and gifting
Strategist, Merchant, Facilitator, Educator and Spokesperson for sites that have included:
• Toys "R" Us• The Vitamin Shoppe• J.Jill• Scholastic• West Marine• Mercado• ATG
Author, "It's Just Shopping“, a comprehensive, behind-the-scenes look at the evolution of multi-channel selling.
In 1994, Lauren Freedman leveraged her 15 year retail and catalog career and passion for merchandising to found the e-tailing group, inc. The firm's mission is providing strategic and e-commerce solutions to online merchants as well as businesses targeting that market.
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The PresentationThe Presentation
Consumer Survey Methodology & Sample The Consumer Perspective The Merchant Perspective Execution Measurement Techniques Future Initiatives
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Consumer Survey: Methodology And SampleConsumer Survey: Methodology And Sample An online questionnaire was completed by 1,200 consumers (50%women/50% An online questionnaire was completed by 1,200 consumers (50%women/50%
men) who shop online at least 4 times per year, spending $500 or more men) who shop online at least 4 times per year, spending $500 or more annuallyannually
Q3
How often did you shop online for products during the last year?
25%
45%
20%
10%
Weekly Several times a month Once a month 4 times per year
How much do you spend online annually?
35%
20% 20%
25%
$500 - $749 $750 - $999 $1,000 - $1,499 $1,500 or more
• 70% of respondents shopped online more than once a month last year
• 65% of those surveyed spend $750 or more online annually
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Top-line Findings: The CustomerTop-line Findings: The Customer• Consumers show a “dependency” on customer reviews, becoming addicted to the
value
• These power shoppers, coined Social Researchers, have a propensity to “always” read reviews with significant time invested in the process
• Reviews are valuable regardless of the product category • Customers prefer to know what other customers think rather than being shown the
“merchant” point-of-view
• Understanding the selections and preferences of like-minded individuals is appealing
• Women are driven by convenience, reading reviews where available while men seek out multiple sources to satisfy informational needs
• Decision-making is “all in the edit” as information that fosters customer selection from product pros and cons simplifies the task of narrowing downing choices
• Tools that use customer feedback throughout the shopping research process add value to selecting and purchasing a product
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The Raw Value of ReviewsThe Raw Value of Reviews
“No matter how many reviews they receive customers continue to add their voice. A product may already have a rating of 4.9/5 but someone will still write another positive review.”
“The consumers want their opinion out there as can be seen by this example where Phyllis has shared her story including sending images of her dogs.
Initially we were only going to ask for up to 20 reviews but have learned that 50 reviews are more valuable in terms of conversion and the bottom line.”
John LazarchicVP of E-commerce, Petco
Petco Product Review
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Confidence, Trust, and Conversion Result Confidence, Trust, and Conversion Result
“At Staples everything onsite has to do with guest experience; giving guests confidence in buying,”
Peter Howard,Senior Vice President,Staples Business Delivery
Staples: Top-Rated Gifts showcasethe customer point of view
The “sticky” by-product adds long-term value as customers return and re-buy with trust already established.
The “unbiased” value proposition of reviews provides another viewpoint that is not directly connected to the merchant.
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New breed of shopper - “the Social Researcher”New breed of shopper - “the Social Researcher” they place particular emphasis on social feedback in they place particular emphasis on social feedback in
making product decisionsmaking product decisions
• 65% of online shoppers are Social Researchers who read reviews always or most of the time prior to making product purchase decisions
Of this group:
• 64% research products online more than ½ the time, no matter where they buy the product (store, web, catalog) vs. 54% of all respondents
• 76% find top rated products as rated by customers to be “extremely or very important” vs. 62% for all of these online shoppers
• 86% find customer reviews “extremely or very important” vs. 70% for all online shoppers surveyed
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Researching dominates consumer behavior Researching dominates consumer behavior and crosses channelsand crosses channels
54% research online more than ½ the time before buying in any channel54% research online more than ½ the time before buying in any channel
What percent of your overall shopping (store, web; catalog) involves researching products online?
22%
32%
23%
14%
8%
1%
> 75% 50% - 74% 30% - 49% 15% - 29% 1% - 14% None
Q3
• Men tend to be heavier researchers as 26% stated that more than 75% of overall shopping involves researching products online vs.18% of the women surveyed
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Most shoppers rely heavily on customer reviewsMost shoppers rely heavily on customer reviews65% of the time customer reviews are read “always” or “most of the time” 65% of the time customer reviews are read “always” or “most of the time”
prior to making a decision to purchase a productprior to making a decision to purchase a product
Q5
How often do you read customer reviews prior to making a product purchase decision?
22%
43%
24%
9%
2%
Always Most of the time Some of the time Once in awhile Never, I don't look atcustomer reviews
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Customer reviews foster decision-making Customer reviews foster decision-making in all stages of the shopping processin all stages of the shopping process
81% use customer reviews to decide between 2-3 products or to confirm that81% use customer reviews to decide between 2-3 products or to confirm thattheir final selection is the right one; 40% begin their shopping by reading themtheir final selection is the right one; 40% begin their shopping by reading them
Q7 (total 1171)
At what stage in the shopping process do you typically read customer reviews?
53%
40%
28%
22%
1%
When I'm trying to decidebetween 2 or 3 products
When I begin my shoppingresearch
After I narrow it down to oneproduct and I want to confirmthat it is the right one to buy
Just after I figure out my budgetand the product features I need
Other
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Of those who read customer reviews, Of those who read customer reviews, 61% typically spend 5-29 minutes reading them61% typically spend 5-29 minutes reading them
Note that ½ the respondents spend 10 minutes or more reading these reviews. Note that ½ the respondents spend 10 minutes or more reading these reviews.
Q11 (total 1171)
How much time do you typically spend reading customer reviews for products?
19%
29%
13%
5%2%
32%
Less than 5minutes
5 - 9 minutes 10 - 29 minutes 30 minutes - 1 hour More than 1 hour No time - I don'tread customer
reviews
• A greater percentage of surveyed men (59%) typically spend more than one hour reading reviews vs. women (41%)
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74% want to read a minimum of between 2-7 customer 74% want to read a minimum of between 2-7 customer reviews to have sufficient confidence to judge a productreviews to have sufficient confidence to judge a product
Note: 68% want to read more; specifically between 4-15 reviewsNote: 68% want to read more; specifically between 4-15 reviews
What is the minimum number of customer reviews on a product you need to read to give you sufficient confidence to judge that product?
4%
28%
17%
3% 2%
46%
1 2 - 3 4 - 7 8 - 15 16 - 25 > 25
# of customer reviews
Q12 (total 1172)
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Social NavigationSocial Navigation ((ability to narrow selection by customer feedback)ability to narrow selection by customer feedback)
• 82% of survey respondents found reading reviews better than researching a product in-store with a knowledgeable sales associate
• Social Researchers are 76% percent more likely to shop on a retailer’s website vs. a competitors’ site if it offers social navigation
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Consumers express where and howConsumers express where and howthey want to see reviews shownthey want to see reviews shown
When browsing reviews, shoppersprefer to read first:
• most current (45%)• most helpful (28%)
When searching for products on a retailer’s website, shoppers prefer tosee “top-rated” products listed first
• Highest customer rankings (53%)• retailer’s best sellers (20%)
Golfsmith landing page with Top Sellers
“People seem to enjoy the reviews, which serve as a sticky feature where guest satisfaction becomes the byproduct Matt Corey, VP Marketing, Golfsmith
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Social Navigation bridges the gap between Social Navigation bridges the gap between online and offline shopping experiencesonline and offline shopping experiences
Online Shoes – Social Navigation
• with Like Interests (64%)
• with Similar Uses (59%) for the product such as “for travel” or “for home office”
• who sought out the same product “Pros” (56%) such as durable, lightweight or easy to use
Study participants found it extremely or very helpful to narrow product selection based on feedback from people “just like them”
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Top-line Findings: Merchant StrategiesTop-line Findings: Merchant Strategies
• Reviews are a “must-have” merchant functionality to compete online today
• Reviews are not about ROI but ultimately about the evolution of the customer experience and the creation of communities
• Reviews provide a profitable and customer-centric entry into social networking and Web 2.0
• Merchant brand and their respective customers influence ability to generate reviews
• Site-wide integration coupled with an exploration of cross-channel tactics are next evolution of the feature set
• Long term, merchants believe that customer reviews will reward them with customer loyalty
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Customer Experience Tops the List ofCustomer Experience Tops the List ofWhy Merchants Add Reviews to Their SiteWhy Merchants Add Reviews to Their Site
Building customer loyalty and driving sales ranked #2 and #3
What were the 3 most important factorsin the addition of customer reviews on your site?
58%
47%42%
37%
21%
customerexperience
build customerloyalty
drive sales competitiveadvantage
fit with thebrand
% m
erch
ants
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Reviews Support Branding and Foster Reviews Support Branding and Foster LoyaltyLoyalty
“Ace is known as ‘the helpful place’ where reviews contribute by reinforcing the brand message.
With many of our customers being first time buyers, it’s an opportunity to also build a loyal base.”
Dana Kevish,E-commerce Marketing Manager, Ace Hardware
Ace Home Page Links: Top Rated + Featured Products, Top Sellers; What’s New
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Competitive Pressure is a Real FactorCompetitive Pressure is a Real Factor
“The social networking connection to ratings and reviews gave us an entrée into Web 2.0 without being over the edge.” Brad Wolansky VP of E-Commerce, Orvis
“REI was behind in the game; through site usability examination we found that customers were leaving the site to look at reviews elsewhere and that was eye-opening.” Ben Viscon, Director E-commerce, REI
“We recommend reviews to clients as the best entrée into social shopping, particularly in a retail context where the summary functionality is useful from the shopping experience perspective.” Rich Zapf, Sr. Product Manager, GSI Commerce
“Customers expect relevant content hat helps them make a purchase. It is important to meet that expectation.” Jay Gordman, Director of eCommerce, NetShops
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Customer Involvement Builds CommunityCustomer Involvement Builds Community
We make a concerted effort to listen to our customers; it’s part of our brand message that’s communicated on our home page and entrenched in our heritage where reviews facilitate such listening.”
Peter CobbSVP and Co-founder, eBags
eBags Home Page - “Don’t Listen to Us, Listen To Our Customer “ messaging supported by over 1.2 million reviews.
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Customers’ Passion For and Time Spent with Reviews Customers’ Passion For and Time Spent with Reviews Astounds Many MerchantsAstounds Many Merchants
“First and foremost reviews were seen as essential to our customers; more so than the product description…
It's been seven years [since we introduced reviews] so we believe in them.”
Spokesperson, Zappos
Zappos: product page – with reviews prominently featured
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Ancillary Benefits of ReviewsAncillary Benefits of Reviews
Reviews are intrinsic “low maintenance” customer service tools
Reviews serve as assortment advisors
Reviews optimize search by providing an organic lift
Reviews provide credible transparent feedback uniquely connecting merchants to their vendor partners
Loyalty and repeat purchasing is prevalent as Paragon Sports saw that repeat customers increased 20 percent since they implemented reviews with no other changes being executed onsite.
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Top-line Findings: Performance and By-ProductsTop-line Findings: Performance and By-Products
• Customer review measurement techniques are in their infancy
• The sweet spot of reviews not surprisingly is at the product page with email marketing also delivering positive results
• Biggest challenge is around populating both breadth of
assortment and the depth of any given sku with some variance based on the passion of the merchant’ community
• Customer satisfaction and site engagement are the biggest impact points from product reviews
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Beyond Categories That Typically Contain Reviews,Beyond Categories That Typically Contain Reviews,They Would Be Welcome In More CategoriesThey Would Be Welcome In More Categories
Toys & Video Games (69%), Sporting Goods (55%); Gifts/Specialty Foods (54%) topToys & Video Games (69%), Sporting Goods (55%); Gifts/Specialty Foods (54%) topthe list of categories where respondents would find reviews “extremely to very” helpfulthe list of categories where respondents would find reviews “extremely to very” helpful
Q10
For the following categories online where there have typically been limited product reviews, how helpful would reviews be
when deciding on the right product for you to buy?(Extremely-Very Helpful/Top 2 out of 5)
69%
55%
54%
48%
47%
45%
39%
33%
Toys and Video Games
Sporting Goods
Gifts / Specialty Foods
Beauty Products
Furniture / Home Decor
Baby and Juvenile Products
Shoes
Clothing / Accessories
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The Majority of Merchants Have Less Than 10% The Majority of Merchants Have Less Than 10% of Customers Completing Reviewsof Customers Completing Reviews
% customers who have completed a review
42%
37%
0%
11% 11% 11%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0-5% 6-10% 11-14% 15-20% >20% Don't know
% customers
% M
erc
ha
nts
• Key participation influencers:Nature/timing of follow-up emails to garner reviews; respective incentives
• “Community” nature of the audience result in significantly greater participation: Mountain Gear (50% of customers emailed have posted reviews); REI (3000 reviews in 3 weeks)
• Cross-channel participation from store shipments: Drove more participation at Famous Footwear than any other marketing effort
• Focus on overall number of reviews: More important to merchants than rather than % of customers
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% of Reviews By Product is in the 0-10% Range% of Reviews By Product is in the 0-10% RangeThough Outreach Efforts and a Strong Community Contribute to Higher Penetration
• Merchants with high turns believe 10% penetration of reviews is strong
• Split personality impacts “the long tail” where best sellers are populated and poor sellers have no reviews based on email review generating strategy
• Merchant longevity and product turn – also factors in maintenance of high % penetration of products (i.e. luggage and backpacks at eBags)
% of products that have reviews
16%
26%
11%
5%
16%
11%
16%
0-5% 6-10% 11-15% 16-20% 21-39% 40-60% 61%+
% of Products
%
Mer
chan
ts
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The Product Page is the Review Hub The Product Page is the Review Hub
REI: Product Page – reviews prominent within tabbed selling structure
79% of merchants rated the product page as where reviews performed most successfully within their sites
Tactics for integrating reviews:
• Educate the shopper that reviews are part of the site experience
• Draw further attention to feature product
• Peruse our top-rated products
• Liquidate deep inventory
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Email: Execution Starts with Post-order FeedbackEmail: Execution Starts with Post-order Feedback
Blue Nile
Email sent: 9/12/07
Subject line:We Value Your Feedback
Note: Unfortunately, not all companies are in a position to send email post transactions putting a damper on their ability to populate reviews
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Email Outreach Is EffectiveEmail Outreach Is EffectiveJust under 1/3 of these merchants tested reviews within email
with most reporting “very successful” results
Mountain Gear: 2.5-3% incremental revenue increase from those who were emailed to complete a review and subsequently placed an additional order.
Golfsmith: 42% more sales via promotional emails with reviews vs. the control group
Petco: Emails sent with highly reviewed products vs. standard reviews saw a 5-15% bump over standard
• Email will likely be an important growth area based on such strong early results and its inexpensive cost to deploy.
• Its role includes introducing top rate products while simultaneously populating onsite reviews as the following examples illustrate.
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Email: Top Rated Gift IdeasEmail: Top Rated Gift Ideas
Net Shops
Email sent: 10/10/07
Subject line:Save up to 30% on our top rated holiday gifts
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Email: Contest with Gift Card IncentiveEmail: Contest with Gift Card Incentive
Orvis
Email sent: 10/4/07
Subject line:Win $100 by ReviewingOrvis Gear
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Reviews Impact Customer SatisfactionReviews Impact Customer Satisfactionand Site Engagementand Site Engagement
Sales are somewhat impacted with AOV seeing a lesser boost
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Reviewed Products See Exponential GrowthReviewed Products See Exponential GrowthA “performance” mentality exists with comparables to non-reviewed product
topping the list of merchant measurement techniques
• Increase in sales and conversion along with a reduced return rate are also key merchant indicators
• Interest in understanding how positive reviews perform versus negative; also how existing top sellers are performing with populated reviews also cited
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Often Difficult to Determine the Impact of ReviewsOften Difficult to Determine the Impact of Reviewson Sales and Conversionon Sales and Conversion
‘Don’t Know’ Dominates Overall Conversion Increase
“Don't have metrics; can't measure when multiple features are involved.” Beach Audio
“Natural search elements are key; people write the word tent and that mention is critical.” REI
“30% in sales per visitor on reviewed products; luggage 84% increase.” Orvis
What is the OVERALL increase in conversion rate that you have seen
as a result of adding reviews to your site?
11% 21%5%
63%
20%+ 11-20% 1-10% Don't know
% conversion increase
% m
erc
ha
nts
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Reduced Returns and Cross-channel Impact Reduced Returns and Cross-channel Impact Unexpected consequences of onsite review
Petco: Products typically saw a 1% return rate but with reviews return rates dropped to .83% on higher ticket items and for products that have 50 reviews, returns decreased by 4%
Golfsmith: Return reduction from 5.2% to 2.7% since reviews were implemented
REI: Measuring the print-button in anticipation of consumers armed with copies of product reviews secured online for use during store visits
• With analytics getting more sophisticated, there will be increased scrutiny relative to the performance of all metrics, even those that are free, given the finite nature of onsite real estate and outbound email efforts
• We would expect that merchants will continually refine their presentations to achieve best-in-class execution
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Future InitiativesFuture Initiatives More in-depth integration, cross-channel initiatives, search optimization and evolving
email solicitations will follow product page placement and email outreach
REI - Integration of search results at the category page level
Paragon Sports - Integrate product thumbnails with reviews on landing pages
Golfsmith - Sort ratings and reviews by handicap
The Knot - Integrate top choices within editorial content highlighting products using language such as ‘more brides satisfied with this product vs. any other.’
Famous Footwear - Use reviews to reach out to store-base via in-store signage and identification of top rated products
eBags - Profile by customer segment as a precursor or enhancement to the interest in social networking Zappos - Leverage analytics to optimize the numbers and elevate existing merchandising
• Reviews in printed catalogues– Brookstone
– Wine Enthusiasts
• In Store Applications– Kiosks
– Review Summary Shelf Cards
• Emails– Top Rated
– Inclusion of Star Ratings
• On Site Merchandising Zones– Top Rated Items
– Featured Products with Ratings
– Dynamic Landing Pages; “Most Comfortable, Lightweight Shoes for Travel”
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PowerReviews’ Merchants’ Next StepsPowerReviews’ Merchants’ Next Steps
Buzzillions.com Social Buzzillions.com Social Shopping PortalShopping Portal
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PowerReviewsPowerReviews the e-tailing groupthe e-tailing group665 Third Street, Suite 117 1444 West Altgeld StreetSan Francisco, CA 94017 Chicago, IL 60614p. 866 345-1461 p. 773-975-7280f. 650-697-1962 f. 773-871-3528 www.powerreviews.com www.e-tailing.com
Jay Shaffer Lauren [email protected] [email protected]
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