Customer Reviews Increase Web Sales

Customer Reviews Increase Web Sales

AUGUST 7, 2007

Giving consumers a voice can pay off.

Customer product reviews are increasing retail e-commerce conversion rates, site traffic and average order values, according to e-consultancy and Bazaarvoice‘s "Social Commerce Report 2007" report.

Asked about the effects of customer ratings on their Web sites,
over half of online retailers in the United Kingdom, the United States
and Europe said their overall conversion rates had gone up in the past
year, compared with only 9% who said they fell. Over three-quarters
said their site traffic had increased. Only 5% said it had fallen.
Average order values rose for 42% of the responding online retailers,
and only 6% said they had decreased.



E-consultancy and Bazaarvoice found that 28% of online sellers were
using customer ratings and reviews. More than half said they were
considering it.

More than half of all online sellers considered user-generated
content either extremely important or very important to company
strategy over the next year.

Nearly eight in 10 online sellers thought a major benefit of
such reviews was to increase conversions, while 73% thought improved
customer retention and loyalty were major benefits. Nearly six in 10
thought the fact that customer reviews improved search engine
optimization was a major benefit (multiple answers were permitted).


Nearly all survey respondents thought ratings and reviews were either extremely helpful or very helpful "as consumers."

"Tapping into social commerce can be a great way of gaining a
competitive advantage, for example through ratings and reviews," Linus
Gregoriadis, E-consultancy’s head of research, said in a statement.
"But apart from the early adopters, this is something a large
proportion of online retailers are only just starting to think
seriously about."

Mr. Gregoriadis said one-third of online sellers were
concerned about negative reviews — a major barrier to adoption of
ratings and reviews — "but retailers are finding that they can improve
conversion rates, drive sales and increase customer satisfaction even
if customers aren’t necessarily singing their praises all the time."

Online shoppers use customer reviews particularly for complicated products, according to the American Marketing Association‘s "Mplanet" survey. The association ranked online resources used for product information during last year’s holiday season.

Online consumer reviews mattered most in complex and high-ticket
categories such as automotive (19%) and consumer electronics (17%).

Consumers first turned to search engines (43%) and direct
visits to company sites (29%) for product information, regardless of
product category.


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