The Power of Online Reviews to Affect Customer Behavior, 2017

Digital Marketing Researches & Reports

How Online Reviews Influence Sales Globally, Jun. 2017 | Spiegel Research Center

Consumer Behavior | Global

Online reviews have transformed the way consumers make purchasing decisions. They are more than just a way to gather information for shoppers, but they have the power to dramatically influence the purchasing decisions. But the degree of these reviews influence depends on a number of factors, such as star ratings, the nature & number of the review content, the presence of negative reviews and the price of the item.

These recommendations are provided for retailers to know how online reviews can be used to increase customer value:

  • Displaying reviews can increase sales by 270% on average, greater than the purchase likelihood of a product with no reviews.
  • Purchase likelihood typically peaks at ratings in the 4.0-4.7 range and then begins to decrease as ratings approach 5.0. but differently, products with an average star rating in the 4.7-5.0 range are less likely to be purchased than those in the 4.2-4.7 range.
  • When reviews were displayed for a lower-priced product in the gift retailer, the conversion rate increased by 190%. However, for a higher-priced product, the conversion rate increased by 380%.
  • Consumers spend 4× as long on a site when they interact with negative reviews, with a 67% increase in conversion rate.
  •  All of the increase in purchase likelihood occurs within the first 10 reviews and the first 5 reviews drive the bulk of this increase.
  • The first 5 reviews for a product have the biggest conversion impact; focus on collecting a baseline number of reviews, especially for higher-priced products.
  • Up to 80% of reviews originate from follow-up emails urging shoppers to review their purchases.
  • Purchase likelihood increases by 15% when consumers are exposed to reviews written by a verified buyer vs. an anonymous review.
  • The average star rating for reviews from verified buyers is 4.34, compared to an average star rating of 3.89 for reviews written by anonymous reviewers.
How Online Reviews Influence Sales, Jun 2017 | Spiegel Research Center

How Online Reviews Influence Sales, Jun 2017 Based on Spiegel Research Center

Methodology:

Data were driven from 57,000 reviews from consumers and 65,000 reviews from verified buyers for about 13,500 unique products in a number of categories; including health and beauty, electronics, home and garden equipment, over the course of one year, tracking the number of page views and sales as each product accumulated reviews.

Besides 2 online retailers for lower-priced consumer products; 22 product categories were covered with a total of 111,460 SKUs. Adding to an approximately 15.5 million page views of high-end gift retailers for 1,800 unique products from 7.8 million users.

Spiegel Research Center

Founded in 2011, the Medill IMC Spiegel Digital & Database Research Center is the first research center at the Medill School of Journalism, Media and Integrated Marketing Communications. The center is part of Northwestern’s long tradition of applied research about advertising and marketing.The main focus of the Spiegel Research Center is to do an evidence-based, data-driven analysis to prove the relationship between customer engagement and purchase behavior. The Spiegel Research Center’s research focuses on consumer behavior in social media and on mobile devices.
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