The State Of Online Reviews Among U.S. Shoppers

The State Of Online Reviews Among U.S. Shoppers A White Paper by ReviewMonitoring.com

Executive Summary Reading online reviews has become an integral part of the US shopper’s path-to-purchase. More than three in four US shoppers go online to read reviews. Online reviews are the second most trusted source of information behind friends and family and actually rank ahead of peer recommendation in terms of being helpful in the shopping process. 73% of shoppers rank online reviews are the most influential piece of content ahead of videos, photos and blogs that lead to conversion.

US shoppers are most likely to read reviews when purchasing electronic consumer devices. 68% of shoppers seek online reviews when looking to buy smartphones, tablets and video game consoles among other gadgets. It is also common to read reviews during purchase of long-term durables such as household appliances and automobiles. US shoppers overwhelmingly prefer to visit Amazon to read reviews with seven in ten shoppers visiting the online retailer website to read reviews. Amazon’s popularity is driven by the trust shoppers place on the retailer website’s content with more than a third of US shoppers saying they trust Amazon ahead of other retailer, brand, or review aggregator sites.

US shoppers aren’t simply looking for positive reviews to help them buy. 77% of shoppers read both positive and negative reviews to get a balanced opinion of products and brands. In fact, more than four in five shoppers actively look for negative reviews online. Shoppers who go around reading negative reviews are also 85% more likely to convert than shoppers who don’t. Increasingly, shoppers suspect censorship or fake reviews when they see a noticeable lack of negative reviews. Having negative reviews can increase trust in the brand and/or retailer.

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Executive Summary The two key parts of an online review that influence shopper choices are ratings and review content. Almost all shoppers reading reviews pay attention to the rating score before deciding to dive deeper and read the text in reviews. Brands and retailers can monitor the status of their product reviews in the following three steps:

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Identify the sites where shoppers go to read online reviews

2

Track the rating score using an online NPS metric

3

Identify the drivers of positive and negative trends in NPS using word trees

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Table of Contents 1.

Why should brands care about online review? Online Reviews - most trusted digital media Online Reviews - most helpful when making a purchase decision Online Reviews - most influential digital content

2.

Who is an online review reader? Affluent households and families are most likely to read online reviews

3.

For which product categories do shoppers read online reviews? Consumer electronic buyers read online reviews during product research

4.

Where do shoppers read online reviews? Shoppers prefer to read reviews on Amazon

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Table of Contents 5.

When do shoppers read online reviews? Online reviews - key shopping tool during pre-purchase research Opportunity to use credible online reviews in brand websites and other marketing channels

6.

Why do shoppers read online reviews? Online reviews help shoppers gain emotional and functional confirmation before purchase decision Price sensitivity drives shoppers to read online reviews Build shopper trust in online reviews using authentic and transparent reviews

7.

How do shoppers read reviews to make a purchase decision? Shoppers read multiple reviews with opposing viewpoints while on-the-go Shoppers pay attention to overall rating score and review content

8.

How to analyze online reviews? Comparing Sony PlayStation 4 vs Xbox One 3 steps to driving meaningful insights from online reviews

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Care About Online Reviews?

Shoppers trust earned over owned media Friends and family

81%

Online reviews rank above experts, bloggers, and advertising

76% 76%

Online reviews

Third party experts

70%

Company website

67%

Articles and news

63%

Videos

63%

Online bloggers

55%

Marketing materials

55%

Social media

Shopper trust of marketing sources in general % somewhat trust to extremely trust

49%

Advertising

47% 0%

23%

45%

68%

90%

Top 3 most trusted marketing channels are earned media - friends/family, online reviews, and independent experts More than 4 in 5 (81%) shoppers trust word of mouth from friends and family More than three-quarter of shoppers (76%) trust online reviews from other customers www.reviewmonitoring.com

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Online Reviews - most trusted digital media Earned media channels like recommendations from friends and family and online reviews from other shoppers lead the pack of most trusted marketing sources among US shoppers. Paid media sources like advertising and marketing materials languish at the bottom of the heap.

More than four in five (81%) shoppers trust for of mouth from people they trust - friends and family. Peer recommendation has long been the most trusted source of product or brand information among shoppers. It continues to stay influential even in a digital age when people can easily search for information on-the-go. The digital marketing source that comes close to imitating peer recommendation is online product reviews, not social media. Just over a three in four (76%) of shoppers trust online reviews from posted by previous customers compared to less than half (49%) who trust social media. A greater trust in online reviews stems from in-depth nature of the content posted by customers who share their purchase and usage experience. Social media sites like Facebook, Twitter, and Instagram, on the other hand, are largely used to declare ownership with a view to gain social approval for the purchase decision. Online review sections on retailer websites like Amazon and Best Buy also have a well established structure that allow shoppers to sort reviews by date, ratings, and relevance among others - a sense of control lacking in social media. The reviews, which sit at the bottom of the product page, act like a pop-up community connecting past and future buyers of a product. Reviews from other shoppers is also more authentic than opinion from experts. Shoppers trust online reviews more than the opinion of third party experts (70%) and amateur bloggers (55%) - who may or may not have been paid for the review. Shoppers also trust online reviews more than paid media outlets such as advertising (47%), and marketing materials like direct mail (55%). There is, however, opportunity for brands to boost trust in information on company website (67%) by 7 incorporating product reviews in their own websites instead of relying on online retailers.

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Online reviews are the most helpful source of influence towards making a purchase decision 72% 72%

Online reviews

Friends and family

Online reviews as helpful as friends and family during purchase decision

72%

Company website

68%

Marketing materials

62%

Articles and news

62%

Third party experts

61%

Videos

57%

Online bloggers

55%

Advertising

54%

Social media

Shopper perception of marketing sources when making a purchase decision

50%

Infographics

% who find given source somewhat to extremely helpful

45% 0%

20%

40%

60%

80%

More than 7 in 10 (72%) shoppers find online reviews helpful when making a purchase decision Company websites (68%) and marketing materials (62%) are the most helpful owned media sources Just over half find advertising (54%) and bloggers (55%) as helpful during the purchase process www.reviewmonitoring.com

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Online Reviews - Most helpful when making a purchase decision Shoppers not only trust online reviews but also find them very useful in the path to purchase as it provides valuable information that helps them make an informed purchase decision. More than 7 in 10 (72%) shoppers find online reviews helpful when making a purchase - the same figure as shoppers who say they find recommendation from friends and family helpful. In comparison only half of all shoppers find social media useful while making a purchase decision.

Greater accessibility of online reviews makes it more useful to shoppers who are considering a purchase. People can easily look up reviews on their mobile devices while on-the-go compared to depending on availability and knowledge of trusted peers. Compared to a small network of peers, online reviews provide more first hand information. Shoppers can read through a spectrum of positive to negative reviews online giving them a broad sense of the product usage experience. While positive reviews can confirm that the product will meet their expectation, negative reviews can caution them against potential pitfalls, help them find a fix, or direct them towards a better alternative. Brands can leverage online reviews by incorporating them into their own website. More than three in five (68%) shoppers already find company websites helpful in making a final purchase decision. Company websites that are largely limited to providing product and store information can improve customer experience by adding reviews to the mix. Reviews can also be incorporated into marketing materials sent to potential buyers. These marketing materials include direct mail, coupons, and email newsletters among others. Already 62% of shoppers find marketing materials useful in their purchase decision process. Reviews from other customers like them can help influence their purchase decision.

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Reviews are the most influential online content on a retailer’s website Online reviews are most influentials content on a retailer website

73% 73%

Product reviews Q&A

48%

Product and brand videos

47%

Photos of consumers using product

42%

Communities/forums

31%

“Trending Now” products

30%

Retailer’s blog

Shopper influence on purchase decision by website content

28%

Podcasts

% who find content influential when visiting a retailer website

22% 0%

20%

40%

60%

80%

Nearly three in four (73%) shoppers are influenced by product reviews posted online ahead of all other online content Just under half of shoppers are influenced by online Q&A (48%) and videos about the product (47%) Images of other customers using the product influences more than two in five (42%) shoppers www.reviewmonitoring.com

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Online Reviews - most influential digital content The importance of reviews is highlighted in the fact that they are the most effective online content that push a shopper into making a purchase decision. A high degree of trust in online reviews followed by it’s useful role in the purchase decision drives how effective reviews are in converting shoppers. Nearly three in four (73%) shoppers are influenced by product reviews posted online ahead of all other online content. In comparison 22% found podcasts to be influential and 28% found content on retailer blogs as influential. Even the seemingly ubiquitous and popular feature - ‘Trending now’ section - influenced decision among 3 in 10 shoppers. Most telling is the lack of influence from communities and forums (31%) which have long been the home of online discussions. It reflects a shift in US shoppers’ online behavior where they are using discussions for everyday conversations while turning to online reviews to make a purchase decision. Communities and forums also play a bigger role in customer service and churn reduction than in influencing customers and driving acquisition. Just under half of shoppers are influenced by online Q&A (48%). Q&A allow potential buyers to clear any doubt they have before making a purchase. It is a natural next step for shoppers to engage in Q&A after reading through the reviews. Over time, we can expect the role of Q&A to grow and become as influential as online reviews. Visual content also plays a key role in influencing purchase decision. Videos about the product (47%) and images of other customers using the product(42%) influenced shoppers to make a purchase decision. The growing influence of visual content is a reflection of the online culture we live in today where most popular content type are videos, infographics and even the way we communicate is evolving from text based to emoji messaging. In the future we can expect product reviews that incorporate emoji, photos and videos.

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Who Is An Online Review Reader?

Reading online reviews is common among shoppers across all gender and age groups Shoppers who read reviews - demographic breakdown % who read online reviews by gender, age, income and household make

74%

Under $40K

22%

Male

78%

$40K to $80K

Female

78%

$80K+

0%

78%

79% 80%

35-54

75%

55+

Read Reviews Do not Read Reviews

0%

89% 0%

20% 40% 60% 80%

18-34

81%

30%

Have children under
the age of 18

90%

81%

Do no have children under 18

20% 40% 60% 80%

60%

76% 0%

30%

60%

90%

More than three quarters (78%) of shoppers read online reviews Affluent households ($80K+) are more likely to read online reviews (89%) than emerging households (