The e-retailer heads into the holiday shopping season behind a 30% increase in fulfillment spending and a widening net loss. North American sales increased ...
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Positive or negative, retailers of all types and sizes are using customer reviews content not only to add popular content to their product pages but also to spark traditional as well as viral marketing, drive natural search rankings, build customer loyalty, test the popularity of new products, and improve products shown in reviews to have faults. “User-generated content and insights can serve as a powerful demand signal,” says Rob Garf, retail industry research director at AMR Research Inc.
Some large e-retailers, like Amazon.com, have built their own customer reviews systems in house, but that takes a lot of expertise, time and resources, industry experts say. However, the use of customer-generated reviews on retail web sites has come a very long way in just the past year as first Bazaarvoice and then PowerReviews Inc.-the only two highly visible players to date-entered the market with turnkey systems.
These systems make it relatively simple for consumers to enter their own reviews of products, while also providing retailers with the software and outsourced labor needed to monitor, analyze and leverage review content. The companies employ staff who manually go through all reviews to ensure content is appropriate and include features in their systems that help guarantee a person writing a review is legitimate, features that automatically send review-prompting e-mails to customers upon a purchase or enable retailers to designate reviewers based on purchases or other qualifications.
The concept of consumer-generated reviews itself is not new. Several retailers, including Overstock.com, Zappos.com Inc. and Amazon.com Inc., have built their own systems. And Buy.com Inc. is working with Grouper Networks Inc. to let Buy.com customers post their own video reviews.
However, while the basic technology behind consumer reviews is relatively simple compared with other e-commerce site features, it can require a lot of manual labor to monitor review content. “It’s not a technology that you just put on your web site and let it run itself,” says Garf.
In addition, reviews can be particularly difficult to manage for retailers selling a large number of product categories, says Hawkins of Overstock, which switched to the Bazaarvoice system about a year ago. “We sell a wide variety of products and we wanted more pertinent reviews,” he says. “We needed to ask different questions for digital cameras-Is the optical zoom as good as you thought?-than for bed sheets-Is the 1,000-count sheet as smooth as expected?”
Moreover, he says, using a third party to manage the reviews has provided an unbiased gatekeeper of review content. All content is read by Bazaarvoice staff before being posted to a site to prevent the appearance of content that breaks a retailer’s rules-no vulgar language or mention of competing retailers, for instance. In-house review can result in being overly protective, Hawkins says.
“Our own in-house review staff was managed by the merchandising department, but there’s an inherent conflict of interest when the gatekeepers of reviews are the same merchandise buyers who purchased the products,” he adds. “So our positive reviews were posted, but the negative ones were not.”
And as it turns out, negative reviews present retailers with an opportunity to win points with consumers, many experts say. “It can be a positive experience for a retailer when it gets a negative review and then makes it public that it addressed the problem,” Garf says.
More to come
Also adding to the attraction of both PowerReviews and Bazaarvoice is the expanding range of capabilities they’re offering online retailers to manage and analyze content and incorporate review content into broader marketing and merchandising strategies. While the posting of photographs with reviews is one of the latest features offered by the companies, each promises more to come.
Andy Chen, co-founder and CEO of PowerReviews, said in an interview last month that he expected to launch a video-posting feature before the turn of 2007, for example, while his counterpart at Bazaarvoice, founder and CEO Brett Hurt, says the pace of product evolution is non-stop. “We’re evolving our product every six weeks,” he says.
Bazaarvoice, a hosted service branded solely by the retailer, charges a monthly fee that starts at $2,000 and scales up based on traffic volume and the number of reviews. The company has more than 30 clients, including Sears, Macy’s, Petco and Golfsmith.
The customer-reviews software from PowerReviews, which sits on a retailer’s own web servers, is offered for free along with review management services to those retailers who agree to share their reviews content on PowerReviews.com, which PowerReviews is developing as a review-centered shopping comparison site.
PowerReviews.com is expected to launch early this year, when it will begin charging retailers a pay-per-click fee for visitors that link to their site from PowerReviews.com. Its base of about 35 clients includes SmartBargains.com, Eastern Mountain Sports and Ritz Interactive. PowerReviews also offers a paid-subscription model, under which a retailer pays about $1,000 per month plus 15 cents per review, though no merchant has yet selected this option.
It takes about 15 to 20 hours to set up the PowerReviews application over a two-week period, Chen says. Bazaarvoice takes “less than 20 hours” within a 2- to 3-week period, according to Hurt. Several retailers, including the aforementioned Overstock.com and Evogear.com, have confirmed the ease of deployment and the reliability of the software and services from both companies.
“The system was super-easy to hook up to our web site; it took about two weeks with no downtime,” says Nathan Decker, director of e-commerce at Evogear.com. And adding new features such as reviews photos, he says, “takes about 20 minutes. It’s almost as simple as toggling a switch on.”
PowerReviews, which places a small “Powered by PowerReviews” note at the top of each product’s list of reviews, uses an asymmetrical application service provider, or ASP, system based on AJAX web page development technology. This enables all reviews for each product to appear in full content on the retailer’s product detail page, Chen says, allowing the shopper to simply scroll down the page to see all reviews instead of having to click to multiple pages of reviews, as is the case under the Bazaarvoice model.