November 8, 2007, 12:00 AM

Customer reviews influence cross-channel buying decisions, study says

The proliferation of online customer reviews has led to a new breed of shopper—the “Social Researcher” who puts significant emphasis on peer feedback in product reviews when making online and offline purchasing decisions, The E-Tailing Group says.

Paul Demery

Managing Editor, B2B E-commerce

The proliferation of online customer reviews has led to a new breed of shopper-the “Social Researcher” who puts significant emphasis on peer feedback in product reviews when making online and offline purchasing decisions, according to The E-Tailing Group Inc.’s “Social Shopping Study 2007.”

Of 1,200 customers responding to the survey, 65% were identified as Social Researchers-shoppers who actively seek out and read customer reviews prior to making a purchase always or most of the time, according to the study. On average, this group consulted reviews at a rate 20% higher than the average online shopper in all areas:

• 64% research products online more than half the time, whether they buy the product in the store, online or from a catalog.
• 78% of the Social Researchers indicate they spend more than 10 minutes of time in the review reading process
• 86% find customer reviews extremely or very important
• 76% find “top rated product” lists to be extremely or very important

“Social Researchers are not only teaching us a lot about the evolution of online shopping, they are driving the direction of consumer-generated content and peer feedback,” says Lauren Freedman, president of The E-Tailing Group, a Chicago-based research and consulting firm focused on online retailing. “This makes customer reviews even more relevant to the online shopper and even more essential for integration on merchants’ sites.”

The study also found that 82% of the shoppers surveyed found reading reviews better than researching a product in-store with a knowledgeable sales associate, and 93% indicated they are likely to start their shopping process on a web site that offers “social navigation.”

“I knew there was significant interest in customer reviews but I was startled at the passion, intensity of interest and the integral nature that reviews play in online and cross-channel shopping,” Freedman says. “This influence turns the table on the customer/merchant relationship and ensures that reviews are only the beginning of this new shopping dynamic.”

Social Researchers also were 76% more likely to shop on a retailer site offering social navigation-the ability to narrow product selections based on reviews from like-minded people with similar interests-than on a competing site.

In addition, study participants found it extremely or very helpful to narrow product selection based on feedback from people “just like them”-or people with like interests (64%), people with similar uses (59%) for the product such as “for travel” or “for home office;” and from those who sought out the same product attributes (56%) such as durable, lightweight or easy to use.

Shoppers also prefer to use customer reviews throughout the shopping process, according to The E-Tailing Group. 81% of consumers use customer reviews to decide between two or three products or to confirm that their final selection is the right one. However, only 40% of consumers actually start the shopping process using reviews, meaning shoppers leave retail sites during the shopping process to seek out reviews.

The study, commissioned by PowerReviews, surveyed consumers who shop online at least four times per years, spending $500 or more annually. PowerReviews provides customer reviews and social merchandising technology to multi-channel retailers.

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