Customer reviews help cut product return rate at Petco
Petco Animal Supplies Inc. has significantly cut return rates on products reviewed on its site by customers, the company reports. Products reviewed by customers on the site have a return rate that is 20% lower, on average, than for products without reviews. And the return rate continues to decline as a product gains more reviews, with return rates on products having 50 or more reviews 65% lower, on average, than for products with no reviews, Petco reports. Petco implemented the Ratings & Reviews application from vendor Bazaarvoice in October 2005.
“Ratings & Reviews is one of the online tools that most influence purchase decisions,” says John Lazarchic, Petco vice president of e-commerce. “This new data is another sign that Ratings & Reviews provides customers with the information they need to make the right purchasing decision.”
Petco indicates that cost savings attributable to the reduced return rate have been “considerable,” though it did not disclose numbers. “Retailers typically lack visibility into return rates, especially for low-priced products,” says Brett Hurt, CEO of Bazaarvoice. “Reviews give online businesses a digital archive of the customer voice that they can take back to product marketing and manufacturing to develop better products down the line.”
An August 2005 Internet Retailer survey found that 9% of merchants polled had a return rate of between 6% and 10%. Nearly 30% reported a return rate of between 3% and 5%. The merchants also indicated they spent $6 to $10 to process a returned product.
In other results it attributes to the use of Ratings & Reviews, Petco has previously reported increasing e-mail click-though rates by a factor of five when relevant Ratings & Reviews content was included in the campaign. Additionally, Petco has reported that top-rated products featuring four- and five-star ratings delivered 49% higher conversion than other items; and that site searchers who sort by product ratings spend 41% more than searchers using other sorting methods.
Petco is No. 183 in the Internet Retailer Top 500 Guide to Retail Web Sites.
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