Generating new sales-spiking buzz

When Pete Skete posted a photo on Evogear.com of himself wakeboarding in Florida’s Tampa Bay, he created the kind of splash that’s helping to put retailers like Evogear on solid ground with a growing base of customers. Customer-generated product reviews—good or bad, text-only or, more and more, photos and even videos—are creating a new level of buzz resonating among retailers and consumers. “It’s a way for consumers to get more attached to our brand, when their own personality and image is on our web site,” says Bryce Phillips, founder of Evogear.com, where customer-generated product reviews are a key part of the retailer’s growth to about $6 million in sales in its current fiscal year.

Skete’s photo, which shows him skipping over a boat’s wake while maneuvering the Hyperlite Murray wakeboard he purchased on Evogear, is one of about 200 photos included among the customer-generated product reviews that have been posted on Evogear since it launched its PowerReviews customer reviews feature in the fall. The combination of the image and the text of Skete’s message makes the review not only a lively endorsement of Hyperlite Murray but also more likely to be viewed by Evogear visitors and e-mailed by Skete to his friends, Phillips says, noting that some photo-posting customers have said they’ve e-mailed their reviews to hundreds of friends.

“This board is freaking sweet,” Skete writes. “Never had a complaint. Launches off the wake amazingly and lands smoothly. I would recommend to anyone, beginner or expert.”

What retailer or manufacturer could resist that kind of endorsement—particularly with industry research showing visitor-to-sales conversion rates sharply higher among shoppers who read reviews?

Not manufacturer and retailer Hewlett-Packard Co., which received thousands of customer-generated reviews posted on HPShopping.com within the first week that it deployed a customer reviews application from Bazaarvoice Inc. in November, says Sam Taylor, senior vice president of HP Direct, the company’s online and catalog division.

HP’s customer reviews, so far limited to the dozens of products in the company’s line of printers, already are proving to be a powerful way to connect with customers, Taylor says. “We’ve seen that when consumers are considering a major purchase, they value unbiased and unedited consumer reviews,” he says.

Although HP is not ready to provide figures showing how well reviews are helping convert shoppers into buyers, some retailers are showing double-digit percentage increases in conversion rates. “On products with a broad set of reviews, we’re averaging conversion rates that are 20% higher than products without reviews,” says Jacob Hawkins, senior vice president of online marketing for Bazaarvoice client Overstock.com Inc. And CompUSA Inc., another Bazaarvoice user, has reported a 50% spike in conversion rates from shoppers who landed on review pages from major Internet search engines.

At CompactAppliance.com, which specializes in selling small appliances for tight living and office spaces, reviews posted through the PowerReviews application are helping boost conversion rates but also consumer confidence for products that are outside the mainstream for many shoppers, says senior vice president Jason Roussos.

Further, customer-generated reviews present powerful new opportunities in marketing and product development, industry experts say.

“This is one of the most exciting things that we’ve had come down the pike in a long time,” says David Seifert, director of operations and direct marketing at Bass Pro Shops, where reviews are driving conversion rates up 20% to 30%. “Customers really have an affinity for this, because they would rather believe other customers than the retailer any day of the week. There are very few things like this that we can implement this easily and quickly, get this kind of response from customers, and make this kind of money off of it.”

The power of persuasion
Customer-generated reviews, however, pose challenges for retailers, the first of which is persuading shoppers to write them—and with usable content. Although HP reports a fast response from review contributors, many retailers resort to incentives. To kick-start their programs Bass Pro Shops enticed contributors with chances to win e-mailed gift certificates in values of $100 and $200, a tactic that has helped the retailer amass some 14,000 reviews so far, Seifert says.

Reviews also have been the source of internal battles among retail staffs, eliciting objections from merchandise managers and others who fear the impact of any negative reviews. “Retailers are used to being in control of the marketing message, but the minute you start putting up honest customer comments, you’re fundamentally giving up control of the process,” says Bill Bass, a former Sears and Lands’ End executive who is founder and CEO of Fair Indigo, a start-up apparel retailer.

And another factor to factor into the mix: While 77% of online consumers consult user-generated reviews, only 48% consider them useful, according to a recent JupiterResearch study.

Still, the advantages of consumer reviews appear to be more than compensating for the challenges, according to several research reports and interviews with numerous retailers. eVOC Insights LLC reports in a study released last year that 63% of online shoppers are more likely to purchase from a retail site with consumer-generated reviews, and 54% consider customer reviews among the most important features of retail sites. And retail consultants J.C. Williams Group found in a survey that 60% of online shoppers considered user-generated reviews to be “very or extremely helpful.”

To put negative reviews into perspective, JupiterResearch discovered that 9% of shoppers said they had written an online review of a product they liked but only 4% posted a review about a product they didn’t like. And even negative reviews can provide shoppers with needed context, some experts say. “I never heard a good argument on why letting customers see other customers’ reviews is anything but good for the shopper,” says Bass, who adds that the impact of reviews on customer activity on FairIndigo.com has won over support among his apparel designers.

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.

Turnkey systems
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.

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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.

Consolidation
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.

PowerReviews also differentiates its service by offering a proprietary review-tagging system that lets shoppers see the overall percentage of reviewers who cited products for particular attributes, such as that a digital camera had a poor liquid-crystal display feature or that a down comforter was warm and pretty, says Chen, a former manager of Yahoo Shopping who also has served as vice president of product development at web site developer and operator GSI Commerce Inc.

Although Bazaarvoice’s system isn’t set up to mine the text of reviews, at least not yet, it tags reviews to produce reports that let a retailer see how a product has scored for the particular attributes each reviewer is asked to rate, says Bazaarvoice’s Hurt, the founder and former CEO of web analytics company Coremetrics Inc. For pet toys, for instance, reviewers are asked to rate them from one to five paws for overall value, pet satisfaction, appearance and quality. “A retailer like Petco then can see all toys that received a five-out-of-five rating for pet satisfaction,” he says, adding that customer Petco.com has integrated this feature into its site search-and-navigation function from Endeca Technologies Inc. to let shoppers find similar information.

Bazaarvoice’s review staff also manually tags reviews for particular content, such as comments on particular attributes, and adds that data to its analytics program for producing reports on review content.

Among Bazaarvoice’s other offerings, Hurt highlights three in particular designed to capitalize on the popularity of user-generated reviews through multiple shopping and marketing channels: SearchVoice provides Bazaarvoice-hosted landing pages with review content organized in a way that helps increase rankings in Internet searches for reviews of particular products (PowerReviews offers a search engine optimization microsite service that also optimizes search landing pages). Bazaarvoice’s SyndicateVoice lets retailers distribute their review content to third-party shopping sites. And its FeedVoice provides a hosted service for distributing review content through RSS feeds.

Third-party integration
Differences aside, both PowerReviews and Bazaarvoice employ the strategy of using web-based integration technology to not only provide a laundry list of features and services but also to integrate with third-party partners for mixing review content with features such as site search and e-mail marketing.

Evogear’s Decker, for example, is looking forward to turning on a new feature from PowerReviews that provides a link between Evogear’s review content and a customer’s personal blog, providing more opportunities to increase search engine rankings while tying in to the increasingly important realm of social networking in e-commerce. The more that a retailer’s review content is linked to blogs and in social network-distributed e-mail, the more it can raise Internet search rankings as well as promote the retailer itself and its featured products.

Indeed, being able to weave consumer reviews into social networking and viral marketing efforts is one of the biggest potential benefits of reviews, many experts say. “What we’re excited about is that this captures the whole area of social networking,” HP’s Taylor says, adding that an E-mail A Friend feature could become a part of HP’s consumer reviews.

Which could be a good investment because some retailers combining e-mail and customer reviews already are realizing strong returns from e-mail marketing campaigns that send reviews directly to consumers.

Bass Pro Shops, which launched consumer reviews through Bazaarvoice early in 2006, ran a pre-Thanksgiving e-mail marketing campaign via CheetahMail featuring “top-rated gifts” according to its user-generated reviews. The e-mail campaign, providing links back to landing pages containing reviews along with product details, doubled the performance of other, simultaneous e-mail campaigns in the ability to bring customers to BassPro.com, Seifert says. Bass Pro Shops plans to run similar campaigns throughout the year, he adds.

The merchant also has realized a 59% increase in visitor-to-sales conversion rates among shoppers who visited its Top-Rated Products page, where shoppers spend 16% more per order than the average ticket, he adds.

Perfecting products
Retailers also are using information on product performance gathered in reviews to work with product designers and manufacturers to help improve products. “Reviews sound a nice alarm when a product slips through the quality control process,” says Overstock’s Hawkins. “Manufacturers love this information.”

Fair Indigo used information in customer reviews to modify a zippered silk blouse after seeing a complaint that the zipper didn’t fit right, CEO Bass says. It made the modification after receiving reviews that some sizing was off and determined changing the sizing would also fix the zipper.

Reviews also can call attention to problems with inexpensive products that customers might not bother to return. Bass Pro learned through reviews that a popular and inexpensive plastic holder used for securing a fishing rod to a boat often was breaking. “The problem with inexpensive items is that people don’t necessarily return them, so you don’t know people are having trouble with them and thus you don’t know why they’re not coming back to shop,” Seifert says.

Bass Pro has since worked with the manufacturer to strengthen the holder. “It’s now getting five-out-of-five ratings,” he says.

On a similar front, consumer reviews can serve as an effective tool for testing new products, says Don Zeidler, director of marketing at online plant seeds and gardening supplies retailer W. Atlee Burpee Co. “If we want to try some product that we think will be a hit, we put it online. If it gets rave reviews, it affirms what we’re doing,” he says.

And in yet another area, customer reviews are helping to integrate multiple channels. Fair Indigo, which specializes in selling “fair-trade” apparel under a system designed to assure fair prices and working conditions at the source factories, is letting visitors to its single store near Madison, Wis., scan a product label at a computer kiosk to call up a page on FairIndigo.com with customer reviews and other product details. The kiosk helps in-store as well online shoppers better understand the value of fair-trade goods, Bass says.

While customer reviews can serve several specific needs, perhaps their biggest value lies in the positive impact they can have on all marketing and merchandising efforts, says Decker of Evogear. “Reviews are a way to add value for customers,” he says. “But in the process of helping customers make purchasing decisions, the reviews can help marketing campaigns.”

The future for customer reviews may hold a melding into other, larger applications, says Garf of AMR. “Looking 24 months out, I wouldn’t be surprised to see these capabilities built into e-commerce or web analytics platforms,” he says. “Reviews are complementing the e-commerce capabilities of a web site with their content and community functionality.”

paul@verticalwebmedia.com