Target and Toys R Us posted overall sales declines during the holidays.
Vendors put new spins on reviews and personalization
It used to be easy to define the way ratings and reviews worked: A shopper made a purchase, then ranked an item, say from one to five stars, and explained why she did or didn't like it. Similarly for personalization: An e-retailer took note of what a shopper had purchased and viewed on its site and then displayed similar or complementary products.
My how the technologies have changed.
Today reviews are incorporated into search engine results, and consumers can post a review to her Facebook profile with one click. And personalization has gone far beyond a retailer's e-commerce site, extending into highly personalized ads served up to consumers across the web. E-retailers have a wealth of new review and personalization technologies at their fingertips. While the ROI on the latest advancements is still a bit blurry, there's data to support their potential.
A new study from The E-tailing Group finds 64% of shoppers read reviews always or most of the time before making a purchase decision. That's not much changed from 65% in a similar survey in 2007, but what has changed is how much time shoppers spend reading reviews.
Reviews get around
The research shows 64% of shoppers take 10 minutes or more to read reviews compared to 50% in 2007, and 33% take a half hour or more compared to 18% in 2007. 39% read eight or more reviews before buying compared with 22% in 2007, and 12% read 16 or more compared with 5% in 2007.
Additionally, both Google and Bing incorporate reviews or ratings into search results these days. Plus reviews are getting more social. For example, some ratings and reviews vendors allow e-retailers to add the Facebook Like button to product pages. This means shoppers looking at products on a web site can see how many shoppers "Liked" the product on Facebook. Additionally shoppers can press the Like button themselves to show their love for an item on their Facebook profile.
Personalization is making similar advances. For example, e-retailers today are delivering personalized ads across the web. The practice, called retargeting, shows consumers who previously visited a retail site a targeted ad based on the items they viewed, products they placed in their cart, the way they navigated a web site, purchase history and other information.
Scentiments.com, a fragrance retailer that started as a bricks-and-mortar store and today offers 8,700 SKUs online, is using retargeting and has achieved a 623% return on ad spend with the practice.
"The service was turned on and orders began coming through," says Howard Wyner, president of Scentiments.com.
Firms take varying approaches to retargeting. Some identify an online retailer's best customers, then invest heavily in showing them web display ads. Others feature carousel-type ads with several products they believe a shopper may be interested in.
More companies are targeting consumers based on their online behavior. 24% of online marketers used behavioral targeting in 2009, up 50% from a year earlier, according to a Forrester Research Inc. poll. "The practice of creating dynamic ad content based on past behavior is a small but growing part of the display market," says Emily Riley, research director and principal analyst at Forrester Research Inc.
While ratings and reviews and personalization have long been staples for e-retailers, vendors are offering fresh twists on both. The technology now available offers e-retailers new options for personalizing offers and taking advantage of consumers' willingness to share their views of products.