The Series B round for Witherspoon’s Draper James brand was led by San Francisco-based Forerunner Ventures.
A Lightspeed Research survey also highlights the power of negative reviews.
Most consumers read online reviews before making purchases, but those shoppers turn more often to e-commerce and review sites, and search engines, than to online social networks such as Facebook and Twitter, suggest survey data released this week by Lightspeed Research.
The market research firm based its findings on a survey of approximately 1,500 consumers in March. 62% of respondents said they read reviews online before making purchases. “These results highlight the importance to brands and retailers of accurate, up-to-date information, competitive pricing and positive reviews,” Lightspeed says.
49% of respondents said that within the last six months they have checked the sites of competing retailers, brands and service providers before making purchases, with 49% saying they have checked price comparison sites. 19% said they have read online reviews of bricks-and-mortar stores or online shops.
But only 7% have turned to social networks for product or store reviews, Lightspeed says. “Despite their role in our digital lives, social networks don’t yet seem to be the place where word of mouth is delivering its full power,” says Naor Chazan, Lightspeed’s marketing director for the Americas . “Consumers turn most readily to search engines, Consumer Reports, shopping web sites, and review communities for their research, while social networking sites sit at the extreme opposite end of the spectrum.”
In fact, 73% of respondents said they trust reviews in the monthly magazine Consumer Reports, with 62% saying they trust other consumers’ opinions. 58% said they trust recommendations from people they personally know, such as family, friends and colleagues.
The survey also suggests that negative online reviews carry a powerful punch. 21% of respondents said two bad reviews about a product or brand can lead them to change their minds about a potential purchase, with 37% saying their threshold is three bad reviews. “Consumers are more likely to share a negative experience over a positive one, and they can be dissuaded from a purchase decision after reading just a couple of bad reviews,” Chazan says. “With high value being placed on the opinions of other people, and the speed at which consumers can obtain these reviews on the fly, brands are wise to invest in monitoring and responding to customer feedback.