eCommerce has never been a bigger player in a brand’s selling channels. People are spending, and continuing to spend, more and more online. Every year, Cyber Monday beats out the previous one. Mobile and tablet revenues continue to increase. And brick-and-mortar retailers scramble to keep pace with a digitally driven world.
In May, comScore announced that U.S. retail e-commerce in Q1 2013 surpassed $50 billion in spending for just the second quarter on record. The figure represents a 13% increase from the same period last year.
The most popular categories during Q1 were:
1. Digital Content & Subscriptions
2. Apparel & Accessories
3. Sport & Fitness
4. Consumer Electronics
5. Consumer Packaged Goods
Certain categories such as consumer electronics and sport and fitness are filled with products that are new, innovative and expensive. Online reviews play a role in the buying decision for many of these products.
Fake reviews are always a concern, and the problem may be bigger than previously thought.
There have long been reports and rumors of businesses posting negative reviews of their competitors’ products or companies that pay or reward users to write glowing reviews, a practice known as cyber-shilling.
Marketing professors Duncan Simester of the Massachusetts Institute of Technology and Eric Anderson of Northwestern University did a study based on reviews posted on the website of a major private-label apparel company. The duo found that about 5% of the product reviews were written by customers with no record of actually buying the item. Those reviews were “significantly more negative” than the others.
Those bogus reviews have consequences, Simester said. Low ratings result in significantly less demand for an item for at least 12 months.
It’s unclear why customers would post negative reviews about products they didn’t buy. Consumers might be acting as self-appointed brand managers (Yikes!) that see the reviews as a way to give feedback to a company about products, regardless of whether they bought them. Or they might be seeking to raise their online social status by posting with great frequency or detail, assuming that doing so increases their level of expertise, the study said.
Keep this in mind… very few customers write reviews. For the private-label apparel brand, fewer than 2 percent of the company’s customers wrote reviews. People who write reviews generally buy more items, are more likely to buy at a discount, are more likely to return items and are more likely to buy new or niche items.
The takeaway for brands is to keep tabs on who is writing reviews about your product. If they aren’t your customers a nice email might get them to take their writing elsewhere. For consumers…take reviews with a HUGE grain of salt. Do not use reviews as your primary data point in the purchasing decision.
