We've covered the topic on this blog and elsewhere. Over a year ago we discovered the Ratings J-Curve across our clients which still holds true today: 80% of reviews are positive. One of our first branded manufacturers, Burpee, commented that negative reviews actually help conversion. And I've written an article explaining other benefits of negative reviews in iMedia.

The topic came up again in a great article from Joan Voight in adweek, titled "Negative Reviews are Really Positive". The article reports several of our branded clients carrying reviews:

The surveys come as many brands are joining Amazon.com and review sites such as yelp.com, tripadvisor.com and consumersearch.com in offering reviews on their web sites. In May, Toshiba joined Dell and Hewlett Packard in offering online reviews "to enhance the buying experience." Levi's will join Fair Indigo and EMS in the apparel space, offering customer reviews by the close of 2007.

Bill Blass, formerly of Sears and Lands' End wisely explains:

"If all reviews are good, customers question if the ratings are legitimate," Bill Bass, CEO of Fair Indigo, told Adweek. "Not only will people ignore the reviews, but it will hurt their trust in the brand. It would be better to have no reviews at all."

And John Lazarchik of PETCO has predicted:

"In two years customer reviews on branded sites will be more common," said John Lazarchic, Petco's vice president of e-commerce. "A few years after that if shoppers don't find reviews on a site, they'll just go shop somewhere else."

There were interesting and useful comments on the article in Retail Wire. Here are some of the highlights:

Consumers have a significant appreciation for the reviews because right or wrong, consumers tend to trust other consumers, more than they trust the advertised message. Advice to retailers and product manufacturers:

o Don't fight it. Reviews are a major factor in e-commerce. You will need to deal with it.

o Resist the temptation to write a review "from the company" because more times than not it comes across defensive and corporate.

o Read the reviews carefully and consider what criticisms are worthy, and take it to heart. Act accordingly. The online review process isn't scientific but in many ways, you are benefiting from a free focus group.

o Don't act defensively if a review knocks your product. The review might be real, or it might have been submitted by one of your haters or competitors. Let the review process take care of itself. In the end, if your product is attacked unfairly, others will come to your rescue. It happens almost all the time.

David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates

+++++++++++++

Having customer reviews or feedback on site is just plain common sense. In some of the focus groups I have held, I found that most online shoppers have done their research before making the purchase and, therefore, if they can't find reviews of products on the store's site, they will go elsewhere for information. The biggest concern for online retailers is keeping customers on their site until the purchase is complete. Having reviews and feedback ensures the customer stays within that particular website…

Doron Levy, president, Captus Business Consulting

++++++++++++++

Frank is right–companies need to listen to negative comments by customers. If customers are unhappy about something; especially if it appears to be widespread, then you know exactly what needs to be changed about your product to make it more attractive to customers. Research on persuasion indicates that people are more persuaded by by arguments if positive and negative points are presented. Word of mouth has always been an important part of customer decision making. Having customers post reviews is another form of word of mouth marketing. Ignoring what customers have to say about your products or trying to manipulate what customers say would be a dangerous move.

Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

++++++++++++++

Regarding response to negative internet feedback, I think the retailer needs to respond as professionally as possible, speaking candidly and respectfully to those who criticize. It is also a great opportunity to learn; find were there is a misunderstanding of the intent or use of products and services, or gain an greater view of how the site (retailer) is doing a dis-service to the customer. I will admit that feedback is more available from online sources as the internet offer a great deal of anonymity.

Jerry Gelsomino, Vice President of Marketing and Brand Experience, Pratt Corporation

In short, we don't expect this question to go away, however I think over our nearly two years of experience serving reviews for retailers and branded manufacturers the evidence is overwhelming to suggest that negative reviews should not be feared.

• 61% of 13- to 25-year-olds feel personally responsible for making a difference in the world, suggests a survey of 1,800 young people to be released today. It says 81% have volunteered in the past year; 69% consider a company's social and environmental commitment when deciding where to shop, and 83% will trust a company more if it is socially/environmentally responsible. The online study — by two Boston-based companies, Cone Inc. and AMP Insights — suggests these millennials are "the most socially conscious consumers to date."

This is a very good trend for Bill Bass and our friends at Fair Indigo (read Sam's interview of Bill here).  Bill couldn't have had better timing on launching this new business.

This research also provides more context around Richard Branson's decision to donate 100% of profits from his travel companies in the Virgin Group to go towards the research of alternative, low-polluting fuel for travel.  Regardless of why Mr. Branson made this decision, whether it is motivated to reach the millennials or whether it is an epiphany he had about his impact on the earth's resources or both doesn't matter.  You have to applaud him either way.

The USA Today article talks about how this generation has grown up during the extremely trying aftermath of 9/11.  And it has impacted their behavior forever.  They are also growing up during a time where there are escalating fears about our footprint on the earth.  I saw a variation of this article last night on Yahoo's homepage.  No wonder they are getting more civically involved than any recent generation.  Depleted of resources completely in only 44 years?

The opportunity here is for companies to both do good for the environment and reach the millennials (the next generation of 100 million consumers that are about to have serious spending power).  I can't imagine a better set of ingredients for a positive word-of-mouth spark, and companies like Fair Indigo, Virgin, and Wal-Mart (see my previous post) are very smart to capitalize on this.  It both feels right and you make more money – we need more movements like this in this post-Enron environment.  Companies are facing a growing generation of the most educated, jaded, rich, and socially conscious consumers ever.  If you aren't thinking about this yet, you should be.  There is a massive market shift underway, but we are just at the beginning of it.

Now, to end on an optimistic note.  I have said it before, and I will remind you again.  I am a technology optimist.  There are many opportunities here for new ventures to capitalize on alternative energy, nanotechnology, and biotechnology to both reverse this trend and become rich heroes in the process.  Kleiner Perkins, the VC with the highest returns in the world, isn't dumb.  Read this article about John Doerr in BusinessWeek.  The opportunity is staggering and ripe for positive word-of-mouth.

And, finally, a special thanks to Kelly Mooney for giving the best keynote of the Shop.org Annual Summit a few weeks ago.  Sam already wrote a summary of the Summit, but there was no doubt that Kelly's research on the "digital millennials" was the most insightful presentation of the show.  I am honored to be speaking at her conference, iCitizen, tomorrow in Columbus, Ohio.

As a pioneer in new apparel merchandising strategies at Land's End, and later Sears, Bill knows eCommerce. And more to the point, (especially for his business!) he knows how to sell apparel online.

We're proud to have Bill and Fair Indigo as a Bazaarvoice client. Within weeks from signing with Bazaarvoice, we launched with Bazaarvoice Ratings and Reviews. Fair Indigo is possibly the first branded apparel manufacturer / retailer to feature ratings and reviews. 

Bill shared some information about his new companies and his thoughts on why reviews is important for Fair Indigo and its customers…

1. Tell us about your new company, Fair Indigo. How did you come up with the idea? What's your story?

One of the people I had worked with at Lands’ End started drinking fair trade coffee and wanted to buy some fair trade apparel – that is clothing made by people are paid fair wages and treated well.  Turns out there weren’t any fair trade clothing companies out there so we decided to start one.  It wasn’t easy finding factories that paid workers fair wages, but over the course of the past 18 months we found some of the best factories and co-ops in the industry and worked with them to meet our quality and wage standards.

2. How is Fair Indigo different than competitors or alternatives?

We pay the workers who make our clothes fair wages rather than minimum ones.  For the first time, customers can now buy fashionable, high-quality clothes that were made by people who were paid and treated fairly.

3. Given your experience at Land's End and Sears, what are the top two or three lessons you've learned about online merchandising?

Customers don’t have the ability to try on clothes when they are buying online, so we have focused on helping customers make sure that they get the clothes they want and aren’t surprised when the package arrives on their doorstep.  We developed new tools to help customers zoom in and see the detail of the clothing.  We made sure that every item is pictured in every color.  We are adding customer reviews so shoppers can see what other like-minded (and like-bodied) people have thought about our clothes.  And finally, we back everything with an unconditional guarantee:  customers can return anything, at any time, for any reason for an exchange or refund.  You might notice that none of these have anything to do with what products are featured on the home page, what products are pushed through email, or anything having to do with upselling – all areas that most companies tend to focus on.

4. Based on what you've learned, and since you call all the shots now, how will you do things differently? Where will you focus? What will you NOT do?

I actually don’t get to "call all the shots".  We are an employee-owned company, we all sit together and don’t have offices, and there are frank, open and honest discussions about most of the things we do.  Luckily we worked together for many years before starting this company and have a shared belief system that traces its heritage to Gary Comer’s founding principal for Lands’ End: take care of the customer, take care of the employees, and the rest will take care of itself.  We merely extended this a little by adding "take care of the people making the clothes".  A shared belief system leads to quick decisions and blessedly short meetings.
During a visit to Seattle several years ago I spent the morning visiting a company that relentlessly focused on its competition.  In the afternoon I stopped by Amazon and was struck that I constantly heard them talk about their customer but never a single word (nor thought, as far as I could tell) about their competition.  When I mentioned this to Jeff Bezos he stated that a company can either be competitor-focused or customer-focused but it can’t be both.  I think he is right.  We choose to be customer-focused.  That is why we like customer reviews.

5. You are one of the first apparel manufacturers to offer ratings and reviews…why is it so important to Fair Indigo?

Vanderbilt University completed a study a few years ago that showed that customers trust reviews by other customers more than expert reviews.  This rings true because I find I also trust customer reviews and they are always the first place I turn when I am shopping for something new.  At Fair Indigo we want customers to find the clothes that will be just right for them.  Customer reviews along with great visualization technology is the best way we know to make it easy for customers to find the best clothes.

6. Why do you believe Ratings and Reviews will increase sales?

It really isn’t about increasing sales, it is about making sure customers find the right clothes and aren’t surprised when the package arrives.  That better customer experience might translate into increased sales but that would be a by-product, not a goal.

7. What impact do you anticipate reviews will have on your product design process?

We have a customer focus group that currently gives us feedback on our styles and designs, but logistics limit it to people who live near our headquarters in Madison, Wisconsin.  Reviews on fairindigo.com will open up that process to all our customers.

8. Are you concerned about negative reviews?

I don’t think anyone gets too enthused about their bad grades getting posted for the whole world to see, but we would much rather have someone find out that a size isn’t running true by reading it on fairindigo.com while they can still adjust their order rather than having the item arrive in their home and then put them through the hassle of returning and exchanging it.

9. How do you anticipate using reviews in your customer communications?

I don’t see us using reviews as a marketing tool.  They are really more of a customer service tool.  We do plan on integrating customer reviews into our retail stores (our first opens here in Madison on November 1, 2006).  We will have a kiosk in every store where customers can scan the barcodes on our clothes and up will pop customer reviews as well as information about the factory where the garment was made.

10. Anything else you'd like to add?

If I say no, do you change the title to "Nine Questions With Bill Bass"?  Just kidding.

We founded Fair Indigo to provide style with a conscience, to give customers an option of well-made, stylish clothes that were crafted by people around the world who were paid fairly and treated well.  We also want to make it easy for customers to shop with us so we launched as a multi-channel company with catalogs and stores (ok, a store but more to come) as well as fairindigo.com.  We think making customer reviews available through every channel possible will make it easier for customers to shop with us and ultimately be a better customer experience.