The study finds that consumers are planning to spend less this year. Accordingly, we know that retailers are feeling the consumer's pain and don't have budgets to purchase and utilize all of the tools they would like, so they must choose right the first time. The study results confirm what many retailers have already discovered, Ratings & Reviews have been and continue to be consumers' most used and most trusted peer-generated content tool outside of the standard site information provided by retailers and manufacturers.

Key findings from the study:

• 48% of consumers plan to spend less, primarily in the automotive sector (50%), travel (46%), and CE (43%).
• This group plans to do more due diligence, looking for more information in more areas than the other groups (42% will visit 3 sites or more)
• Many of those reluctant to spend can still be positively influenced – 61% report that their confidence can be increased via online shopping resources
• 77% cite reviews as being useful in making a recent purchase
• Ratings & Reviews are the top ranked Content Discovery Tool for driving consumer trust and loyalty
  800 consumers were surveyed on their changing propensity to spend this year and on what tools they plan to use to help them feel more confident about their buying decisions.

The results showed that many consumers are planning to spend less (49%), more consumers are now going online to research their online AND offline purchases, and that very few of them have made up their mind on price (33%), brand (23%), and store/retailer (16%) associated with their purchase. 61% of those who said they were more reluctant to spend said their confidence could be increased if presented with the right information online.

This information should be empowering to retailers and manufacturers.
They have a clear opportunity to influence and win new customers, even in this challenging economy. The reality is that consumers know the data they need exists online, and they will find the content whether on your site or somewhere else. Check out how Amazon's heavy adoption of social commerce content and tools has helped them gain market share during the past couple quarters.

Customer Ratings & Reviews Are Top Ranked Content Tool
77% of all those surveyed cite reviews as being useful in making a recent purchase, making it the most used peer-generated content (ranking even higher than the actual Manufacturers website). 81% of this of those who said they plan to reduce their spend said they used ratings and reviews to make past purchases and that they are the top ranked tool that would make this group more confident when considering a purchase. 

As JupiterResearch states in the study, "Retailers must consider user generated content as a base line component of their overall offering and use it not only to enhance product descriptions, but to augment search and navigation experiences, enliven marketing messages and improve organic search results. In fact, some forward thinking retailers are beginning to incorporate the content consumers write about products in the original product descriptions to make them more accessible or consumer-focused. Furthermore, multichannel retailers can use this valued content in their stores, catalogs and other channels to bring the voice of the customer to all aspects of their customer interactions."

Learn more at upcoming Bazaarvoice events
Patti Freeman-Evans, vice president and research director at Forrester Research, will join Bazaarvoice and richrelevance in a series of retailer events to share consumer intelligence and online marketing strategies based on this research. For more information or to register for the New York event on March 3, 2009 or the San Francisco event on March 26, 2009, visit https://www.bmmreg.com/Engaged/.

There have been many exciting research moments for our industry in the past two years:

• When we discovered the Ratings J-Curve, including how it looks for apparel (a category that many expected not to follow the J-Curve trend)

• When Jupiter and Forrester showed how many shoppers read reviews (77% and 70%, respectively)
• When MarketingSherpa showed how many consumers preferred sites with reviews (58%)
• When we showed how negative reviews have a bigger positive impact on conversion than positive reviews and how smart retailers think about negative reviews
• When we worked with the Keller Fay Group to find out why consumers write reviews (primarily, to help each other) and how many of them are buying offline and then reviewing their purchase online (66%)
• When comScore and The Kelsey Group showed how online reviews impact offline purchasing (released this week)

• When we discovered how Ask & Answer impacts conversion (up 22%), how many users participate in questions and answers even though it is such a new medium in eCommerce, and how clients like The Home Depot are leveraging this new offering to differentiate and benefit their customers
• When we saw how reviews impact customer acquisition and documented our extensive findings in a whitepaper
• When Nielsen announced that consumer recommendations are the most trusted form of advertising (78% trust versus 34% for search-engine ads)

• When Deloitte (one of my former employers) showed how many consumers are influenced by reviews (82% of those that read them)

And this new holiday tradition is another major finding.  It shows just how much influence reviews online are having on offline shopping behavior.  This especially hits home for me because when Brant and I started this company in May of 2005 only around 10 retailers in the U.S. (including online-only, like Amazon.com) had reviews.  Now MarketingSherpa reported that 43% of retailers do (as of Feb-07).  That is having a broad impact on consumer expectations – reviews are quickly become a must-have for retailers and a norm for online shopping.

Most of these are intuitive findings and could be easily dismissed as "obvious".  But data informs strategy, as I learned so many times while working with clients as the founder of Coremetrics.

So, what do you do with this new data?  Here are a few ideas:

• Promote reviews for the same products featured in your Thanksgiving circular on your home page the week of Thanksgiving – this will make it easy for the 70 to 77% that are seeking reviews (and the 82% that are influenced when they read them) to realize that you have them

• Send an email about reviews on Thanksgiving morning with a subject line like, "Read Thousands of Customers' Reviews Before You Go Shopping on Friday".  In that email, feature the same products or categories of products that you have in your Thanksgiving circular
• Create distinct shopping paths linked for your home page such as "Our Best Friday Deals on Customer Top-Rated Holiday Gifts" and so on for all of your major categories featured in your in-store (and online) sale
• Push reviews again on Cyber Monday – both in email and on your home page – but with a distinct focus on online shopping
• Put top-rated circulars in your stores for greeters and category managers (like HD TV) to hand out to help in-store shoppers
• Feature reviews in your print circulars so that readers know that your site has reviews before they go online to research them

Want more?  Watch the holiday webinar that our Community Management team recorded.  And please don't forget to tell us your ideas as well!

And, finally, please support the Ray M. Greenly Scholarship Fund this holiday season by shopping at Shop.org's Cyber Monday portal.  All proceeds go to honor a great man that I had the pleasure of working with.  He helped grow Shop.org into the great organization that it is today.  And you will be helping to fund the future visionaries of the eCommerce industry.

This is exciting for us because this independent study validates what we've seen in actual results with our clients. In the words of Patti Freeman-Evans, the analyst on this report, 

"Shoppers who find user-generated reviews and ratings useful tend to spend more heavily online than average online buyers do. Moreover, they are more likely to say they are highly loyal to, buy more frequently from, and return their purchases less frequently to stores that feature user-generated product reviews. This is the winning trifecta of positive results from reviews and ratings features and speaks to the overall value of such a program in terms of profitability and customer retention. "

Leading Retail Analyst Shows Retailers Can Gain Market Share
Through Consumer-Generated Product Ratings & Reviews

Leading analyst firm says product ratings and reviews achieve a “winning trifecta” of increased loyalty, purchase frequency, and reduced returns for online retailers

Austin, TX – August 15, 2006 – Bazaarvoice, an innovator in helping brands use online word of mouth to build their businesses, today announced that JupiterResearch recently issued a study that shows retailers can drive sales by adding user-generated ratings and reviews to their Web sites. The report, entitled Retail Marketing: Driving Sales Through Consumer-Created Content, cites user-generated ratings and reviews as the second most important site feature behind search, and says that retailers who adopt ratings and reviews as a differentiator and retention strategy will gain market share.

“The recent report from JupiterResearch supports exactly what we’ve been seeing in the market,” said Brett Hurt, founder and CEO of Bazaarvoice. “Online retailers are adopting customer reviews as a way to create brand loyalty and increase sales. Our clients tell us that launching consumer-generated reviews is their important site initiative of the year, and we’re working closely with each of them to ensure it’s also the most successful.”

Reviews are Exploding
Trust in “someone like me” for advice and referrals has exploded from 20 percent to 68 percent in the last two years. (Edelman, January 2006). Recent surveys of top retailers from Shop.org and MarketingSherpa found that customer reviews were a top merchandising tactic. The recent report by JupiterResearch found that the number of online buyers who cite customer ratings and reviews as the most useful shopping site feature has more than doubled from 2005 to 2006.

Reviews Create Loyalty & Drive Sales
In addition to rising demand for consumer reviews, JupiterResearch also found that online shoppers who find user-generated product ratings and reviews useful are heavier online spenders than average online buyers. For example, online buyers who write a lot of product reviews make up only 20 percent of the online shopping population, but account for 32 percent of online sales. JupiterResearch also found that shoppers that find reviews useful are more likely to say they are more loyal to, buy more frequently from and return their purchases less frequently to stores that feature consumer-generated product reviews and ratings.

“Across the board, Bazaarvoice clients are finding that reviewers are their most valuable customers,” Hurt continued. “By increasing the loyalty of these influential, high-spending customers, retailers will significantly grow sales by enabling this feature.”

Reviews Are Positive
All retailers want to understand how negative reviews will impact their business. Recent research suggests that there is less to be concerned about than many retailers might imagine. According to research by KellerFay Group, 63 percent of all word of mouth is positive. Across all of Bazaarvoice clients, 80 percent of product ratings are 4 or 5 stars out of 5. As a third confirmation, JupiterResearch’s study concludes that 60 percent of online shoppers provide feedback about a shopping experience, and are more likely to give feedback about a positive experience than a negative one.

“I know the level of expertise and customization that is required to service large retailers, which is why Bazaarvoice offers a hosted and fully managed solution for on-site customer ratings and reviews,” says Sam Decker, vice president of marketing and products for Bazaarvoice and the former manager for Dell.com’s consumer web site. “We work closely with every client to help them customize a review program, manage the complete reviews process, and help them leverage reviews in their marketing and merchandising programs.”

In the JupiterResearch report, author Patti Freeman-Evans says that the “license model offers expertise and flexibility at a moderate cost.” Bazaarvoice offers hosted technology, full community management services, a dedicated account team, deep community analytics and syndication services to retailers for a fixed monthly subscription cost.
           
"This model, most notably offered by Bazaarvoice, allows retailers to take advantage of a great deal of vendor expertise, while retaining a good deal of flexibility in customizing the site experience to their individual needs,” writes Freeman-Evans, retail analyst at JupiterResearch. “The vendor takes on the responsibility of looking over the reviews for publication and provides services that assist retailers with optimization and marketing efforts.”

For more information about the Jupiter report, Retail Marketing: Driving Sales Through Consumer-Generated Content, please visit http://www.jupiterresearch.com or contact Bazaarvoice at http://www.bazaarvoice.com.

About Bazaarvoice
Based in Austin, Texas, Bazaarvoice offers outsourced technology, community management services, analytics, and syndication to encourage and harness word of mouth marketing, and bring it closer to a company’s brand and customer experience. The company’s flagship hosted and fully managed customer ratings and review service allows businesses to enable, encourage, and analyze customer ratings and reviews on their website. With Bazaarvoice, companies can empower their customers to share honest opinions and influence each other to make more informed and rewarding purchase decisions. Clients like CompUSA, Overstock.com, and PETCO benefit from a credible and reliable customer-to-customer community, without having to delve into complex IT work or the laborious process of community management. Bazaarvoice is a winner of the “Red Herring 100 North America” award by Red Herring magazine. For more information, please visit the company’s website at www.bazaarvoice.com or email document.write('info@bazaarvoice.com<\/a>'); info@bazaarvoice.com .