Paul M. Banas on Consumer Insights, Marketing Research, and the Digital Media Landscape
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Category — Online Retail

How Word Of Mouth Can Drive Retail Buzz

In my previous post on social shopping, there was a good comment exchange with Shammara on the role of word of mouth in online retail, which led me to look at the influence of online reviews on purchase behavior.

From this Deloitte study, we find the 82% of online shoppers who read reviews say reviews have a direct influence on what they buy, either changing their minds on which product to buy or to provide reassurance on purchasing their original choice.

consumer review purchase influence

This word of mouth influence from consumer generated reviews covers a broad range of products, from electronics to consumer packaged goods.

consumer review product purchases influence

There also seems to be a wide range of approaches that allow sites to capitalize on word of mouth.

For instance, at Amazon.com you can find not only customer reviews, but also editorial reviews, personalized recommendations, wish lists, tell a friend links, Listmania, and “Customers who bought (or looked at) this item also bought”, etc.

Buzzillions, as Shammara pointed out, is an aggregator of customer reviews of products that collects reviews from retailers across the web, such as REI, Staples, and BH Photo.

What I find innovative about their approach is how they provide verification for all 2.3 million reviews they’ve collected to date and the unique way they use tagging to classify the different reviews across all the categories they cover.  This tagging allows them provide useful snapshot reviews that include summaries of top pros, cons, and best uses for a product.

Yelp is a review site that does for restaurants and other local venues, what Amazon does for books.

By incorporating key features of social networking, including such things as extensive user profiles and connections to friends, Yelp levers social proof and authority, which are two of the four key principles of persuasive social media marketing, in order to bring their site to life.

Each of these resources utilize customer and/or user reviews in different ways, but all are highly effective.  By levering the power of consumer generated word of mouth, they are able to take online (and offline) retail to the next level.

July 29, 2008   2 Comments

The Social Aspect Of Online Retail

Versus visiting a mall or any other type of shopping center, many online retailers tends to be singularly focused on one aspect of shopping, the final purchase.

There is no sense of wandering through the aisles, watching others as they shop, or having someone with you to provide advice.

What is missing is the social aspect of buying something, which is one of the foundations of the Web 2.0 experience.  And for some online retailers who are not optimized to take advantage of this, this is a missed opportunity.

According to a recent Guidant\Synovate eNation study, more than 60% of respondents report being drawn to online retailers that employ Web 2.0 tools and techniques.

Online Shopping Sites

These social tools include soliciting feedback and providing recommendations on products and services, along with welcoming them and making them feel part of a community.

The reason why this is critical is that word of mouth is one of the primary influencers in having a consumer purchase one product over another.

According to this Nielsen Online Global Consumer study, recommendations from consumers are the most trusted form of advertising out there, along with consumer opinions posted online.

Most Trusted Forms of Advertising

An enhanced online shopping experience isn’t necessarily fancier graphics or flash programs.

The best online retail experiences are the ones that lever one of the most important aspects of offline shopping, the social aspect and the opinions of others.

July 21, 2008   10 Comments