May 20, 2016
Recently, a study by the University of Colorado at Boulder caused quite a stir in the digital advertising, commerce, and media worlds about the actual relevance and value of online reviews.
Bart de Langhe, author of the study and professor of marketing at CU-Boulder’s Leeds School of Business states: “The likelihood that an item with a higher user rating performs objectively better than an item with a lower user rating is only 57%.” He continues, “A correspondence of 50% would be random, so user ratings provide very little insight about objective product performance.”
The study’s basic premise is that since the average person has a hard time evaluating the objective quality of a product (without multiple alternatives and extensive side-by-side testing as is done in Consumer Reports), in-market shoppers may rely instead on price or brand as better cues for quality. It also states that “average user ratings lack convergence with Consumer Reports scores,” “are often based on insufficient sample sizes,” “do not predict resale prices in the used-product marketplace,” and “are higher for more expensive products and premium brands.”
Finally, it concludes: “Consumers’ trust in the average user rating as a cue for objective quality appears to be based on an ‘illusion of validity.’”
In response to the UC-Boulder report, headlines like “Reviews are Worthless” and “Online Product Reviews Are Even Less Trustworthy Than You Think” surfaced left and right, but here at Bazaarvoice, we have plenty of reasons to respectfully disagree! While many of our expert findings align with some key components of the UC-Boulder report, it’s important we clarify what all this means to the consumer, brand or retailer, and share some deeper insights.
We’ve spent 10 years earning a reputation as industry experts on consumer reviews and user ratings and believe they are indeed “very valid.” Here’s what we do know:
- Multiple info sources add to consumer confidence. Even though the study says people are more likely to evaluate a product they feel strongly about and that feedback may be disproportionate – in other words, moderate opinions may be underrepresented online in favor of reviews by product ‘lovers’ and ‘haters’ – we have found that shoppers who interact with reviews are 104% more likely to buy. And if they see both reviews and consumer Q&A, that likelihood jumps to 166%.
- 71% of people read consumer reviews before making a purchase. And, as older and younger generations adapt to and use more online media (whether PC, tablet or mobile) they are more likely to research online what they buy offline (ROBO) – whether it’s roofing materials or running shoes. Then, once in-store, they may see a poster or print ad featuring some of the same online review information or star-ratings that further influences their buy.
Nielsen reported that consumers are more likely to take action based on online consumer opinions (70%) over anything other than personal recommendations (84%). Moreover, for every $1 of online revenue, our ROBO multiplier found that across multiple categories, a range of 2X-to-5X of additional in-store revenue is influenced by consumer-generated content (CGC).
- More is MORE (more volume is better): This one is fairly self-explanatory. The higher the review volume and average rating, the more orders our internet retailers receive.
The study goes on to state that 5% of reviews are fake and are posted by employees, competitors, consumers who receive incentives, or someone who has never used the product at all.
- Since 7-out-of-10 U.S. consumers have questioned the trustworthiness of reviews across the web, we’ve made authenticity one of our most important core values. When we found that 44% of U.S. consumers said they would be more trusting of reviews if presented with a ‘trust mark’ and an accompanying description of anti-fraud policies, we created the Authentic Reviews Trust Mark.
- There is great benefit to both 5-star and 1-star reviews. In keeping with our core value of authenticity, we believe that when consumers read reviews – however positive, negative, or average – they gather more detailed information that helps tailor their shopping decisions to their individual needs and desires. For example, they might learn more about an exact size, fit, or shade in a shoe or whether a hotel room is safe and clean (vs. luxurious and spacious).
- And finally, although 51% of Millennials don’t want a parent’s or peer’s help and actually prefer product reviews from people they don’t know, 66% of Boomers still tend to trust the advice of people they do know – such as friends or family members.
This all goes to show that no matter what your generation, reviews matter!
And let’s just look at even more facts – in 2010, just under two billion people were connected to the internet. In 2020, it’s projected we will reach at least five billion.
Today, we’re holding more computing power in our pockets than used to be on most mainframes. And for many in developing countries, the smartphone will be their first computer and sometimes their only device with an internet connection. And in less than two years, our smartphone may be our only computer.
So, as more and more of us shop offline or online and connect – whether via smartphone, tablet, or PC – we immediately expect to find best prices, locations, sizes, colors, styles, and see what others are saying about a potential purchase rather than wait to read the next issue of Consumer Reports. We want instant information – both in-store/offline and online. So each-and-every star rating and review does matter.
Learn much, much more here via our most recent report – The Conversation Index.
