How Online Customer Reviews can help “Brick & Mortar” Retailers

While marketers and researchers slice and dice social media noise, or chasing a diminishing number of customers who still are willing to respond to survey requests, customer review data is not being explored to its potential both online and off.

“Review sites operate effectively at a transactional level. They provide a day to day journal of the interactions between buyers and brands. They enable people to discuss experiences in a world where brands are adjudicated, at least in part, by the experiences of others. They are the basis for reaction. They enable people to pass judgment and to publish those judgments for all the world to see.”

Online retailers have been aware of the value customer reviews bring to improve their business results for a long time.  Numerous studies were conducted to discover and document their operational and financial impact. One of the latest is from Bazaarvoice

bazaarvoice stats

The impact of online customer reviews (customer generated content) on operations of brick and mortar retailers is less well understood. Nevertheless, it can be quite dramatic.

Here are just 3 examples how retail merchandising processes can be optimized leveraging customer reviews analytics:

  • More sales per visit – Too many choices often confuse consumers and prevent them from making a purchase. A few, customer-preferred products make it much easier for a consumer to choose from. Consumers trust their peers more than advertisers, even when they don’t know the reviewers personally.
  • Higher profit per store – Products with reputation for disappointing their customers are more likely to be returned. Handling returns reduces store employees’ time selling and serving customers. The transaction cost of handling returns drains a store’s bottom line.
  • Better customer service – According to our analysis, the “showrooming” effect is caused by poor service, not a price differential. Sales personal can leverage customer reviews to help consumers select the right product for them based on their personal priorities.
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