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Online customer reviews are profitable for retailers and help build a sense of community for online shoppers, 82% of whom consider such reviews better than researching a product in-store with a sales associate, according to a Power Reviews study conducted by the e-tailing group.

Over one-half of consumers surveyed said they spend 10 or more minutes reading reviews before making a final decision on a purchase.

Reviews are a “must-have” merchant functionality to compete online today, the study concluded.

The Consumer’s View

Some 98% of surveyed shoppers said they read reviews on retailers’ websites prior to making a product purchase, ranging from “once in a while” (9%) to “most of the time” (43%).

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Moreover, some seek out independent review sites (34% say they do) and read reviews on Amazon (26%).

The ‘Social Researcher’

The 65% of consumers who read customer reviews “always” or “most of the time” prior to making a decision to purchase a product are dubbed Social Researchers by the study.

These consumers are at least 20% more likely than average to report as engaging in various aspects of interacting with product reviews:

  • 78% spend more than 10 minutes in the review reading process.
  • 86% find customer reviews extremely or very important.
  • 76% find “top-rated product” lists to be extremely or very important.
  • 64% research products online more than half the time, no matter where they buy the product (store/web/catalog).

Social Researchers are 76% more likely to shop on a retailer’s website that offered social navigation rather than a competitor’s that didn’t.

The Merchant’s View

Among merchants who have added user reviews, the most important rationales cited for doing so were to increase the value of customer experience, followed by building customer loyalty and driving sales.

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Most merchants agreed, in general, that exposing customers to peer-based reviews increases conversion in the long run. But traditional ROI measurement was not the main concern of interviewed merchants, the study found.

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Specifically, most (37%) compared the performance of products that were reviewed with those that had not been reviewed at all.

About the whitepaper: The “Merchant and Customer Perspectives on Customer Reviews and User-Generated Content” whitepaper was authored by Lauren Freedman of the e-tailing Group in February 2008. Some 1,200 consumers who shop at least 4 times a year and spend $500 or more annually were asked about trends, behavior, and their use of product or service reviews. Also interviewed were executives from a wide variety of online retailers and portals.

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