By Nikki Baird, Managing Partner, in cooperation with RetailWire
1/15/2008
I was at CES last week (not something that I recommend the week before NRF, by the way), and if I had to put my finger on any one single consumer trend that will have an impact on retail this year, I would say that it will be UGC, or user-generated content (think everyday people loading stuff on YouTube). UGC doesn’t have to be as fancy as video or animation – it can be as simple as a product review. If you think that UGC is too far out there for retailers (beyond their eCommerce executives) to be worrying about, read through this discussion from RetailWire below. Even something as innocuous as a customer review posted in the store raises thorny questions about UGC – and retailers will find themselves right on the front line.
Each business morning on RetailWire.com, retailing execs get plugged in to the latest industry news and issues with key insights from a "BrainTrust" of retail industry experts. Here are excerpts from one of these unique RetailWire online Discussions, along with results from the RetailWire Instant Poll.
Customer Reviews at Stores
By Tom Ryan, Managing Editor, RetailWire
Borrowing a page from online sellers, some brick & mortars have begun featuring customer reviews on displays at their retail locations. The big difference is that most of the reviews are positive, according to a recent Wall Street Journal article.
Customer reviews have proven to be effective sales tools for online sellers such as Amazon.com, eBay, and other big sites. And having both negative and positive reviews offers the customer some reassurance in their product selection.
At Cabela's stores, for instance, customers can find a sign for a Texsport combination fan and light displaying a 'five-star' consumer rating along with a July 16 review from AlanK of Kansas City, Mo. He wrote: "As someone who does a lot of summertime tent camping, I can't begin to tell [you] how valuable this little combo is. I hang it over my cot every night and I have a bright reading light and a cool breeze to go with it."
Brookstone Inc, a specialty gadget retailer, also offered only positive reviews in its holiday e-mail blasts and January catalogs. "We're not going to pick a one-star [rating]," Steve August, Brookstone's operational vice president of customer marketing, told The Journal.
On the other hand, Staples, which began using customer ratings and reviews for the first time this holiday season on its printers and some of its paper shredders, features both positive and negative reviews, Display tags on the products feature customer ratings on a scale of 1 to 5 with three "pros" and three "cons" about the product that the retailer itself has written based on feedback from customers.
Discussion Questions: What do you think of using customer ratings and reviews as a merchandising tool at the store-level? How can stores capture what seems to be an effective sales tools for e-commerce providers? Does the display of only positive reviews of decrease the likelihood that consumers will find the postings credible?
RetailWire Instant Poll Results:
RetailWire BrainTrust Comments:
What's at play here is credibility (of product and eventually brand)...who's going to believe these "reviews" if there isn't the occasional 'clinker'? All product reviews are bell curve in nature and most consumers sense that, but still make their own choice in the end.
If retailers are going to do something like this, they've got to take the good with the bad. Be open and honest! This approach certainly hasn't hurt Amazon.
- Lee Peterson, Vice President, Creative Services, WD Partners
When you look at how Amazon, iTunes and other pioneers of the e-commerce space have changed the way people shop, there are two key factors. The first is reviews, which provide feedback from other consumers, and the other is insights into other similar products customers bought.
I believe these two suggestive selling techniques will absolutely weave their way into the brick and mortar shopping experience. They have to in order to for the channel to continue to be relevant.
- Andrew Gaffney, Editor and Publisher, Retail TouchPoints
So much marketing and advertising is based on making CEOs feel good about themselves. Employees and shoppers can often tell the difference. But some shoppers swallow the baloney because they're looking for any form of psychological reinforcement, even if the source is questionable. Cable TV shopping shows don't include fair and balanced views of their products. The audience knows they're being sold. Yet millions buy anyway. No retailer needs to satisfy everyone. There are retailers for folks who want to know all sides of the story (eBay, Staples, Amazon) and there are folks who just want to be reassured (QVC, HSN, etc.)
- Mark Lilien, Consultant, Retail Technology Group
Some retailers have been very effective and credible using positive-only reviews in store for years, but typically the reviews come from staff. The ones that have been most successful are those that personalize the message with a name, face and even the in-store presence of the endorser.
Trader Joe's is one of the best at this today. Few shoppers realize how many of the store manager's picks "hand-written" on the blackboards are really corporate promotions. The TJ's touch builds credibility and they only endorse great products. Virgin Records was also fantastic at this idea with staff pics showing photos of the clerk and his/her favorites. Another chain with an individual feel. Many drug stores have also done a terrific job with pharmacist reviews, building on their professional trust.
- Alison Chaltas, Principal, Interscope
I think how retailers package and present reviews in store will soon become an irrelevant question. Consumers will just use their mobile phones to get the whole story, either from the retailer's own site, from a general product search, or increasingly from "meta-review" sites that pull together reviews of products across a bunch of different retailing sites and summarize the info for easy consumption. Instead of trying to fight this by filtering the info available at the shelf, retailers (and, by the way, manufacturers) need to embrace it. Highlighting one or two reviews is great, but the real power of a 4- or 5-star rating is when a thousand people rated it that way, rather than a handful of people, and the "why" behind the rating is often times more important than the rating itself.
- Nikki Baird, Managing Partner, RSR Research
Read the entire story and RetailWire discussion at:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/12662
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