By Nikki Baird, Managing Partner
2/5/2008
I had a very interesting shopping experience recently that hit on one of my favorite gripes about product reviews. Because I haven’t spoken with them yet, the company shall remain anonymous: I haven’t confirmed that this is their actual strategy or just coincidence.
Here’s what happened. My backpack – essentially my mobile office – was falling apart. NRF pretty much put the final nail in the coffin, as aside from half the zipper pulls breaking off, the shoulder strap was starting to tear. So I went online to find a replacement. I found a site with a great assortment and started digging in. When I narrowed my choices down to six, I started reading the product reviews. This eliminated 3 off the bat – all with the same kinds of problems I had with my last bag. The final 3 were very interesting: two by two different manufacturers, and one branded by the site itself – a private label computer backpack.
These three bags, taken together, were fascinating. It was as if the retailer had read the product reviews of the other two bags, and designed their own bag to address all of the complaints of those product reviews. Bag X didn’t have a place for a water bottle – a complaint that surfaced in the reviews. The site-branded bag did. The zipper pulls broke too easily on Bag Y. The site-branded bad redesigned the pulls to eliminate the problem. This went on for several features, across both national branded bags. Every flaw identified by consumers was addressed by the site-branded bag. And it was the same price – and about a pound lighter.
As a shopper, I love product reviews. I use them all the time. In fact, I have a theory about the impact of product reviews on toy shopping, which I’ll post on my blog later. As an industry observer, I find product reviews to be a goldmine that is almost completely untapped – my online computer bag company being the only exception I’ve seen. Led by Amazon, online retailers have realized the power of the network effect of product reviews, but retailers with stores are now struggling to integrate this community-generated information into the store experience.
So how should you be using product reviews? I see four opportunities:
- Get insight into who is buying your products. I know this information can be had in a thousand other ways, but product reviews – especially because you can see them not only for your own site, but on competitors’ sites too – can be an important addition into the mix that goes into brewing up customer demographics. Are the people buying from you the same or different from the type of people buying it from competitors? Are they the same type of people you thought would be buying this item or this category? There is definitely some self-selection at play – not everyone writes a review, and if someone isn’t already working on it, the industry definitely needs an analysis of how people who write reviews are different from the general population. But when this type of information is combined with traditional sources of demographic data, you can minimize the bias introduced by the “volunteering” aspect of writing reviews, and gain some valuable consumer – and competitive - insights.
- Get insight into WHY they are buying it. This is one of the most difficult insights to get, and increasingly one of the most valuable – and in product reviews, consumers give you that information for free. Demographics only tell you who. You can’t deliver a personalized experience unless you know the why behind the buy. The computer bag website nailed this perfectly: they realized that many of the complaints about the national brand bags were from people who were heavy travelers, who relied on their bag as their “office on the road.” They complained about bags that looked like they were designed for business people but weren’t up to the pounding that road warriors dish out. The retailer responded with a bag that specifically addressed those complaints, and then used it as a selling point.
- A source for product improvements and assortment decisions. All of these points apply equally to retailers and manufacturers, but none is more relevant than this one. In product reviews, consumers can be brutally honest. They tell you exactly what they like and don’t like about a product. If you’re redesigning the product for next year or trying to decide what products to carry over from season to season, I implore you: read the product reviews first. This is free market research. And by the way, as more and more consumers rely on product reviews in making selections, they will start to remember which manufacturers and retailers paid attention to those reviews and addressed the problems – and which ones didn’t. This gets back to the trouble retailers will have in integrating product reviews into the store experience – when you have a smaller assortment in stores than you do online, how do you justify taking up precious shelf space for a product that got mediocre reviews online? How do you justify continuing to carry a product that is rating badly across the board? As a manufacturer, how do you justify NOT changing the product to address the hundreds of complaints displayed publicly for other consumers to see and use?
- Identify an untapped market for a new product. This was the area where the computer bag retailer really differentiated. Once I had purchased my bag (and yes, it was the private label bag), I searched through their site again with an eye toward where the private label bags fit into the overall assortment. Coincidentally – or perhaps by design – there was a private label bag that seemed to fit in nearly every price range and category. I can’t tell you if their bag aimed at “sporty students” addressed the lacks of the nationally branded bags aimed at that market, but I would be surprised if it didn’t. Retailers: product reviews give your private label strategy a leg up, if you use them to identify where holes exist in the assortment. Manufacturers: if you aren’t using product reviews to improve your products, this is where retailers can use private label to really surpass you when it comes to meeting consumers’ needs. And this is publicly available information – as a manufacturer, you should be using it yourself to address the holes in your offering.
I want to emphasize again that there is inherent bias in product reviews, and someone (not me – I’m no consumer researcher) needs to tease those out (if someone already has, tell me about it). Until that analysis is done, product reviews should not be used alone to draw conclusions about products or customers. But they can – and should – be used in concert with all of the other data sources and analyses that retailers use today to understand consumers and the products they buy.
I think we’ve only seen the first round of value that product reviews can provide – that was the network effect of using the community to add value to the site by contributing user-generated content. The next round will be about how we use that information. Right now, retailers and manufacturers who do use that information effectively have a leg up on everyone else.
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