Below is part of an article from Trendwatching.com on what they've coined as Transparency Tyranny-the effect of online consumer reviews, habits and posts in regards to marketing and sales.
Really interesting. Read on....
Remember the promises of flawless matching of supply and demand, and limitless consumer power, when the web burst onto the scene a dozen years ago? While the last few years didn’t disappoint (consumers are already enjoying near-full transparency of prices and, in categories like travel and music, near-full transparency of opinions as well), 2007 could be the year in which TRANSPARENCY TYRANNY really starts scaring the shit out of non-performing brands. Why? For one, 1+ billion consumers are now online, and the majority of them have been online for years. They're skilled bargain seekers and ‘best of the best’ hunters, they're avid online networkers and they're opinionated reviewers and advisors (tripadvisor.com now boasts 5,000,000+ travel reviews).
1+ billion consumers are now online and the majority of them have been online for years. They're skilled bargain seekers and ‘best of the best’ hunters, they're avid online networkers and they're opinionated reviewers and advisors. And there will no shortage of future contributors and viewers, especially with younger generations weighing in heavily; those that are born to the web, to whom contributing online is a given. Simply put: there will be many more consumers posting reviews, and they will increasingly consider them an integral part of their relationships with brands and businesses.
The non-competitive and the downright incompetent have very few stones left to hide under: never before have consumers’ purchase decisions been so strongly influenced by all kinds of transparency. In fact, TRANSPARENCY TYRANNY now rules:"Old economy fog is clearing: no longer can incompetence, below-par performance, ignored global standards, anti-social & anti-eco behavior, or opaque pricing be obscured. In its place has come a transparent, fully informed marketplace, where producers have no excuse left to underperform. TRANSPARENCY TYRANNY for some, TRANSPARENCY TRIUMPH for others."
TRANSPARENCY TYRANNY | Facts and figures
Some numbers to convince those execs in your organization who still don’t see the TRANSPARENCY TYRANNY deluge coming…
- 80% of online shopping time is spent researching products rather than buying them. (TechCrunch)
- 71% of online shoppers read reviews, making it the most widely read consumer-generated content. (Forrester)
- In a test of product conversion with and without product ratings by customers. Conversion nearly doubled, going from .44% to 1.04% after the same product displayed its five-star rating. (Marketing Experiments Journal)
- 60 percent of online shoppers provide feedback about a shopping experience, and are more likely to give feedback about a positive experience than a negative one. (JupiterResearch)
- User-generated ratings and reviews are the second most important site feature behind search. Retailers who adopt ratings and reviews as a differentiator and retention strategy will gain market share. (JupiterResearch)
- In a study of 2,000 shoppers – 92% deemed customer reviews as “extremely” or “very” helpful and ~ 71% used keyword searches to find products. (eTailing Group)
- 59% of their users considered customer reviews to be more valuable than expert reviews. (Bizrate)
Only 26% of the 137 top retailers surveyed offered customer ratings and reviews, but 96% of them ranked customer ratings and reviews as an effective or very effective tactic at driving conversion. (Forrester)
63% of consumers indicate they are more likely to purchase from a site if it has product ratings and reviews. (CompUSA & iPerceptions study)- Conversion rates are higher on products with less than perfect reviews (less than 5 stars) than those without reviews at all, indicating that the customer feels that the product has been properly reviewed by other customers. (Burpee)
- 39 percent of those who bought from sites with reviews cite the reviews as the primary factor influencing the purchase decision. (Foresee Results Study, 2006)