Embrace the review revolution

The explosion of the internet and particularly broadband has created an exciting new growth driver for retailers, but is also rewriting the rules about how retailers and customers communicate.

It is a brave new retail world in which reputations can be won or lost instantly in cyberspace. If a product is bad, service is poor or pricing deemed unfair, consumers are now their own champions and can share their thoughts with millions of others in online communities. And it‘s a trend that will only continue to grow.

With price comparison across numerous retailers, product reviews and ratings, there is nowhere for retailers to hide. Feedback and judgment is instant – the old adage of “buyer beware” should now be more appropriately titled “retailer beware”. But should retailers be scared of the review revolution?

Reviews in themselves are not new. What is new is the volume, speed and access with which consumers can provide feedback. Some retailers have been encouraging customer participation online for many years. EBay and Amazon are just two examples. And, in the leisure industry, the ability to feedback on hotels and resorts online is now routinely expected by consumers.

Launching a review service is a daunting decision for a retailer to make. We all spend time and money protecting our product offer and our brand names – why create a public opportunity to shoot that down?

I believe retailers should embrace this communication with customers rather than fear it. If we don’t provide customers with the opportunity to comment on products and service on our sites, they will simply use other forums to do so. In the process, the retailer loses a valuable opportunity to learn from this rich consumer insight.

When online product reviews first started, received wisdom was that sales dropped 25 per cent or more on a one-star review and rose about 10 to 15 per cent on a five-star review. But, over the past 12 months, as consumers have become more social media savvy, it appears they are giving increasingly balanced opinions.

If a product is not right for them, rather than just not right, consumers will say that. They are more even-handed and will defend a product or retailer if they think a comment is unjust.

And, for retailers, it provides a wealth of information that would have previously taken months of focus groups, polls and surveys, at a cost, to find out. Consumers are taking the time to give feedback, because they believe it is worth their while to do so and retailers should listen.

Retailers should be encouraged, because I believe this trend demonstrates that customers want to engage in a positive and constructive way. At a time when consumers are tightening their belts, those retailers that engage in these conversations will build better relationships and benefit from increased customer loyalty as a result.