Updated: Jan 2, 2020
Amazon was the very first e-commerce website that allowed consumers to put ratings and reviews of products online, in 1995. According to many critics, this was a move that was referred to as the ‘retail suicide'.
Today, customer ratings and reviews are primarily referred to as UGC (user-generated content). This has become a big force today. The average product rating is important for around 54% of the consumers. At the same time, the total number of reviews are important to around 46% of the consumers. In order to win the war of retail commerce, it is important to understand the way in which consumers weight and process both of these variables.
Reviewed products and those that are rated high are not always the best choice for the customers. Often at times, customers end up choosing outdated products that have very high reviews but lack features. Similarly, customers may also select products that are rated lower but have an increased number of review counts through steeper discounts. Along with that, there are some products that are brand new as a result of which they have no reviews or ratings. However, these still may be superior to the other offerings in the market.
Our team carried out a study based on the choice of consumers between more than one products that had varying average ratings and reviews, but similar attributes. This is because it is very common for retailers to provide product options in a single set of choice rather than individual options.
One hypothesis that our research team carried out was that the customer's diagnosis of the reviews number and average ratings of products is not fixed. Rather, it will depend on how much value each attributed possesses. Our prime focus was on the aggregate reviews solely because aggregate reviews are easily accessed as compared to the individual reviews. As a result of this, aggregate reviews are considered more often in the decision-making process. Moreover, it was also hypothesized in case the level is low vs high in a set of choice, customers are more reliant on the reviews number. Where fewer reviews may mean a lack of evidence, they are quite influential in the decision-making process.
The key findings of the study include the following:
· Average ratings of products is a much crucial diagnostic cue as compared to the reviews number, in the case of product quality
· Customers are more likely to go for a product rated lower with greater reviews, as compared to a product that is rated higher but with lesser number of reviews in case the level of review numbers is lower for a choice set. However, when the level of review numbers is higher for the choice set, customers will go with the product that is rated higher.
Online retailers can make use of this research to position their products and to market them very effectively. There are a number of retailers who want their consumers to review their products, by offering freebies or discounts. This is very important for products that carry low visibility in the marketplace. Such strategies may be useful in driving the number of reviews, but cannot guarantee that the average product rating will improve for sure!
Author: Austin Stanfel
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