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Online Reviews Continue to Drive Consumption
New research finds that companies failing to actively monitor the channel for user-generated content risk falling behind.
Posted Jun 1, 2009
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As more people become increasingly comfortable browsing -- and shopping -- online, the well-documented impact of Web-based reviews is beginning to be seen even on nontraditional products and services, according to new research from Princeton, N.J.–based Opinion Research Corp (ORC).

The ORC survey asked consumers to name the products and services they investigated online. The segments cited by the largest share of respondents were:

  • travel, recreation, and leisure.............. 80 percent;
  • electronic goods................................ 78 percent;
  • household products/services............... 70 percent;
  • clothing............................................ 60 percent;
  • automotive....................................... 56 percent;
  • personal care.................................... 45 percent; and
  • food................................................. 36 percent.

Travel and electronic goods led the pack again this year, despite the fact that each shed two percentage points from its 2008 results. The remaining products and services on the list realized increases in 2009, with food jumping 12 percentage points.

The current economic situation gets the credit for expanding the spectrum of products consumers are investigating online, says Linda Shea, senior vice president and global managing director for ORC's customer strategies practice. "There's more comparison-shopping going on," she says, "with people online reading and checking blogs because they're more critical in the decisions they make in how they're spending their dollars."

Overall, 84 percent of respondents indicated that online customer evaluations influence the decision to purchase a product or service. However, of the 84 percent, less than one-third claim to have posted their own feedback on the Web. "I'm surprised we don't see a higher number of those actually posting," Shea says.

Shea says she believes some consumers continue to hold back, but that the stagnant statistics are a sign of maturity in the world of online customer reviews. "You always have folks willing to share experiences, but we've also reached a general point in the U.S. with levels of quality [for products and services]," she says.

That isn't to say the gap won't start to narrow, Shea says, with more people starting to post their own online reviews. She points to Generation Y's increasing influence and purchasing power combined with its inclination to use the Web. "It's a matter of who's getting involved from a demographics standpoint," she says. "It has to do with the purchasing power of the younger generations, and as [that] becomes stronger, we'll see more participation in providing those online reviews."

Whether or not the gap actually closes, company executives should begin looking at proactive measures to stay on top of this burgeoning communication channel. Failure to do so could negatively impact branding, Shea warns. "Take control, provide that forum, and encourage people by letting them know what is going on within your company," she says. "If you don't, it will get out of control and can do major damage to your brand."

Shea cites Dell's IdeaStorm as an example of how a company can take the reins in terms of online customer reviews. By taking the reins, Dell has been able to develop a user group that helps the company conduct research -- and even get ideas for new products or services.

Shea says the time has come for other companies to take the plunge -- or else risk being left behind. "There are plenty of [other] examples today with online purchasing channels giving an opportunity to look at reviews from customers and, in some cases, even allow [customers] to do competitive shopping," she says. "So it's there and has become an expectation; use it to your advantage."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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