What Research Says About the Impact of Customer Reviews for Online Retailers

What Research Says About the Impact of Customer Reviews for Online Retailers

July 19, 2019 Off By Koehler Home Decor

Online retailers of all shapes and sizes are often reminded of the importance of gaining, and then sharing positive reviews of both their products and their business in general.

But how much of an impact do reviews and ratings have on online sales? Does the number of reviews and ratings matter? Are reviews and ratings more important for higher-priced products/services?

Northwestern University’s Spiegel Research Center and PowerReviews recently tackled those questions in an in depth research study that makes for very interesting reading.

The researchers examined detailed data from two online retailers of primarily lower-priced product categories and a third online retailer of higher-priced gifts to determine the relationship between reviews/ratings and purchase behavior (see the full report for the complete methodology).

Including reviews on product pages measurably boosts sales, and conversion rates steadily rise with the first few pieces of feedback, the analysis found.

This first metric is one that you might have expected. The conversion rate on a page that includes five reviews is 270% higher, on average, than that of a page with no reviews.

However, the volume of reviews displayed may not be quite as important as you imagined. The benefits of including more reviews decrease rather quickly once a base number is reached, the analysis found.

For one of the e-commerce sites examined, nearly all of the increase in purchase likelihood came from the first 10 reviews, and the first 5 reviews drove the bulk of that increase.

The impact of reviews on sales is especially strong with higher-priced products: For the gift retailer included in the study, the conversion rate increased 190% when reviews were displayed for a lower-priced product but spiked 380% when reviews were displayed for a higher-priced product.

This makes a lot of practical sense. The more money people are being asked to spend to buy a certain product the more cautious they are likely to be, so will do more research and comparison shopping – and want to read more reviews, before they make the decision to part with their cash.

Star ratings also have a measurable impact on sales, the analysis found.

However, the highest-rated (5 stars out of 5) products do not necessarily have the highest lift in conversions.

Purchase likelihood typically peaks for products with ratings in the 4.0 – 4.7 range, and then begins to decrease as ratings approach 5 stars. That may be because it’s actually rather hard to believe that a product could have pleased everyone so much, and so consumers may wonder about the validity of all 5 star reviews.

The sales lift from ratings varies significantly by product category: Some items see a steady increase in purchase probability as ratings increase ,while other items see a more uneven impact.

Although the research does offer a few surprises, it reinforces the wisdom of taking the time to gather reviews, and so if that is not a current focus of your overall marketing plans it should become one as soon as possible.

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