The rising shopping influence of third-party reviews
In this the first in a series of articles for 2016, I’m going to be looking at shopping behaviour trends across channels and devices, using primarily the Australian data from GfK’s global 2015 Futurebuy study. Occasionally I’ll refer to other countries’ Futurebuy data, and also GfK’s ConsumerLife 20-year global consumer trends study.
Let’s look at how the opinions of family, friends, and increasingly that of strangers, is influencing shoppers’ decision making.
Who’s influencing who?
We’ve been hearing for a number of years how the consumer and shopper are now king. And we’ve seen proof of this with product recalls and the like driven by shopper power on social media. Here are some selected factoids from GfK Futurebuy that further prove the point:
– 47 per cent of participating shoppers* said, “Retailers, advertisers, and brands have less influence on my purchase decisions than ever before”.
– On the other hand, nearly one third (31 per cent) agreed that, “My social networks have become as important as other information sources for me to make the best product choices”. This was up from 28 per cent the previous year. This figure is even higher – nearly double, in the 60 per cents – for the ‘leading edge consumers’. Around 15 per cent of the Australian population, these are consumers who are passionate about shopping, technologically savvy, and heavily and highly influentially networked. They are a bellwether for where the rest of the market will get to in a couple of years’ time.
– When asked about activities performed on a mobile device, the last time a device was used by shoppers to help them shop, “accessing reviews of the product/service” came in at number five out of a list of 25 activities.
– Types of third-party influences are similarly ranked in importance. Rated as important or very important factors on influencing shopping decisions were, ‘opinions of family/friends/colleagues’ (39 per cent); ‘online expert reviews’ (36 per cent); ‘online reviews from other shoppers’ (35 per cent)’ and ‘consumer opinion websites’ (32 per cent). The importance of third-party influence was consistently ranked above advertising and apps, and some of the third-party influences were stronger than catalogues, coupons, and price comparison websites. (Note that this does change by category being purchased).
The influence of retailers and brands is decreasing (more on this with regard to loyalty in a future article) and the role of third parties – more often than not strangers as much as family and friends – is increasing.
What this means for retailers and manufacturers
Retailers and brands need to ensure they tap into the role of reviews – not just through seeking likes on Facebook and being tweeted, but being where shoppers are when they are actively searching for information to help them evaluate product and retailer choice. This means cultivating bloggers, ensuring presence on product review and consumer opinion websites, and actively using and incentivising advocates and loyal customers to influence others to trial and purchase.
It also means brands and retailers should be using customers’ reviews in physical and online stores to aid shoppers in product selection. Not the brand’s opinion, or the store manager’s opinion, but, for instance, Jane Smith from Epping’s opinion. This is powerful because it’s peer to peer opinions – Jane Smith is more likely to be ‘someone like me’ and like similar things as me than a brand manager or even a store manager. This is par for the course in the travel sector, or if you’re Amazon, but its use in Australian retail is patchy.
One that’s doing it well online, and sometimes instore, is Dan Murphy’s (example below). In their online store, when you pull up a wine you can see how many customer reviews it has, how many average stars as a result of reviews it has, and you can write a review yourself. When you click on ‘Reviews’ you can see overall product rating, enjoyment, and value for money levels, and click on an individual review to read it. Further, you can filter reviews by overall rating, enjoyment, value for money, vintage of the wine, and the age and gender of the reviewer (where supplied).
In Dan Murphy’s physical stores, I occasionally see product reviews both by the store manager and a customer. This is written on a wobbler and placed next to the price ticket for the wine. I think that they could take this a step further and ‘institutionalise’ it by having the store use its own customers – from that store – to write the review. It’s all about proactively harnessing consumer and shopper opinion for your benefit – and potentially trading them up in the process.
*Source: GfK Futurebuy 2015 Australian data, sample n = 1,000.
Norrelle Goldring is shopper lead, APAC at global research and retail datahouse, GfK. She specialises in improving shopping experiences by understanding how and why people buy things. She can be reached on 0437 335 686 or at [email protected]
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