Web 2.0 functionality delivers new world social commerce features giving customers the means to interact with one another in order to make better buying decisions. It is something that online retailers are increasingly tapping into for their own benefit.
According to a recent study by e-consultancy (http://www.e-consultancy.com/) and Bazaarvoice (http://www.bazaarvoice.com/) “Social Commerce Report 2007” report), giving your customers a voice can pay off with increased sales. According to the report, customer product reviews are increasing retail e-commerce conversion rates, site traffic and average order values. Put simply, social commerce is about customers having the means to interact with one another in order to make better buying decisions.
More than half of UK online customers say reviews are extremely or very important in making an online purchase, and more than half say they have more trust and respect for brands that show product reviews. These numbers are likely to rise as more online businesses adopt ratings and reviews.
The Social Commerce Report 2007 is based on a survey of more than 800 online marketers, including 360 online sellers, carried out in June and July 2007. The majority of online seller respondents were in the retail, travel, financial services and publishing sectors.
The survey revealed that online retailers are increasingly tapping into user-generated content (UGC) as a way of increasing sales and improving customer satisfaction: more than half of all online sellers (51%) consider UGC as either extremely important or very important to company strategy over the next year.
Customer ratings and reviews are being used by 28% of online sellers, with more than half (52%) saying that they were considering the use of this feature on their websites.
The most widely perceived benefit of ratings and reviews among online sellers is an improvement in site conversion rates, viewed as a major benefit by 79% of responding organisations. Improved customer retention and loyalty, and better search engine optimisation, are also viewed as a major benefit by 73% and 59% of online sellers respectively.
The overwhelming majority of survey respondents (97%) said that they found ratings and reviews either extremely helpful or very helpful “as consumers”.
The fact that more than half of retailers believe the customer voice to be integral to their sales and customer service strategies shows that ratings and reviews will have a big part to play in the growth of online retail. We expect that the reliance on reviews will grow as more retailers adopt this feature.
The full E-consultancy / Bazaarvoice Social Commerce Report 2007, recommended reading for those selling online, is now available for download (http://www.e-consultancy.com/publications/social-commerce-report-2007/).