Product reviews revolutionize the way retail chains work
The customer journey starts online for more and more consumers. Therefore, retail chains are investing heavily in their online presence. As product reviews leads to increased traffic and sales, retail chains are starting to collect large amounts of product reviews though loyalty programs.
Product reviews help the consumers make better purchasing decisions, while providing the retail chains with large amounts of data that can be used throughout the organization.
In this article we explain the role of product reviews in retail chains omnichannel strategies, and how product reviews can revolutionize the way retail chains work with products.
The customer journey starts online
The customer journey starts online, regardless of whether the customer will complete the purchase in a physical or online store. There are industry differences, but for products such as clothing and electronics only 15% never do research online before shopping in a physical store!
This means that the online store is crucial to any retail chain, as it plays an important role in the customer journey for more and more consumers. Without a good presence online, the chains physical stores will lose both traffic and sales.
Retail chains invest heavily in their online presence
During the pandemic, the growth in online sales exploded. For some industries, the online channel now accounts for 50% of total sales. But for most retail chains, the online channel still accounts for a relatively small proportion of total sales. However, the significance of the online store for total sales should not be underestimated!
For industries like clothing, electronics and sporting goods, retail chains realized years ago that they had to focus on their online presence not to lose customers to pure ecommerce players. Now days, even retail chains in large industries such as groceries, building materials and pharmacies, where the online channel accounts for a small percentage of total sales, are investing heavily in their online presence.
Apotek 1, Norway’s leading pharmacy with 400 physical stores, started gathering ratings and reviews with Lipscore to compete with online stores like Apotera and Farmasiet. Flisekompaniet, Right Price Tiles and Optimera are all investing heavily in their online presence, gathering ratings and reviews as part of their omnichannel strategy.
«People live busy everyday lives. It’s just easier and faster to shop online. Therefor companies like these are increasingly investing in ecommerce to provide consumers with necessary product information online. Including information about quality, price, and ratings from other users. Customers value the feedback from other users highly. So, reviews are contributing to more quality product information as well as increased sales both online and in physical stores, » Jonny, COO at Lipscore, explains.
Product reviews increase traffic and sales for physical stores
Producers can sell their products directly to consumers all around the world, which means that the consumers have more choices than ever when buying products. They are online 24/7, spending time on social media, actively searching for products and services, comparing products and prices.
Therefore, it’s not enough for a retail chain just to have an online store. The online store must be found and visited, and the products need to be presented with correct pictures, product descriptions, stock status and prices. They also need to have a handful product ratings and reviews on a big portion of the products to boost trust and conversion in the online store, and to increase traffic and sales for the retail chains physical stores.
Gather more product reviews through loyalty programs
As the competition for customers heats up, retail chains invest heavily in loyalty programs. This makes it possible for retail chains with physical stores to gather large amounts of product reviews which are displayed in the online store, leading to increased traffic and sales for their physical stores.
In our experience, most large retail chains have surprisingly few product reviews in their online stores, simply because they only ask customers who complete the purchase online for a review, and online sales just accounts for a small percentage of total sales.
However, when large retailers like Skeidar and Elektroimportøren start asking customers who complete the purchase in their physical stores for reviews, the number of product reviews in their online stores will skyrocket!
«Skeidar and Elektroimportøren both have very large product portfolios. By gathering as many product reviews as possible from all their sales channels, both online and from physical stores, they are also able to constantly improve and optimize their product range, » says Jonny Hansen, COO at Lipscore.
Product reviews revolutionize the way retail chains work with products
When large retail chains start gathering product reviews from all their customers, regardless of whether the purchase is completed online or in a physical store, this means that they soon will display large amounts of ratings and reviews for more and more products in their online stores – which in turn will increase traffic and sales.
By gathering product reviews from all customers, the retail chains also get large amounts of customer data that can be used throughout the organization, thus give them a competitive advantage in the long run.
For example, the ecommerce manager can use the reviews to improve product descriptions and to create marketing campaigns. Product Managers can use the data to develop better products and to negotiate prices. Customer Service can use the data to turn unhappy customers to ambassadors. Store managers can display the ratings on price labels and use feedback on products to sell more. The logistics manager can use the data to identify challenges with the distribution and reduce returns.
This means that product reviews can revolutionize the way retail chains work with products!
Systematic collection of customer data
In addition to ask for feedback on products, retail chains can ask customers what they think about the store or online store where they shopped, and about the overall service experience.
Many chains get this feedback today with the help of mystery shopping, market research, store visits, employee interviews, web analytics, etc. However, this is often time consuming, expensive and complicated, and rarely provides data that can be used as a management tool in a hectic retail everyday life.
By gathering feedback from customers with Lipscore, Chain Managers and other parts of the organization can gain valuable insight into the customers’ shopping experience in store.
Read: «How to use customers’ own experiences to implement a customer-oriented and data-driven business strategy – without large and risky investments?»
Source: NovaRetail og NHO Service og Handel
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