From Reviews to Revenue

How do rating and reviews affect conversion rates on e-commerce sites?
Summary
Using data supplied by PowerReviews, a company that works with global brands to collect and display customer reviews, the Spiegel Research Center analyzed how ratings and reviews impact ecommerce conversion. While in previous studies on reviews, Spiegel examined data from a number of companies, in this study we took a different approach choosing to focus on one of PowerReviews’ customers, Hammacher Schlemmer, a company that provides one-of-a kind products and offers a lifetime guarantee.
Full Paper Summary > 
Context
PowerReviews research found that 95% of consumers use reviews, and 86% consider them to be an essential part of the purchase journey. In our two prior studies on reviews in partnership with PowerReviews, Spiegel looked at the circumstances under which reviews are most impactful on purchase behavior and how reviews differ depending on where they originate from and how they impact sales.

In this study, Spiegel worked with data provided by gift and specialty items company, Hammacher Schlemmer to better understand how reviews impact ecommerce conversion, especially in cases in which the products are typically unfamiliar, and the purchases are considered. 
Spiegel Insight
Proof
Action Items for Marketers
Initial reviews have the biggest conversion impact.
The SRC research team found that the first five reviews generated for a product on Hammacher Schlemmer’s website have the biggest conversion impact for that product.
As a company, after you have gathered a baseline number of reviews for a given product, focus efforts on collecting reviews for products with few or no reviews by sending an email after a customer’s purchase prompting them to write a review.
Reviews have greater conversion rates for products that are more expensive
When a lower-priced product on Hammacher Schlemmer’s website begins displaying reviews, the conversion rate for that product increases up to 190%. However, when a high priced product begins displaying reviews, there is a much higher conversion impact—up to a 380% increase.
Focus on getting your customers to write reviews for higher priced items by prompting them in an email after purchase of these items.
Higher priced products need more reviews
Higher priced items on Hammacher Schlemmer’s website need at least five reviews in order to see the greatest conversion impact, whereas low-priced products only need 2-4 reviews to see a significant conversion impact.
Focus on getting your customers to write reviews for higher priced items by prompting them in an email after purchase of these items.
Academic Publications & Presentation
For a full listing of academic publications and presentations, click here