After launching customer-generated product reviews last fall, e-retailer NetShops Inc. worked with researchers from the University of Nebraska and found that the reviews led to a 26% increase in product unit sales, NetShops director of e-commerce Jay Gordman tells Internet Retailer.
The reviews make our customers more confident in buying from us, Gordman says.
NetShops, which sells a broad range of products through 156 separate niche sites including Hammocks.com, JustGlobes.com and DayBeds.com, began posting consumer reviews on all sites simultaneously last November through a hosted system from Millbrae, CA-based PowerReviews Inc. NetShops is No. 104 in the Internet Retailer Top 500 Guide.
Early this year, NetShops began working with two researchers from the College of Information Science and Technology at the University of Nebraska at Omaha, former NetShops web developer Alanah Davis and Deepak Khazanchi, to study the impact of the reviews content on sales. Working with Gordman of NetShops, which is also based in Omaha, Davis and Khazanchi compared unit sales of 546 products in May 2007 to sales of the same products a year earlier. By May 2007, NetShops had amassed about 19,500 reviews on its sites, or about three per product, Gordman says.
By comparing product sales year-to-year, and by looking at growth rates for non-reviewed as well as reviewed products, NetShops was able to eliminate extraneous factors such as seasonal buying activity and recent web site improvements that might also have impacted sales, Gordman says. The study method also accounted for the fact that the most popular products tend to get the most reviews, he adds.
We saw sales increasing in general at one rate, but sales of reviewed products increasing at a higher rate, Gordman says.
With the 26% increase in sales across 546 products, NetShops earned back the cost of implementing the reviews program within a few weeks, Gordman says. We recouped our costs very quickly, he says, adding that all costs were related to the time of in-house staff in preparing sites for review content.
NetShops pays no other fees to PowerReviews, instead sharing its review content on Buzzillions.com, a comparison shopping site operated by PowerReviews.
Gordman says he believes the reviews content has brought benefits to NetShops in addition to increased sales. Beyond the increased sales, we gain credibility with our customers for having user-generated content, he says.