Online sales soar with product reviews on retailers’ own websites, a study finds.

Consumers are 270% more likely to purchase a product with five reviews than one with zero reviews, according to a recent study.

The study “How Online Reviews Influence Sales,” conducted by the Spiegel Research Center at Northwestern University’s Medill School of Journalism, Media and Integrated Marketing Communications, analyzed more than 100,000 SKUs and 15 million page views of reviews from two consumer packaged goods retailers and one high-end gift retailer over the course of a year. The center did not name the companies.

The study only analyzed how reviews impact conversion on the retailer’s own e-commerce site. It did not take into consideration the relevance of reviews on an online marketplace, like Amazon, where hundreds of similar products are pitted against each other for a sale.

Product reviews become more important the more expensive the product, the study finds. Based on data from the gift retailer, if a consumer looked at product reviews on a low-priced category, the conversion rate increased by 190%, and if she looked at reviews for products in the high-priced category, the conversion increased 380%.

On the gift retailer’s site, lower-priced items need two to four reviews to generate a significant increase in conversion, and high-priced products need at least five reviews to result in a large lift in conversion. However, for this retailer, the conversion rate did not increase after 10 reviews, even if the retailer had more reviews.

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“We found that nearly all of the increase in purchase likelihood occurs within the first 10 reviews, and the first five reviews drive the bulk of this increase,” the report finds.

More product reviews are needed to boost conversion if the product affects health and safety, a consumer’s personal identity (such as hair dye) or if the consumer was recently introduced to the brand, the study finds.

The study finds that negative reviews are important too. If a product has 5.0 stars, consumers may think it’s too good to be true. Purchase likelihood peaks around 4.2-4.7 stars, and conversion dips slightly after the product reviews average a rating of more than 4.7 stars.

The initial reviews of a product are important for retailers. Amazon.com Inc., for example, recently launched its own service to gather consumer reviews for marketplace sellers with products that have fewer than than five reviews. Amazon is No. 1 in the Internet 2017 Retailer Top 500.

 

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