News • 20.03.2019

The new power of the consumer

Trend Radar Study 2019: why shoppers love product ratings

Sign on a wall with text we like you too; Copyright: Adam Jang/Unsplash...
Source: Adam Jang/Unsplash

A global study on the “rating economy” shows that product ratings are growing in importance, impacting shopping behavior and brand loyalty.

Customers are relying less on marketing messages, and the balance of power is shifting toward the consumer. Ratings have become an increasingly important evaluation tool for almost every kind of purchase. Worldwide, 71 percent of consumers consider product ratings to be “important” or “very important”. Furthermore, ratings are the third most important criterion in buying decisions after product features and price, even more significant than brand. This was the finding of the recent Trend Radar 2019 – The Rating Economy* study by the global strategy and marketing consultancy Simon-Kucher & Partners.

Product ratings are the new standard

Almost half of those surveyed said they regularly read reviews before making a purchase. One third of participants also usually leave their own ratings of the products they buy, while the majority of consumers (76 percent) have rated a product at least once.

Around two thirds of customers who are highly dissatisfied with their purchases leave a rating, but 75 percent of consumers are also motivated to submit a rating when they are particularly satisfied with a product. “As our study shows, a simple rating process is the third biggest factor in motivating consumers to leave a review,” explains Georg Tacke, CEO of Simon-Kucher. “Companies can increase the number of ratings submitted by making it as easy as possible for customers to rate their purchases – without requiring complicated log-in processes or asking too many detailed questions.”

Perception of better quality and transparency leads to higher customer satisfaction

In total, 51 percent of survey participants believe they receive more value for money due to product ratings. “Not only do they feel better informed and make fewer bad purchases, they also say the products they receive are of better quality,” Tacke emphasizes. The rating economy is therefore giving customers more transparency over a product’s value before they reach the point of purchase. In the past, consumers were largely powerless against companies, but thanks to ratings, they are gaining more and more power. By leaving ratings, they are able to quickly share their experiences with other potential buyers, thus influencing which products and companies are successful. “Consumers are less reliant on marketing promises and advertising messages from the providers themselves,” notes Tacke. “The balance of power is shifting toward the customer.”

Do companies need to rethink their traditional marketing strategies?

Being able to directly compare products quickly and easily between different providers is making customers more likely to switch; ratings are therefore eroding loyalty to brands and companies. One in three survey participants stated that they had switched to a different brand due to the product having a better rating. In many cases, customer reviews have overtaken brand in importance as a buying criterion. “Above all, people aged under 40 living in urban areas are less attached to particular brands. They find the recommendations of other shoppers more believable than marketing promises and use ratings to identify the products that best fit their needs,” says Tacke. “This makes positively rated products all the more valuable for the company – so should motivate providers to continually improve the quality of their products.”

Companies stand to benefit from the rating economy, too, since 20 percent of consumers report they would buy more when products are rated highly, and 15 percent would select more expensive products. 19 percent of those surveyed said they are even prepared to pay more for products with higher ratings. This has enormous consequences for companies, and not just because the increased transparency means providers with high-value products are more clearly differentiated from those with low-value products. “Providers will have to think deeply about how they can motivate their customers to submit more ratings. For example, what is the best way for companies to set up their online shops to make the product rating process as easy as possible for customer?” asks Tacke. “Sooner or later, every provider will have to develop a strategy for product ratings.”

Consumer electronics and tourism lead the way with ratings

Ratings aren’t granted the same level of importance in every industry. Overall, the role of product reviews is most significant for consumer electronics (60 percent of consumers worldwide refer to ratings before making their purchase decision) and travel and hospitality (60 percent). “In other industries, particularly insurance, automotive, and construction, ratings are seen as having relatively little importance,” Tacke adds. “The rating trend is still in its infancy, but we fully expect to see it develop further in the future.”

Source: Simon-Kucher & Partners

related articles:

popular articles:

Thumbnail-Photo: AfterPay: Survey on the shopping behaviour of Germans...
20.07.2020   #online trading #e-commerce

AfterPay: Survey on the shopping behaviour of Germans

German consumers will make a larger share of their purchases online in July

AfterPay Insights’ end of June research – now covering more 7.400 interviews with German online shoppers – indicates that German consumers will reduce their overall purchases in July. But at the same time, German consumers say ...

Thumbnail-Photo: WhatsApp Business: A direct line to customers...
29.05.2020   #customer satisfaction #customer relationship management

WhatsApp Business: A direct line to customers

About the installation, functions and advantages of the app

WhatsApp is a popular communication channel used by millions of people worldwide. Now small and medium-sized retailers or restaurants can use WhatsApp Business to quickly and easily engage and interact with their customers and build customer ...

Thumbnail-Photo: The Virtual Africa Big Retail Expo 2020 (ABRE 2020)...
06.07.2020   #digital marketing #marketing research

The Virtual Africa Big Retail Expo 2020 (ABRE 2020)

The spotlight is on the emerging trends in the retail industry at The Virtual Africa Big Retail Expo 2020, set to take place on 6th August 2020

The event is scheduled to begin from 0900 EAT till 1400 EAT. This exhibition is the first annual event which is dedicated to discussing the following:How do retailers keep up as the world tries to deal with the enormous pressure to adapt to ...

Thumbnail-Photo: Smart clothing to drive fitness wearable revenue...
10.06.2020   #trend research #fashion

Smart clothing to drive fitness wearable revenue

New report forcasts a rise of 11 billion Dollar by 2025

A new report from Juniper Research forecasts that annual revenue of integrated fitness clothing will rise from approximately $1 billion in 2020 to $11 billion in 2025. This rapid growth, boosted by higher pricing, will see smart clothing become the ...

Thumbnail-Photo: A return to core competencies: visual merchandising and customer service...
04.05.2020   #brick and mortar retail #services

A return to core competencies: visual merchandising and customer service

Showrooming with samples in brick-and-mortar retail

Brick-and-mortar stores are facing tremendous pressure: competition, pricing pressure, shifting consumer habits. Is setting up your own online store the answer? Unfortunately, it’s not that simple. ...

Thumbnail-Photo: Which businesses should be open?
17.06.2020   #brick and mortar retail #coronavirus

Which businesses should be open?

MIT study looks at tradeoffs between economic value and public health, across different types of retail

Banks and bookstores. Gyms and juice bars. Dental offices and department stores. The Covid-19 crisis has shuttered some kinds of businesses, while others have stayed open. But which places represent the best and worst tradeoffs, in terms of the ...

Thumbnail-Photo: The importance of effective complaint management...
12.08.2020   #customer satisfaction #customer relationship management

The importance of effective complaint management

A strategic and cross-channel approach to handling negative customer experiences

Customers are more demanding than ever, while brand loyalty is declining. Even a couple of negative experiences can alienate consumers and erode loyalty. Shoppers increasingly share bad reviews and complaints on public communication channels for ...

Thumbnail-Photo: 3 steps to personalisation in e-commerce
04.08.2020   #online trading #e-commerce

3 steps to personalisation in e-commerce

How retailers can build trust and foster customer loyalty

The COVID-19 pandemic has left a visible mark on the retail sector, and companies have had to find new ways to reach consumers effectively in a very short time. Many companies that had previously focused on stationary retail have expanded their ...

Thumbnail-Photo: COVID-19: Study reveals impact on hourly workforce...
04.05.2020   #online trading #e-commerce

COVID-19: Study reveals impact on hourly workforce

78 percent are worried about making ends meet during the pandemic and 47 percent have less than $1,000 in savings

Bluecrew, the staffing technology platform connecting job seekers with W-2 protected hourly work, released new survey results which indicate hourly workers are bearing the brunt of unemployment and uncertainty in the face of the COVID-19-fueled ...

Thumbnail-Photo: Custom-tailored: new in-store safe shopping journey solution...
13.05.2020   #consulting #brick and mortar retail

Custom-tailored: new in-store safe shopping journey solution

Suitsupply reinvents retail experience including virtual pre-shopping

Suitsupply, the global men's tailoring brand built on radically personal customer experiences, launches new retail journey as stores reopen. The upside of being global, and the staggered timelines of the outbreaks around the world, is the ...

Supplier

POS TUNING Udo Voßhenrich GmbH & Co KG
POS TUNING Udo Voßhenrich GmbH & Co KG
Am Zubringer 8
32107 Bad Salzuflen