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: Creative Retail Awards shortlist announced at RetailEXPO...
24.05.2019   #displays #design

Creative Retail Awards shortlist announced at RetailEXPO

Innovative, inspirational and forward-thinking retail display and design

The Creative Retail Awards, which recognise and reward innovation and excellence in worldwide retail design, released the shortlist for their 2019 Awards at RetailEXPO, Olympia London last week.The Awards received hundreds of entries from around the ...

Thumbnail-Photo: Consumers demand sustainable fashion but won’t pay more...
28.06.2019   #sustainability #fashion

Consumers demand sustainable fashion but won’t pay more

Top five demands for the industry to become more sustainable

New research suggests over half (52 percent) of consumers in the UK and US want the fashion industry to become more sustainable, with calls for reduced packaging and fair pay for workers among their top demands. But only 29 percent of these ...

Thumbnail-Photo: Of local heroes and global players
04.07.2019   #online trading #digital marketing

Of local heroes and global players

An overview of online marketplaces

Amazon and eBay – many retailers heavily rely on these top names. Yet there are other online marketplaces that could offer useful features. After all, the easy solution isn’t necessarily the perfect fit for ...

Thumbnail-Photo: retail trends 2-2019: focus sales promotion
03.06.2019   #customer satisfaction #customer relationship management

retail trends 2-2019: focus "sales promotion"

How to win, serve, and keep customers

Read our latest edition retail trends 2-2019 online as an e-paper. ...

Thumbnail-Photo: Attracting customers to your retail store: location-based marketing...
03.06.2019   #customer satisfaction #digital marketing

Attracting customers to your retail store: location-based marketing

Right people, right place, right time: getting your customers' attention

“Check out this suede jacket that matches your pants and shoes." Once a customer is near the entrance of a fashion boutique, marketers deliver personalized promotions via hologram. After the customer has entered the store, the ...

Thumbnail-Photo: Implementing new ideas: Design thinking in the retail world...
29.04.2019   #customer satisfaction #trend research

Implementing new ideas: Design thinking in the retail world

Focus on customer expectations

It may be uncomfortable at times – but a change in perspective can help businesses to implement new ideas and successfully complete ongoing processes. Design thinking is a customer-centric approach that can help in this endeavor.“What do ...

Thumbnail-Photo: Cox Business Annual Survey: What do customers want?...
31.05.2019   #cashpoints #brick and mortar retail

Cox Business' Annual Survey: What do customers want?

Survey shows consumers want greater connection and more American-made products from the small businesses.

Small businesses should keep their cashiers, according to the 2019 Cox Business Consumer Pulse on Small Businesses. The Amazon Go cashier-less shopping model is only of growing interest among respondents ages 18-29 – up eight percentage points ...

Thumbnail-Photo: Designer Outlet Croatia as hybrid retail destination...
04.04.2019   #shoppingcenter #customer counting

Designer Outlet Croatia as hybrid retail destination

Building footfall and counting shopper traffic

Designer Outlet Croatia, majority-owned by Ingka Centres has enhanced shopper traffic performance by adding an aspirational, 'hybrid' retail destination to the existing IKEA Store in Zagreb supported by the implementation of a traffic ...

Thumbnail-Photo: Stores with employee background checks favored...
17.06.2019   #security #customer satisfaction

Stores with employee background checks favored

Sterling’s 2019 ‘Retail Industry Screening’ survey

Sterling, expert in background and identity services, today released the results of its 2019 ‘Retail Industry Screening’ survey. An inaugural initiative, the survey examines Americans’ perspectives, experiences and concerns related ...

Thumbnail-Photo: U.K. and USA: What about consumer spending?
28.05.2019   #marketing #shopping habits

U.K. and USA: What about consumer spending?

Millennials driving success of new retail models and shaping retail trends in U.S. and U.K.

As Millennials gain a reputation for being category killers across various industries, a recent study by First Insight, a global technology company transforming how leading retailers make product investment, pricing and marketing decisions found ...

Supplier

HappyOrNot
HappyOrNot
Innere Kanalstraße 15
50823 Köln
CCV Deutschland GmbH
CCV Deutschland GmbH
Gewerbering 1
84072 Au i.d.Hallertau
iXtenso - Magazin für den Einzelhandel
iXtenso - Magazin für den Einzelhandel
Celsiusstraße 43
53125 Bonn