We frequently talk about the many and varied retailing changes induced by the Internet. One development is a little less obvious but still substantial in its impact. That is, the growth of online reviews has created space for an entirely new industry of online review management service providers that help retailers deal with the consumer comments they receive online.

Review sites are common and well known, ranging from dedicated, industry-specific sites to Amazon- and eBay-hosted reviews of sellers on their sites to comments on Yelp that cover virtually every kind of company. Other social media sites also commonly feature informal reviews, such as when a user tweets about a positive or negative experience with a retailer. Because of their vast spread and common usage, consumers increasingly trust these sites as sources of unbiased information. Consumers not only list online reviews as one of their most trusted sources of information but also assert that a company that attracts positive reviews is one that they are more likely to trust.

But keeping up with all these reviews, both explicit and informal, is generally beyond the capacity of a retailer. Especially when they are relatively small in size, retailers already have enough to do, just to establish a social media or online presence. Ensuring that they follow up with every electronic comment and review becomes a burden that could readily overwhelm their resources and energy.

In response, a new industry has entered the scene, one that offers assistance to those overwhelmed retailers. Online review management companies promise that they will keep track of all mentions of the retailer online, which they then summarize in a daily report. They also help retailers request reviews from new customers, and they provide analytics tools so that retailers can search or sort their reviews as needed. Some service providers promise to help retailers establish and manage the review sections on their own websites as well.

With these capabilities, retailers can identify common issues and, ideally, address them online, to show consumers how they are dealing with the problem. They also can organize how the reviews appear on their websites, such that more positive responses might receive special emphasis. It would be unethical to remove negative reviews, but if a retailer can surround a negative comment with dozens of positive responses, that negative information likely has less impact on potential customers.

 

Discussion Questions:

1. How can retailers manage the data they gather from online reviews of their stores?
2. Do consumers rely on online reviews to make purchase decisions?

Source: Tom Ryan, Retail Wire, October 6, 2015