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: Overspending is common when shopping online
25.06.2019   #online trading #customer analysis

Overspending is common when shopping online

Report on digital spending and its impact on American's credit card debt

About 2 in 5 (42 percent) of consumers admit blowing their budgets while online shopping in the past 6 months, according to new research from CouponFollow, an online couponing platform. The new report surveyed over 1,700 American consumers on their ...

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: 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: Digital natives value brick and mortar stores …...
11.07.2019   #consulting #customer satisfaction

"Digital natives" value brick and mortar stores …

… more than their parents or grandparents

Despite clear differences in expectations among shoppers of different generations, almost half of retailers (44 percent) have made no progress in tailoring the in-store shopping experience according to a recent study conducted by Oracle NetSuite, ...

Thumbnail-Photo: Digital food retail: customers expect more personalization...
07.06.2019   #personalization #food delivery service

Digital food retail: customers expect more personalization

New research sponsored by precima shows retailers must act quickly to develop a detailed understanding of shopping missions.

The fast-changing dynamics of the food retailing environment continue to challenge companies to keep pace with fast-changing shopper demands. The latest of these shifting shopper requirements involves their behavior on digital platforms and is ...

Thumbnail-Photo: Smile please! How to showcase products with amazing photos...
31.05.2019   #online marketing #product presentation

Smile please! How to showcase products with amazing photos

Quick guide to product photography

There is one fundamental difference between online and brick-and-mortar stores: Customers cannot touch, smell or try out the products. Essentially, the eyes decide whether something is ordered or not.That’s why product images and descriptions ...

Thumbnail-Photo: 91% of SMBs think customer reviews are critical...
25.07.2019   #customer satisfaction #customer relationship management

91% of SMBs think customer reviews are critical

Survey about online customer reviews on platforms

Uberall, Inc., a location marketing solution for businesses, released new data on how small- and medium-sized businesses feel about online customer reviews across platforms like Yelp, TripAdvisor, Facebook, Instagram, Google and more. For the ...

Thumbnail-Photo: Customer Story: How the Johan Cruijff Arena scores with self-service...
31.05.2019   #self service #artificial intelligence

Customer Story: How the Johan Cruijff Arena scores with self-service

CCV helped develop a smart self-service soft drinks dispenser.

Johan Cruijff ArenA, previously known as Amsterdam ArenA, has a capacity of 55,000. As the largest stadium in the Netherlands, it has hosted global sporting events such as the 1998 Champions League Final and the 2013 Europa League Final. The ArenA ...

Thumbnail-Photo: Leveraging the smartphone – mobile shopping...
13.06.2019   #mobile shopping #mobile couponing

Leveraging the smartphone – mobile shopping

67 percent of consumers are likely to shop with a retailer that offers mobile coupons

The proliferation and convenience of mobile devices has completely changed shopping behaviors and elevated customer expectations.Mobile shopping will continue to grow as 41 percent of consumers in the BRP Consumer Study indicate they plan to ...

Thumbnail-Photo: British consumer behavior: ethical and Instagrammable...
06.08.2019   #marketing research #customer analysis

British consumer behavior: ethical and Instagrammable

Report tracking spending across major consumer markets

As Brexit rumbles on, British consumers continue to spend on brands and businesses that successfully tap into the Holy Trinity of current consumer behavior: the ‘experience economy’, the booming health and wellness movement, and the ...

Supplier

CCV Deutschland GmbH
CCV Deutschland GmbH
Gewerbering 1
84072 Au i.d.Hallertau
POS TUNING Udo Voßhenrich GmbH & Co KG
POS TUNING Udo Voßhenrich GmbH & Co KG
Am Zubringer 8
32107 Bad Salzuflen
iXtenso - Magazin für den Einzelhandel
iXtenso - Magazin für den Einzelhandel
Celsiusstraße 43
53125 Bonn
HappyOrNot
HappyOrNot
Innere Kanalstraße 15
50823 Köln