Online consumer-written reviews are huge

Would you have guessed that 51.8 per cent of seniors aged 61 - 74 years reads online consumer-written reviews and that 97.8 percent of them, just like all other age groups apart from the over 74 year olds, rated consumer reviews as credible? I wouldn't. And among younger age groups the use of consumer-written reviews are even higher, topping at 68.4% among 22 - 29 year olds.

A new study in the US by Deloitte & Touche shows this massive use — and support for — consumer-written reviews. It also shows that those reviews are having a considerable impact on purchase decisions. In addition, the reach of consumer reviews isn’t limited to the online world; seven in 10 (69 percent) consumers who read reviews share them with friends, family or colleagues, thus amplifying their impact.

"This increasing market transparency can adversely impact the margins, market share and brand equity of consumer products companies,” says Pat Conroy, vice chairman and US consumer products group leader at Deloitte & Touche USA LLP. “In the past, clever marketers and advertisers shaped brands, but now consumers are increasingly empowered, everyone has a voice, and information and opinions are instantly dispersed. Consumer product companies need to determine how best to capitalize on this new landscape. Clearly, there will be consequences for those who don’t.”

Reputation and word of mouth are the most important factors for purchase decisions, but naturally a host of other aspects also influence a purchase, like features, price, eco-friendliness and ethics.

I dare to say that here in Sweden, like in many other countries, few companies monitor forums, blogs and review sites. And even fewer actively tries to communicate, influence and create relationships with influential netizens, or find ways to directly connect and interact with consumers. I think it's pretty clear that consumers are far ahead of companies today. The question is how fast companies will react.

"In order to successfully compete, it’s imperative for consumer brands to build and maintain their images, create differentiation, and enhance loyalty. For example, consumer product companies with exemplary supply chains can achieve differentiation by making their processes more transparent. And co-opting customers to create value with the company can create not only loyal customers, but also brand emissaries", says Conroy.