\ Executive Summary Insights into How Online Reviews Affect Purchase Decisions QUESTIONS WE ADDRESS With nearly 95% of shoppers reading online In this research, we set out to answer • What is the upside impact of online reviews reviews before making a purchase, reviews two main questions: on sales? What’s the downside impact? have transformed the way consumers make purchase decisions.* But reviews are more • Do online reviews affect sales? • Are higher ratings always better predictors than just a way for shoppers to gather of increases in sales? information. Reviews are a powerful form of • If so, in what ways, by how much, consumer engagement. and under what circumstances? • Does familiarity with the product category Northwestern University’s Spiegel Research We have found that online reviews have alter the influence of reviews? Center has been at the forefront of answering a significant and quantifiable impact on questions about how consumers engage with purchase decisions – but the degree of that • Is there an optimal number of reviews? brands and how that engagement shapes impact depends on a number of factors, customer value since 2011. such as star ratings, the nature of the review If so, how many? content, the number of reviews, the price As part of Spiegel’s ongoing, multi-faceted of the item, and the source of the review. • Should brands prompt purchasers exploration of consumer engagement, These findings have powerful implications to submit reviews? we have spearheaded research into the for retailers and their suppliers as they financial impact of consumer engagement think about how to collect, manage, and via online reviews. promote online reviews of their products • Do reviews from verified buyers have and services. greater impact on sales than those from anonymous sources? In this report, we examine Spiegel’s groundbreaking research and provide recommendations for how retailers can use online reviews to drive increased *PowerReviews Internal Data customer value. 2 \ How Online Reviews Influence Sales \ spiegel.medill.northwestern.edu