Study: user-generated reviews are driving product sales

Deloitte & Touche says companies must learn to capitalize on the growing trend

By Heather Havenstein

October 1, 2007 12:00 PM ET

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Computerworld - The rapidly increasing number of user-generated product reviews is having a considerable impact on consumer buying decisions, according to a study released today by Deloitte & Touche USA.

In the study, completed last month by Deloitte's Consumer Products Group, almost two-thirds (62%) of the respondents to an online poll said they now read online product reviews written by other consumers. More than eight in 10 (82%) of those who read reviews said that their purchasing decisions have been directly influenced by those reviews. People have used the reviews both to confirm initial buying decisions and to change them, the study found.

While the percentages were slightly higher for younger shoppers, all age groups are reading and acting on online reviews, according to Deloitte. In addition, 69% of the respondents said they have shared online reviews with friends, family or colleagues, the report said.

"This increasing market transparency can adversely impact the margins, market share and brand equity of consumer products companies," said Pat Conroy, vice chairman and U.S. consumer products group leader at Deloitte, in a statement. "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."

Therefore, consumer product companies need to determine how best to capitalize in this new landscape, he added.

In addition to online reviews, the study found that shoppers also use the Web to gain insight into other factors about products and companies. "Information about products, pricing, ingredients and sourcing, as well as corporate practices around labor, environment, health care and other issues is now instantaneously available to potential customers -- and, increasingly, consumers are making decisions based on this information," Conroy added.

The survey of 3,331 consumers age 17 and older was conducted online between Aug. 28 and Sept. 6, 2007. The margin of error is plus or minus two percentage points, Deloitte said.

Read more about internet business in Computerworld's Internet Business Knowledge Center.

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