Monday, October 8, 2007

Consumers Are Turning To Online Reviews In Large Numbers

Enabled by new information technologies, consumers have real-time access to information, insight and analysis, giving them an unprecedented arsenal to help make purchase decisions. At the same time, these technologies provide a voice and a venue for anyone with something to say, allowing individuals to shape reputations of consumer companies and their products, according to a new Deloitte study.

To build their knowledge arsenals, consumers are turning to online reviews in large numbers – and those reviews are having a considerable impact on purchase decisions. According to a recent survey by Deloitte’s Consumer Products group, almost two-thirds (62 percent) of consumers read consumer-written product reviews on the Internet. Of these, more than eight in 10 (82 percent) say their purchase decisions have been directly influenced by the reviews, either influencing them to buy a different product than the one they had originally been thinking about purchasing or confirming the original purchase intention. Interestingly, while the percentages were slightly higher for the younger generations, all age groups are reading and acting on online reviews at significant rates. 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.

While the survey found that reputation and word of mouth – both factors that are greatly influenced by online reviews – are the key factors that influence consumers’ decisions to purchase a new product or brand, many other factors also play a significant role. “Better for you” ingredients or components, eco-friendly usage, and sourcing were each cited by approximately four in 10 consumers as important factors in making purchase decisions, while eco-friendly production and/or packaging was cited by more than one-third (35 percent).

Recent recalls of imported products are also contributing to this trend: one-third of survey respondents (33 percent) said that, as a result of recent recalls, they now look for more information on the packaging/product and almost one in five (18 percent) said they now look for more information on the Internet or in other locations.

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