Austin, TX, July 14, 2020 — More than half (62%) of U.S. companies selling online have been the victims of negative reviews and star ratings in the last year, and the cost of managing the online flack is rising.
The problem is now costing online brands an average of $150k a year to put right, a new study reveals.
In a poll of 1,000 decision makers (and 2,000 shoppers), 28% said poor reviews are getting worse and 4 in 10 (42%) business owners remain flummoxed by them, admitting they don’t know how to tackle the negative online reviews that they do receive.
More than three-quarters of business owners – 76% – said online reviews and star ratings are very important to their financial status and reputation, and a third agreed that a single 1-star negative post could severely damage their business.
The research was undertaken by Brightpearl, a retail operations platform, which also found that 71% of shoppers respondents regularly check star ratings for online retailers before buying from them, and two in five consumers have been put off a brand or a retailer they might have shopped with – by a single unfavourable review.
U.S. online brands are now spending significant sums of money each year responding to and managing negative reviews – on average $150k is spent yearly by US online firms, whether through in-house social media managers, reputational agencies, or on promoting positive endorsements.
The study also reveals that just 23% of brands always respond to negative reviews – despite the majority of shoppers (58%) looking more favourably upon retailers who actively respond to negative reviews posted about their services online.
“Reviews, whether they are positive or negative, can make a huge difference to the choices consumers make when it comes to selecting a brand or retailer,” said Nick Shaw, Chief Revenue Officer for Brightpearl. “It’s absolutely right that consumers should have a moan when they receive sub-par service – and brands need to start paying closer attention.”
Brightpearl researchers also found that shoppers become highly dubious about shopping with any brand that has more than five negative reviews in a six month period.
“Retailers are increasingly aware of the wide-ranging financial and reputational impact a negative review can have on their business,” added Shaw, “But they need to understand where those problems are coming from – be that items not arriving on time or at all, a lack of delivery updates or cancelled purchases.
“Customers pay attention to middling and lower reviews, resulting in lost sales opportunities and potentially damaged reputation,” Shaw said. “Rather than spending hundreds of thousands of pounds a year to fix poor reviews after the fact, the best approach is to identify and fix the issues that can lead to unhappy shopping experiences in the first place – and those problems typically occur after the buy button.”
ENDS
About Brightpearl
Brightpearl is the number one digital operations platform (DOP) for the retail and wholesale sector. Built to manage the complexity of modern business, the scalable platform offers flexibility to respond to rapid changes in demand and smooth integration with other core operational systems within the organisation.
Brightpearl’s complete DOP solution includes financial management, inventory and sales order management, purchasing and supplier management, CRM, fulfillment, warehouse and logistics. In addition, the solution has high-performing connectors to the major ecommerce platforms, including Shopify, Magento and BigCommerce. Over 1,200 businesses in 26 countries use our platform. We manage over 10m transactions and $3bn of business a year.
Brightpearl is a flexible and agile solution that enables fast decision-making and insights. The platform is designed for retailers and wholesalers to manage the heart of their business easily from one single system. Brightpearl’s configurable automation workflows have measurable time and cost saving impact for our customers, allowing them to focus more resources on growing the business. Our team guides retail businesses through a highly efficient implementation process which typically gets them up and running in less than 60 days – twice as fast as our competitors.
Brightpearl’s US headquarters is in the heart of downtown Austin with a global headquarters in Bristol, UK. You can connect with us on Twitter (@BrightpearlHQ), LinkedIn (linkedin.com/company/Brightpearl), and Facebook (facebook.com/brightpearl).