Product Reviews – The Art And Science

While I am a huge fan of product reviews they have one inherent flaw – they are not designed for average products. Exceptionally good/bad ones get away because they inspire comment. As a result average products (which are in the majority) get left empty with obscure greetings like:


which, by the way, does more harm because research shows positive reviews significantly impact sales and so the lack of reviews should have a quasi opposite effect too.

so what’s the work around? well, first of all reviews only tell what a fraction of the buying audience feels about a product but more importantly reviews might not always be married to fact (like sales figures, return rates; you know, the really important stuff). so why is it no retailer is willing to show exactly how much of each SKU sells and how many pieces get returned. If i read a review which is negative but see that the product sells like crazy I might just overrule the verdict by potbelly1327. Isn’t it time retailers started reclaiming turf stolen by online reviewers?

Another article on product reviews: Reviews

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Online Retailing For Dummies

While online retailing is considered a highly complex science involving deep understanding of aspirational behavior in reality it’s a rather simple practice. In the online world simple ideas have mega-impact. An illustration:

Irrespective of the product category the equation ‘shipping charge > product price’ is always a losing proposition, so why does IKEA indulge in it?


The only instance where I can see this working is online narcotics trade.

The same rule applies for gift wrapping. For products where price of the product is less than the gift wrapping charge I’d like to see log files on what % of people actually go ahead with the option. Posted below is an example from

PetSmart product page

Observe the green sections of the image above. Posted below is the pop up about giftwrapping:

PetSmart GiftWrap page

Not everything about this checkout process is bad, adding the Hacker Safe logo right next to the ‘add to cart button’ is a great idea!

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Just Because YOU Care About Your Suggestion Box Doesn’t Mean Your Customers Do Too…

In the last 20 years I have had bad customer experiences no less than 1,200 times and yet I can’t remember one instance when I actually filled a feedback form.  So the store never really knew I was unhappy.

Fortunately, in the online world feedback feature comes standard.  When a customer is unhappy you don’t need to ask but observe how they navigate your virtual store and their emotions will flash on the screen for all to see.

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How To Convert A Liability Into An Asset

Panera Bread is one of the few coffee retailers that actually offer customers free Internet access and I can’t even tell you how much I feel endeared to the brand because of this. But I also know Panera is giving free Internet in hopes of getting me to buy more stuff (which, I don’t think I really do) so it’s quite natural for Panera to not like Internet users who buy one cup of coffee with free refills for $1.69 and then spend hours surfing the net.

According to 313,839 people use the Panera WIFI every month making it the 5,961st most popular site in the world (I wonder if the management team at Panera is aware of this!). The way I see it Panera is experiencing all the pains of providing a great service without any of the benefits. How do we use the service to dramatically enhance brand experience? Historically, coffee shops have been places where people of diverse backgrounds converged to discuss things so why doesn’t Panera allow it’s customers to discuss topics online? The WIFI login page could have a list of topics ranging from politics to dating where people could post messages and even chat with other Panera patrons all over the country. Sure, some people will misuse the service and sit around longer but I believe overall it will only enhance the Panera brand.

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What Can The iPhone Teach Retailers?

A LOT. Apple knows as much about the cell phone business as Nokia knows about the PC, yet only one of them is going to add $10 billion to top line revenue through their new shiny product.  So what’s the lesson for the rest of us?

The good news is that this illustrates (once again) that understanding consumer aspirations is the only real way to launch blockbuster products and so every retailer (once again) has an opportunity to do what Apple has done and it doesn’t matter if your space is furniture, apparel, footwear or home appliances. The bad news is that Apple has demonstrated (once again) that moving from zero to complete domination can be both quick and decisive so it’s not enough to just look at your 2nd, 3rd or even 7th top competitor because it could be a new entrant that radically alters your industry. Creating conversations with evangelists is often the most effective way to generate new ideas that really work. It’s easy to do this; companies like Coach literally send out emails to their most loyal customers and ask them if they like new designs, others like Under Armour spend a lot of time talking to athletes about how products feel and work on the field. It’s no surprise then that the revenue of Coach and UA have been growing at clip rates of 30% and 100% over the last few years.

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What Is The Next Channel Opportunity?

There has been a lively discussion on the true identity of the online shopper.  One of the most prevalent beliefs is that if all the potential shoppers were grouped they could be neatly divided into two groups, one that shopped online and one that didn’t (with little or no overlap).  I have a problem with this theory for two reasons: one is that it forces marketers to deploy two different strategies because the assumption is online shoppers have a different set of motivations.  The second reason I am in opposition to this dichotomized view is that it’s flat out wrong.

There is significant overlap between online and offline shoppers.  I’d go further and say that the ‘overlap’ is the fastest growing segment.  I’d go even further and describe this ‘overlapped’ demographic: I believe these customers first shop offline and then (gradually) migrate online.  This migration represents a significant strategic opportunity for retailers not only because it’s a more efficient channel but also because it is completely measurable.  Therefore, I would invest a big chunk of my budget toward facilitating this migration.  Defection at this stage is the most dangerous kind because it represents a permanent change in behavior.  Of all the metrics available to retailers the “% catalogers that transitioned online” and “% store shoppers that transitioned online” is the most important.

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What Heinz Discovered

Retail merchandising strategy is almost completely governed by the principle of price elasticity.  It follows that if price of a product is increased overall units sold drop and vice versa.  But this is not always the case.  Heinz discovered by increasing the size of ketchup bottles from 24oz to 36oz sales increased with no reduction in buying frequency.  Turns out consumption of ketchup follows its own convention.  Mothers buy ketchup for kids so when there’s less than 3/4th left they ask their kids to go slow and consumption rate falls.  With the 36oz bottle 3/4th is still a lot.  When consumption was viewed side by side it was discovered they got over at approximately the same time.  The replacement of 24oz with 36oz helped Heinz increase ketchup sales 13%.  Kaching.

Related article: Price Elasticity Parabola


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