NetShops Case Study
Overview
The University of Nebraska at Omaha conducted an empirical study on the effects of tag-based customer reviews on NetShops product sales. In addition, NetShops analyzed the conversion effects of using "Top-Rated Products" merchandising pages on their websites, and computed the "Total Cost of Ownership" of setting up and using the PowerReviews reviews solution. The findings to each are presented in this Case Study.
Summary
NetShops is an operator of 156 specialty online stores in the home and lifestyle space. NetShops began using tag-based customer reviews from PowerReviews in November 2006. By May 2007, NetShops had collected 19,500 reviews on its websites, averaging three reviews per product reviewed. The University of Nebraska at Omaha worked with NetShops to conduct an empirical study on the effect of customer reviews on product sales and analyzed sales changes in 546 product categories from May 2006 to May 2007.
One of the key results of the UNOmaha study is that customer reviews had a statistically significant effect on increasing sales at NetShops, driving a 36% increase in sales of product with reviews over this period, with a 95% confidence level. NetShops normalized the affects of increasing marketing spend and website enhancements on the sales uplift and determined that the direct affect of PowerReviews customer reviews was a 26% uplift in sales of products with reviews. The UNOmaha study found that a primary driver of uplift was the number of reviews per product, which NetShops attributes to increased trust and confidence in the minds of shoppers.
In addition to the UNOmaha study, NetShops also found that there was an average 171% conversion rate uplift for those shoppers who visited the “Top-Rated Products” merchandising section on over 20 product categories versus those who did not.