Wednesday, July 11, 2007
MILLBRAE, Calif., Jul. 11, 2007 (Business Wire) -- PowerReviews(TM) (www.PowerReviews.com), a leading provider of customer review services and social merchandising solutions for online retailers, announced today the results of an in-depth study on the effects of PowerReviews' tag-based customer reviews on NetShops' product sales by the University of Nebraska at Omaha College of Information Science and Technology. The study was designed to measure the causal effect of reviews on product sales, instead of correlation effects that are the basis of most industry studies, which often overstate the results. The study found that PowerReviews' customer reviews drove a 36% increase in product sales from May 2006 to May 2007 (on products that had reviews, introduced in November 2006). Further analysis by the Merchandising Department of NetShops determined that 10 points of this increase could be attributed to increases in marketing spend and improvements to the website over the same period, thereby concluding that PowerReviews customer reviews directly caused a net 26% increase in product sales.
'Customer reviews make our customers more confident in buying from us,' says Jay Gordman, Director of Merchandising at NetShops. 'And PowerReviews' tag-based reviews makes it easier to get to the right choice for each customer than traditional reviews - they are easier to scan, and at the same time, more informative. The resulting increase in sales has already dramatically affected our business, and we plan to take full advantage of PowerReviews unique tag-based capabilities going forward.'
In addition to the University of Nebraska study, NetShops analyzed the Total Cost of Ownership ('TCO') of implementing and maintaining the PowerReviews review solution and found the cost per review, based on TCO, to be $0.54.
Details of the University of Nebraska study along with the assessment of Total Cost of Ownership are available in a White Paper which can be downloaded at www.PowerReviews.com/ROI.
PowerReviews provides a fully-managed customer review solution that offers online retailers, such as NetShops, best-in-class product reviews with minimal effort. PowerReviews utilizes its patent-pending 'tag-based' approach to offer at-a-glance Review Snapshots(TM) that make it faster and easier for shoppers to reach a confident purchase decision. Utilizing these unique features, consumers preferred PowerReviews 2-to-1 over Amazon reviews for making informed purchase decisions in research conducted by Keynote Systems in Oct. 2006.
About NetShops(TM)
Headquartered in Omaha, Neb., NetShops currently owns and operates over 150 online specialty stores, including hammocks.com, binoculars.com and barstools.com. NetShops was named the 13th fastest growing company in America by Inc. magazine in 2006 and has served over 1 million satisfied customers. NetShops, Inc. was recently ranked #104 on Internet Retailer magazine's Top 500 guide of the largest retail Web sites in the country.
About the Study
Deepak Khazanchi, Associate Dean, and Alanah Davis from the College of Information Science and Technology (IS&T) at the University of Nebraska at Omaha conducted the study referred to above. Khazanchi and Davis worked with Jay Gordman, the Director of Merchandising at NetShops, to access the necessary sales and review data to complete the study. The study was conducted over a four month period, analyzing product sales (units) of 546 products from January 2006 to January 2007 (after 2003 reviews had been collected). In June 2007, they updated their analysis with additional data from May 2006 to May 2007 (after a total of 19,500 reviews had been collected), which is presented in this case study.
About PowerReviews(TM)
PowerReviews is an enterprise solutions company that provides customer reviews and social merchandising solutions to multi-channel retailers, driving higher conversion and increased purchase satisfaction. PowerReviews' patent-pending PowerTags(TM) technology captures customer opinions in their own words, making reviews more useful for shoppers, empowering them to make more informed and confident purchase decisions. Its customers include Ritz Camera, The Sports Authority, Abt Electronics, Smart Bargains, Mountain Gear, Journeys and over 100 more. With the introduction of Buzzillions.com, the company has entered the consumer portal market, leveraging its tag-based technology to introduce social navigation and affinity recommendations into the shopping research process for consumers. Based in Millbrae, California, PowerReviews is a privately held company with funding from leading venture capital firms Menlo Ventures and Draper Richards. For more information on the company, visit www.PowerReviews.com. To experience the full benefits of PowerReviews' social merchandising solutions, visit www.Buzzillions.com.
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