Online retailers are increasingly tapping into user-generated content (UGC) as a way of increasing sales and improving customer satisfaction, according to research published this week.

A survey conducted by online research publisher E-consultancy and Bazaarvoice, a provider of hosted social commerce applications, found that more than half of all online sellers (51%) consider UGC as either extremely important or very important to company strategy over the next year.

The research also found that site content improvement is a key area of digital marketing investment for online sellers, with 76% saying that this was a high priority.

Customer ratings and reviews are being used by 28% of online sellers, with more than half (52%) saying that they were considering the use of this feature on their websites.

The Social Commerce Report 2007 is based on the findings of a survey of more than 800 online marketers, including 360 online sellers, carried out in June and July 2007. The majority of online seller respondents were in the retail, travel, financial services, and publishing sectors.

Put simply, social commerce is about customers having the means to interact with one another and make better buying decisions. It is also something which companies can tap into for their own benefit.

The most widely perceived benefit of ratings and reviews among online sellers is an improvement in site conversion rates, viewed as a major benefit by 79% of responding organisations.

Improved customer retention and loyalty, and better search engine optimisation, are also viewed as a major benefit, by 73% and 59% of online sellers respectively.

The overwhelming majority of survey respondents (97%) said that they found ratings and reviews either extremely helpful or very helpful “as consumers”.

Sam Decker, chief marketing officer at Bazaarvoice, said: “The fact that more than half of retailers believe the customer voice to be integral to their sales and customer service strategies shows that ratings and reviews will have a big part to play in the growth of online retail in the UK. We expect that the reliance on reviews will grow as more retailers adopt this feature.”

The research also found that the environment for online sellers over the last 12 months has been a very positive one, with half of online sellers (50%) saying they expect growth of 20% or more in the next year.

Linus Gregoriadis, E-consultancy’s Head of Research, said: “The research shows that it’s a very healthy environment for e-commerce but increased competition in the marketplace means that companies need to work harder to maintain strong growth.

“Tapping into social commerce can be a great way of gaining a competitive advantage, for example through ratings and reviews. But apart from the early adopters, this is something a large proportion of online retailers are only just starting to think seriously about.”

Gregoriadis added: “A third of online sellers said that concern over negative reviews was a major barrier to adoption of ratings and reviews but retailers are finding that they can improve conversion rates, drive sales and increase customer satisfaction even if customers aren’t necessarily singing their praises all the time.”

Online sellers were asked to rank their top priorities for investment in terms of whether they were high, medium or low priority.

The following shows the percentage of online sellers rating each area as ‘high priority’:

Site Content Improvement / Optimisation: (76%)
Natural Search (SEO): (71%)
Email Marketing: (54%)
Paid Search: (45%)
Cart / Checkout Improvements: (39%)

The full E-consultancy / Bazaarvoice Social Commerce Report 2007 is available for download at:

Journalists and bloggers can email or call Linus Gregoriadis for a complimentary copy of the report and / or further information.
Tel: + 44 (0) 207 681 4051 or + 44 (0) 7956 5645713.

About Bazaarvoice
Bazaarvoice offers outsourced technology, analytics and expertise to help brands enhance the online shopping experience with social commerce applications that drive sales.
Launched by web analytics pioneer and Coremetrics founder Brett Hurt in the US in 2005, Bazaarvoice’s stable of clients include over 100 online retailers and manufacturers, including Hewlett Packard, Dell, Early Learning Centre and
Bazaarvoice Ratings & Reviews and Ask & Answer products help brands to maximize the impact of user-generated review content through customisation, deep integration, community management, advanced analytics, search engine optimisation and syndication across the Web.
Bazaarvoice’s services empower consumers to share honest opinions and influence each other to make more informed and rewarding purchase decisions. Bazaarvoice was named Marketing Innovation of the Year in the 2006 US ClickZ Marketing Excellence Awards and received a “Red Herring 100 North America” award from Red Herring magazine.
For further information about Bazaarvoice, please contact Claire Armitt at flannel on 020 7754 5507.

About E-consultancy
E-consultancy is an online publisher of best practice internet marketing reports, research and how-to guides. E-consultancy, named Publisher of the Year at the 2006 AOP Awards, also publishes buyer’s guides and has a directory of 100,000+ third party internet marketing white papers.
Subscribers pay from £149 per year to access the exclusive and highly practical content. E-consultancy has more than 100 events lined up for 2007, including roundtables and monthly Supplier Showcases. The company also provides a range of public and in-house training programmes, such as seminars and workshops.

Published on: 12:00AM on 2nd August 2007