UGC, CGC: the hot new buzz words both online and off: CGC brings five-star benefits

NEW YORK —In the ever-evolving world of online retailing, where the complexities of selling product via digital media is drawing a healthy share of innovative thinking and best practices, the market for consumer-generated content has never been hotter. Usually in the form of product reviews or customer-created Q&A, CGC is quickly evolving into a must-have tool for online retailers—and for good reason: No tool in a merchant’s arsenal is more effective in contributing to the conversion of sales than CGC.

Bazaarvoice, an Austin, Texas-based firm specializing in CGC, has found that online products supported with a high number of customer reviews experience higher increases in sales conversion and other key performance metrics than those without. Given this effectiveness, one might think all products sold online would be supported by CGC. The problem is that most retailers don’t generate their own content. Rather, their vendor partners supply it for them—an expense they are usually more than willing to incur, knowing they will likely reap the benefits at checkout.

“A well thought-out, user-generated channel marketing strategy can increase virtual ‘shelf space,’ consumer trust and conversion rates, and, most of all, it can help a manufacturer’s product stand out from its competition,” said Bazaarvoice ceo Sam Decker.

Decker cited Kingston, an independent memory manufacturer that syndicated customer reviews gathered on its site to OfficeDepot.com . The company saw an increase in average review volume from one review per product to 10, as well as a 92% increase in overall conversion for all Kingston products sold on the site.

Customer reviews also can influence intent to buy, a metric Decker says is especially important for retailers and manufacturers that don’t sell directly on their sites. Recent analysis by Bazaarvoice of Cars.com and a consumer products brand revealed that items with reviews drove behaviors that implied intent to buy, such as searching for a specific purchase location or looking for financing options.

Similarly, community Q&A enables consumers to ask and answer questions about products or categories within the purchase path of a Web site. Auto parts retailer JCWhitney added the function to its site, where question topics range from technical specifications to opinions about one brand or product versus another. Such Q&A helps set realistic expectations for consumers and has lowered product return rates for JCWhitney. The company found that for products with more than 20 questions and answers, 80% showed a reduction in product return rates, with an average 23% decrease in product return rates.

Retailers with this functionality do well to get manufacturers involved to help answer product-specific questions. Manufacturers can provide trustworthy, complete information about specifications, giving consumers the best source of information on such issues. Multiple requests or questions can indicate a need for a product modification or add-on, which can drive new revenue opportunities.

One key to JCWhitney’s success is that it actively engages with its vendors, having recently invited 200 top suppliers to its headquarters to introduce them to UGC opportunities. Suppliers were shown how to answer JCWhitney customer-generated questions and were introduced to the opportunity to host user-generated Q&A on their own Web sites for syndication into JCWhitney.com .

The real proof of the effectiveness of UGC is that it has been shown to work in brick-and-mortar retail space, too. Retailers are starting to use five-star ratings on merchandise tags and in-store signage. Authentic customer reviews, it turns out, make trustworthy, compelling promotional copy, regardless of the selling medium.

To contact Bazaarvoice ceo Sam Decker to find out more about CGC, send an email to [email protected].