February 15, 2006
Case Study

Top 5 Lessons Learned When PETCO Added Online Shopper Reviews

SUMMARY: If you've ever debated giving online shoppers the power to add reviews to your site, this Case Study will answer many of your questions. Includes tips on how to get shoppers to post enough reviews so you don't look lame; whether you should fear negative reviews; and good ways to use reviews to improve conversions.
Fear mixed with temptation. Although PETCO wanted to add customer reviews to product descriptions on its ecommerce site, the Web team was also a bit wary. "We've always avoided it because of the huge human workload," says John Lazarchic, VP Ecommerce. 

Not to mention other worries such as:

o How do you get enough customers to add reviews to achieve critical mass (and not look lame)?

o What if people post highly negative reviews and it hurts your sales, not to mention supplier relationships?

o What if people post spam and slime instead of relevant review content?

As countless bloggers and major online newspapers such as LATimes.com have discovered, truly opening your doors to the public is as scary as a high schooler throwing their first party when their parents are out of town. What if nobody comes? What if the bad kids show up and trash the place?

In October 2005, just as the new holiday season sales started ramping up, PETCO's Web team gave in to temptation and launched the cleverly-named "five-paw" customer review system.

Shoppers could review every product on the site, based on a scale of one to five "paws." However, to allay some concerns, Lazarchic made sure he could turn off reviews on a product-by-product basis if a particular manufacturer requested it.

At launch, the only places the reviews were mentioned on the site were on product detail pages, where text links said, "Click here to review this item."

When the reviews went live, PETCO immediately saw a few visitors a day writing them. However, says Lazarchic, "the reviews are great, but you can't do much with them until you have this critical mass." Using the customer reviews for marketing doesn't make sense until enough of the products have a review.

So, the team tested tactics to get the critical mass (deemed to be 500 reviews site-wide, equaling about 15% of the products reviewed), as quickly as possible.

Test #1. Add splash page off home page -- Lazarchic's team launched a promotional page that linked off the home page, to spark interest. The home page sported a "five paws" icon at the right that told visitors there was now the opportunity to review products. When visitors clicked through, they saw a splash page showing how to fill out a review.

Test #2. Contest -- One randomly selected shopper per day who wrote a review (limited to five per person so nobody would have an unfair advantage) would receive a $100 PETCO gift card.

After the site had generated enough reviews so customers could easily find a product that had one, the team's next task was to use this new content to help with conversions. They added:

--Top product icon

Any product that received an average of a four or five on the five-paw scale received an icon that showed the product is top-rated. The icon showed up next to items on search results pages and on product listing pages. "It's just to let customers know that these are the items that other pet owners find useful," says Lazarchic.

--Top product category

Under major category headings -- cat, dog, bird, etc. -- are subcategories, such as food, toys, or treats. Lazarchic's team added a new category titled "Top-Rated Products" under each of those categories. The Top-Rated Products category is listed first in the subcategory listings.

--Online specials

On the pet category pages (dog, cat, bird), there is an area that showcases featured products and online specials. Under online specials, a promotion box says: "Top Rated Products All On Sale! We've gathered our highest rated dog products to make your shopping easier. Save 10% now."

Within 100 days of launching the program, PETCO gathered more than 1,000 reviews and now has 896 five-star-rated products to brag about. However, the program required that $100 gift card contest to really take off. The splash page marketing tactic only resulted in about 10 more reviews per day, while the contest generated about 100 reviews per day.

While the clickthrough rate from a category page to the Top-Rated Products subcategory page is average, Top-Rated products convert slightly higher than average. "Now, is it truly the top-rated category that's giving it a higher conversion rate, or is it simply because they're superior products?" Lazarchic muses. "We don't know, but either way, it's an easy way for consumers to identify top products."

That link has the highest conversion rate on the pet category pages, about double the next highest converting link. However, it has a lower clickthrough than the normal left-hand navigation bar.

Five more lessons that PETCO learned from the reviews launch.

Lesson #1. AOV increases

So far, average order value for shoppers who purchase after looking at a review is running about 6% higher than customers who do not look at a review. "And, if it holds true as the number of reviews expand, that becomes more valuable," says Lazarchic.

Lesson #2. Negativity not a concern

"One of our big concerns was negative reviews. We thought people would use this as a forum to bash items, and we wondered how we'd deal with vendors," says Lazarchic. That hasn't happened.

While some reviews are negative, they haven't become a problem, and 95% of reviews get rated four paws or above. Negative reviews are posted as long as they're not too subjective. For example, if a reviewer writes, "This product made my dog sick," that may or may not be the case. "Was it really the product?" Lazarchic asks.

While a review like that won't be posted, it is forwarded to customer service, which then contacts the customer. If a reviewer simply isn't happy with a product, it is posted, and is also forwarded to the manufacturers and buyers, giving them the opportunity to address any problems.

"We're happy with how customers are using this as a way to talk positively, which is interesting because people tend to like to talk about bad news more than good news."

Lesson #3. Reviews become community

In other categories, Lazarchic notes, after a product gets a certain number of reviews, people stop reviewing it. With pet owners, that doesn't happen. One person reviews a product, telling a story about how much their pet loved it, so the next pet owner wants to write his own story about his pet and how that pet uses the product.

"It's almost like a community forum. They tell their story because it's cuter than the one before it."

Lesson #4. Feedback tool

A fair number of reviews that come in aren't actually reviews. "They're just asking questions, using it as a forum to contact us," Lazarchic notes.

That's interesting to him, because users can't review anonymously; they have to log-in. People go to the trouble of logging in to contact PETCO, when it's much easier to send an email. That shows Lazarchic that perhaps the contact link is difficult to find. "We might want to add an email link on every product page or find another easier way for them to contact us."

Lesson #5. Honesty

Before the site reached a critical mass of reviews, there were "some people around who said, 'You should probably just go in and start reviewing products.'" Lazarchic wouldn't do it. "We wanted to be entirely on the up and up."

Next, Lazarchic is currently testing email to see if using top-rated icons in the email and subject line increase conversions. He is also considering testing product detail pages to both show and not show reviews to see if the reviews are really affecting conversions and to help decide how to move forward using reviews in the future.

Useful links related to this article:

Creative samples from PETCO's reviews:

BazaarVoice, the vendor PETCO uses for online customer reviews: http://bazaarvoice.com/index.html

Offermatica, the testing and optimization company PETCO uses: http://offermatica.com/

PETCO: http://www.petco.com

Note: PETCO is a member of Shop.org, a forum for retailing online executives to share information, lessons-learned, new perspectives, insights and intelligence. More info at http://www.shop.org

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