How to Use Product Reviews to Optimize Merchandising Strategies and Increase Profits

We know that product reviews are vital for boosting online retail sales. How vital?

According to Trustpilot, nine out of ten customers consult reviews before purchasing a product. In comparison, a Review Trackers study found that as many as 94% of customers avoid buying products from brands with negative reviews.

However, product reviews don’t just boost trust and increase sales. They also play a significant role in merchandising strategies for online retailers. Or at least they should!

In other words: a well-optimized merchandising strategy takes product reviews into account. How? 

This post discusses how you and your merchandising teams can do just that.

We will also take a closer look at how product reviews and ratings play a role in conversion success across various channels.

Let’s jump in.

Benefits of Using Customer Reviews to Boost Merchandising Strategies

When you consider that 79% of shoppers trust online reviews as much as personal recommendations, it should come as no surprise that customer feedback is essential to your overall shopping experience. This, in turn, drives online merchandising strategies.

Let's take a closer look at the top three ways customer reviews drive merchandising.

Customer Reviews Boost Social Proof

Customer reviews and ratings are the very core of eCommerce social proof. They are often the only social proof that a new potential customer needs to buy a product — turning “interested” into final purchase decision-making.

This is because they are seen as an unbiased recommendation, which can be more powerful than visual merchandising elements such as product page descriptions and images. Lush Cosmetics are experts at doing just this across their entire online store.

‍

And when you combine social-proof conversion power with merchandising strategies such as fine-tuning product collections and sorting-by-review parameters, online retailers can increase their conversion rates by up to 15%.

Customer Reviews Boost SEO

Another substantial payoff of product reviews and ratings is organic traffic. Why? Because Google takes reviews into consideration when ranking your store. Therefore, the more positive reviews you have, the higher your store and/or product pages will rank for designated keywords.

Additionally, search engines reward fresh content and add new reviews to your store, and product pages regularly keep your site fresh in the eyes of Google or Bing.

But it doesn’t stop there. Having an abundance of positive reviews can:

• Decrease your store’s bounce rates, which in turn improves rankings
• Boost social media engagement and sharing, which boosts social appearance and authority
• Increase traffic
• Add authentic content to your store in the form of UGC (User Generated Content), which in turn is rewarded by search engines
• Increase your Google Search Ad CTRs, which in turn boosts digital ad conversion
• Help you naturally generate keyword phrases and long-tail keywords

More than that, SEO also helps merchandising. How? By providing merchandisers with actionable data that they can use to fine-tune product collections or sorting, as well as other merchandising strategy decisions.

Do Negative Reviews Affect SEO?

The short answer is: Yes. However, this is only true if you’re getting mostly bad reviews. We know that we can’t please everyone, and so does Google. If you start getting more negative product reviews, you run the risk of decreasing credibility with Google and, of course, your customers. However, by responding to reviews, good or bad, you can help counteract the negative effect of negative reviews in general.

Here is an example of a good reply to a two-star rating:

[Source: Shogun]

Customer Reviews Reduce Online Shopping Experience Friction

While well-placed online reviews help confirm authority to new shoppers, they are also used to influence purchasing decisions on category collections or product pages further along on the shopping journey.

However, their influence starts even earlier than that. When reviews are used strategically to fine-tune product sorting, you improve your customers’ shopping experience even more.

How? You are strategically placing high-rated products for which your potential customers will have more buying intent in both on-site and off-site collections. This, of course, drives conversions.

‍

Top Review-Based Merchandising Strategies

Now let’s look at the top ways that eCommerce brands can use product reviews to optimize merchandising strategies.

1. Boosting Conversion Chances from Category and Collection Pages

The most important way you can use product reviews to optimize your merchandising strategy is by using ratings to fine-tune your collection and/or category product sorting.

We know from our advanced merchandising post that the best way to structure your merchandising strategy is to take multiple parameters that consider marketing and retail KPIs. This should definitely include product ratings and the number of product reviews.

Why? In a nutshell: Increased sales and conversion rates.

By integrating high-rated products into retail product sorting, you push products with the highest rating to the top of pages while also fulfilling important retail KPIs. Pushing high-rated products to the top of category pages, and keeping low-reviewed ones to the bottom, improves conversion rates.

Note: You also want to consider the number of reviews. A product with only 1-2 five stars reviews is not the same as a product with 100 five stars reviews.

2. Driving eCommerce Ads Conversions and ROAS

Next, you want to apply the above strategy for digital ad product collections, as well as to boost ROAS. This is not just about displaying average reviews in marketing (PPC) to entice new shoppers. It’s about using multi-parameter product-sorting to create product groupings (for ads) that are more likely to convert.

This means filtering your product feeds for Google Shopping and Facebook dynamic ads so that your best reviewed products take priority. Resources like this Hyros Review can help in this area. This way, when a potential customer clicks through to see your product reviews, you have a better chance of converting.

3. Streamlining Shopping Experience with Rating Filters

According to Statista, 91.3% of shoppers read at least one review before making a purchasing decision, and 31% of shoppers admit to reading 4–6 reviews. This means that by strategically placing reviews at each shopping touchpoint, you can push potential customers toward checkout.

One of the critical stages to conversion is product search and category. We saw earlier in the post that you can optimize your categories and collections in a way that takes reviews and ratings into account. However, that’s not enough if you want to cover all bases in the shopping experience.

You also want to allow shoppers to sort by ratings when filtering their searches. Why? Because by allowing shoppers to search and filter product categories according to reviews and ratings, you help build trust more quickly with new shoppers.

4. Using Reviews for Omnichannel Trust and Authority

By strategically showing reviews throughout the shopping journey, as outlined above, you don’t just make it easier for shoppers to make their buying decisions. You also build a solid foundation of brand trust and authority, which is vital for customer retention and longer-term growth.

And when you combine that with merchandising strategies and product displays across all channels, that’s when the magic happens.

Here are some ways to use reviews with online visual merchandising retail:

1. Add top-rated and most reviewed product pages to product listing pages
2. Use UGC to build product trust on social media and stores
3. Display and use verified reviews and ratings on all platforms and channels
4. Reply to bad/negative reviews to further boost trust

Bonus: Three Review Collection Hacks

Now that we know that product reviews don’t just boost sales but also help you optimize your merchandising strategies, which increases profits, let’s talk collection. According to Search Engine Land, 70% of shoppers will leave a review if a store asks them to.

So how do you ask them to? By automating, incentivizing, and building a shopping experience designed toward growing loyal customers.

Here are three of the top review collection hacks:

1. Just ask. For every completed sale, include a review link in your last automated email.
2. Automate everything you can. As your retail store grows, review collection will be impossible without using AI-powered collections and management tools.
3. Incentivize your shoppers with referral programs. Reward and loyalty programs are great drivers for online reviews. From a discount for a social write-up to a review request as part of a loyalty signup, the possibilities are endless.

Final Thoughts: Use Reviews to Make Smart Marketing and Merchandising Decisions

There you have it: comprehensive proof that using product reviews to optimize merchandising strategies.

Product reviews and ratings are a must in a multi-parameter product sorting and category-building strategy, merging retail logistic KPIs and marketing goals to sell more of the right products to boost profits. It’s even better if you can combine these collections with marketing and shopping campaigns.

Have more advanced merchandising questions? Our eCommerce merchandising experts are standing by. You can contact them here.

‍