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A very interesting article from WSJ. Thoughts?
Original here.
More than a decade after book and electronics retailers embraced online customer reviews, the most elite stores in the U.S. are opening their websites—and the brands they sell—to the slings and arrows of public opinion.
At the end of the month, Saks.com, the online arm of Saks Fifth Avenue, will unveil a five-star review system where customers can express their opinions on products ranging from $1,700 Jimmy Choo bags to $7 Kiehl's lip balm. Macy's Inc.'s Bloomingdale's division and Neiman Marcus added their own versions of reviews recently, following the lead of Nordstrom, which began offering them last fall.
The changes are being driven by the need to beef up online sales, and a realization among luxury retailers that customers want the ability to take shopping advice from their peers.
"The customer wants a more objective voice saying, 'I own this, and these are the things you need to know about it,"' said Denise Incandela, president of Saks Inc.'s Saks Direct, who expects the feature to lower the company's returns rate and increase "conversion," the percentage of browsers who actually buy.
For fashion houses accustomed to dictating their own vision to consumers, reviews are generating mixed reviews.
Designer Carmen Marc Valvo says "a dress is not an electronic device like an iPad that is...suitable for a consumer-reports style rating. Style is a very subjective matter."
When Bud Konheim, chief executive of the brand Nicole Miller, first saw a 3-star review of a $465 dress on Nordstrom.com that criticized the dress for being "hot and uncomfortable," he was furious. "At first, I thought, 'Let's go find and kill that woman,"' he said. But as he thought about what the customer was saying, he had a change of heart. The commentator "was tapping into something we are well aware of: Our clothes do not fit everybody universally."
The clashes are a result of the luxury business's late appearance at the e-commerce party, one area that continues to see fast growth in a still-sluggish retail industry. While the National Retail Federation expects retail sales to grow by 2.3% this holiday season, nearly two-thirds of retailers are expecting online holiday sales to rise by at least 15%, according to a new study by the NRF.
Product reviews have been shown in surveys to boost loyalty and sales with online customers who can't see or touch the merchandise. According to the E-tailing Group, 71% of online shoppers said their choices are most influenced by customer reviews, followed by discussion forums. Retailers also have discovered that reviews tend to be overwhelmingly positive, averaging 4.3 out of 5, according to Bazaarvoice Inc., which provides review software for 1,000 retailers, including Saks and Nordstrom.
"We have proven that it is safe," said Brett Hurt, chief executive of BazaarVoice, which now counts 25 luxury brands among its clients, compared with just one a year ago.
Such findings are sinking in only slowly. High-end retailing, known for product innovation and customer service, has ironically been the last to adopt technologies that are de rigeur elsewhere in the retail world. Designer label Marc Jacobs just added e-commerce to its site last month. Chanel doesn't sell anything but cosmetics on Chanel.com.
Luxury brands have long regarded reviews and other social shopping features with trepidation. Midtier department store Macy's has had reviews on its site since 2006, but its more luxurious sister, Bloomingdale's, added reviews only in May.
"The notion of having a user saying that Chanel No. 5 smells like Brooklyn is so scary that [luxury brands] were literally paralyzed," said Scott Galloway, founder of L2, a think tank that specializes in prestige brands. A Chanel spokeswoman said, "We won't comment on this topic."
Some luxury retailers are reluctant to share the role of fashion arbiter with customers. Net-a-Porter.com gives its customers a way to participate in conversations via its Fashion Fix social hub—with blog posts, videos and live Facebook and Twitter feeds—but without overriding the company's status as a fashion authority, according to CEO Natalie Massenet. "We view ourselves as editors on behalf of a global customer base, and we are expressing our own opinions," she said.
Neiman Marcus said it decided against offering reviews to all of its shoppers, because "we'd like to keep the site uncluttered," said Gerald Barnes, president of Neiman Marcus Direct.
Yet for the past three months, Neiman Marcus has been allowing an elite group of top customers, known as "Insiders," to review best-selling products. Most of their reviews are effusive: A $195 Michael Kors watch "is versatile and artistic," an insider using the handle "Neimaniac" wrote.
Nordstrom was the first high-end department store to implement customer reviews, quietly adding the feature to its site last fall. To date, Nordstrom.com has received about 140,000 reviews, which have enabled executives to respond more quickly to fit and quality issues, said Jamie Nordstrom, president of Nordstrom Direct.
One shopper gave just one star to a pair of $795 Burberry riding boots. "I was really disappointed with these....They looked cute online but were way too big." Mr. Nordstrom said the company will relay the customer critique back to Burberry to see if there's a manufacturing issue.
A Burberry spokeswoman said the company is open to "both positive and negative" feedback from customers and actively participates in conversations about the brand on Twitter and Facebook.
Mr. Konheim of Nicole Miller acknowledges that reviews are inevitable. "Are reviews good, bad, or irrelevant? All of it," he said. "We need to learn how to navigate this new business landscape."
Original here.
Luxe Lowdown: Tony Sites Begin to Invite Buyer Reviews
By RACHEL DODES
By RACHEL DODES
More than a decade after book and electronics retailers embraced online customer reviews, the most elite stores in the U.S. are opening their websites—and the brands they sell—to the slings and arrows of public opinion.
At the end of the month, Saks.com, the online arm of Saks Fifth Avenue, will unveil a five-star review system where customers can express their opinions on products ranging from $1,700 Jimmy Choo bags to $7 Kiehl's lip balm. Macy's Inc.'s Bloomingdale's division and Neiman Marcus added their own versions of reviews recently, following the lead of Nordstrom, which began offering them last fall.
The changes are being driven by the need to beef up online sales, and a realization among luxury retailers that customers want the ability to take shopping advice from their peers.
"The customer wants a more objective voice saying, 'I own this, and these are the things you need to know about it,"' said Denise Incandela, president of Saks Inc.'s Saks Direct, who expects the feature to lower the company's returns rate and increase "conversion," the percentage of browsers who actually buy.
For fashion houses accustomed to dictating their own vision to consumers, reviews are generating mixed reviews.
Designer Carmen Marc Valvo says "a dress is not an electronic device like an iPad that is...suitable for a consumer-reports style rating. Style is a very subjective matter."
When Bud Konheim, chief executive of the brand Nicole Miller, first saw a 3-star review of a $465 dress on Nordstrom.com that criticized the dress for being "hot and uncomfortable," he was furious. "At first, I thought, 'Let's go find and kill that woman,"' he said. But as he thought about what the customer was saying, he had a change of heart. The commentator "was tapping into something we are well aware of: Our clothes do not fit everybody universally."
The clashes are a result of the luxury business's late appearance at the e-commerce party, one area that continues to see fast growth in a still-sluggish retail industry. While the National Retail Federation expects retail sales to grow by 2.3% this holiday season, nearly two-thirds of retailers are expecting online holiday sales to rise by at least 15%, according to a new study by the NRF.
Product reviews have been shown in surveys to boost loyalty and sales with online customers who can't see or touch the merchandise. According to the E-tailing Group, 71% of online shoppers said their choices are most influenced by customer reviews, followed by discussion forums. Retailers also have discovered that reviews tend to be overwhelmingly positive, averaging 4.3 out of 5, according to Bazaarvoice Inc., which provides review software for 1,000 retailers, including Saks and Nordstrom.
"We have proven that it is safe," said Brett Hurt, chief executive of BazaarVoice, which now counts 25 luxury brands among its clients, compared with just one a year ago.
Such findings are sinking in only slowly. High-end retailing, known for product innovation and customer service, has ironically been the last to adopt technologies that are de rigeur elsewhere in the retail world. Designer label Marc Jacobs just added e-commerce to its site last month. Chanel doesn't sell anything but cosmetics on Chanel.com.
Luxury brands have long regarded reviews and other social shopping features with trepidation. Midtier department store Macy's has had reviews on its site since 2006, but its more luxurious sister, Bloomingdale's, added reviews only in May.
"The notion of having a user saying that Chanel No. 5 smells like Brooklyn is so scary that [luxury brands] were literally paralyzed," said Scott Galloway, founder of L2, a think tank that specializes in prestige brands. A Chanel spokeswoman said, "We won't comment on this topic."
Some luxury retailers are reluctant to share the role of fashion arbiter with customers. Net-a-Porter.com gives its customers a way to participate in conversations via its Fashion Fix social hub—with blog posts, videos and live Facebook and Twitter feeds—but without overriding the company's status as a fashion authority, according to CEO Natalie Massenet. "We view ourselves as editors on behalf of a global customer base, and we are expressing our own opinions," she said.
Neiman Marcus said it decided against offering reviews to all of its shoppers, because "we'd like to keep the site uncluttered," said Gerald Barnes, president of Neiman Marcus Direct.
Yet for the past three months, Neiman Marcus has been allowing an elite group of top customers, known as "Insiders," to review best-selling products. Most of their reviews are effusive: A $195 Michael Kors watch "is versatile and artistic," an insider using the handle "Neimaniac" wrote.
Nordstrom was the first high-end department store to implement customer reviews, quietly adding the feature to its site last fall. To date, Nordstrom.com has received about 140,000 reviews, which have enabled executives to respond more quickly to fit and quality issues, said Jamie Nordstrom, president of Nordstrom Direct.
One shopper gave just one star to a pair of $795 Burberry riding boots. "I was really disappointed with these....They looked cute online but were way too big." Mr. Nordstrom said the company will relay the customer critique back to Burberry to see if there's a manufacturing issue.
A Burberry spokeswoman said the company is open to "both positive and negative" feedback from customers and actively participates in conversations about the brand on Twitter and Facebook.
Mr. Konheim of Nicole Miller acknowledges that reviews are inevitable. "Are reviews good, bad, or irrelevant? All of it," he said. "We need to learn how to navigate this new business landscape."
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