Is Wal-Mart Listening?

WalmartAs of last Thursday, Wal-Mart has implemented a new consumer ratings and review systems on According to Cathy Halligan,’s chief marketing officer, “Reviews and ratings is the No. 1 customer-requested feature online at” Halligan talks of the benefits to the Wal-Mart community to make more informed decisions and how the feed back may even influence the decision of what products Wal-Mart sells.

This is definitely a step in the right direction. Bazaarvoice has proven that customer reviews and rating can offer significant monetary benefits to their clients. Bazaarvoice has helped brands such as QVC, Petco, Macy’s Bass pro shop achieve better search engine results, significantly lower return rates, increased per purchase spend, and higher customer loyalty. One of Bazaarvoice’s most successful case studies, Petco has reported that people who viewed the Top Rated Products converted 35% more often and spent 40% more per order than those who purchased via other paths. Plus On average, products with reviews have a 20.4% lower return rate than products without reviews. Products with more than 50 reviews have a 65% reduction in return rate than products with no reviews.

Often brands are reluctant to encourage reviews thinking negative reviews damage their reputation, but in a Brandweek interview, Sam Decker, vice president of marketing at Bazaarvoice, says negative reviews are valuable in establishing authenticity and helping customers find what they want. He notes that one- to three-star ratings hurt the sales of products, but often prompt shoppers to buy higher-rated, more expensive merchandise from the site.

In the same Brandweek article another Bazaarvoice client, Fair Indigo’s Bass adds that negative reviews are essential. “If all reviews are good, customers question if the ratings are legitimate,” he says. “Not only will people ignore the reviews, but it will hurt their trust in the brand. It would be better to have no reviews at all.”

Wal-mart should head the warnings of those that have come before. You would think that they would have learned a few lessons from their previous forays into online social community, but it’s hard to tell. Transparency and inclusiveness have not been obvious priorities of the global retail giant. From the misrepresented blog posts written by a staff photographer of the Washing Post, to “The Hub” with it’s unrealistic dialog by a “little girl” raving about the high fashion purchases she would be making for back to school –Wal-Mart always seemed more motivated in pushing a premeditated agenda versus developing an open and honest dialog with its customers. I am a little suspicious of some of the entries – For example a profile name “aSoldier” listing location as “currently deployed in Iraq” with such good advice to deliver early to avoid shipping issues. And “babyonboard” highlighting the ShiptoSite option in the review. At least they have some of the reviews marked as a Wal-Mart Associate. Maybe they are just trying to insert some reviews until the site is more fleshed out, but there are much better ways to encourage participation. Petco held a drawing for those who contributed and within two weeks they received about 4,500 reviews. If more of the products don’t start receiving reviews it looks like customers don’t care.

Even with some suspicions of phoniness, this has real positive potential for both Wal-Mart and its customers. Improved communication between brands and customers translates into more satisfying product offering and resulting increased profits.