Online reviews tell us less than we think

If you believed the Laura Ashley reviews on reviewcentre.com you would never buy anything from them.

"Awful company and staff," says a one-star review of the UK retailer. "If you had a minus rating they would be on it." There are plenty more, complaining about late delivery, unhelpful call-centre staff and sofas that sag. Of more than 100 reviews, about 90 are damning, although the remainder are glowing.

I asked Laura Ashley what it thought about this. "The brand has a huge following and we regularly receive positive feedback," the company told me.

What about all those online complaints? "The majority of our customers are satisfied with our products and it is inevitable that a small proportion feel we do not meet their expectations," it said. "We respond to queries that come direct to us, but are unable to monitor all review forums on the internet."

This struck me as complacent. Did Laura Ashley not realise that the web had changed everything, that word-of-mouth had gone viral and that consumers could now deliver their own unmediated verdicts? What was the point of Laura Ashley's own social media efforts, its 17,000-plus Twitter followers, its 27,000 Facebook "likes", if it was being lambasted elsewhere? Was this not a case of a company suffering severe damage because it hadn't grasped the importance of user-generated web content?

Not quite. While other retailers are struggling, Laura Ashley last month announced first-half sales up 7.5 per cent and profits up 13.7 per cent. Clearly, many customers were not paying attention to the reviews. Nor were the 11,000 people surveyed this year by Which?, the UK consumer research organisation. They gave Laura Ashley five stars for product quality, four for service and a respectable overall rating of 71 per cent, compared with 80 per cent for top performers Lakeland and John Lewis.

So are online ratings overrated? Do they represent the views of a few moaners? And do other consumers pay any attention to them?

There have been plenty of studies on the subject, but they are strangely inconclusive, as a useful review of the research by Peter De Maeyer of Singapore Management University in the Journal of Product & Brand Management shows.

People certainly read consumer reviews. As long ago as 2008, one survey found 70 per cent of Americans read them before making an important purchase. And a 2006 study of online sales from Amazon and Barnes & Noble discovered that favourable reviews boosted books' sales rankings.

There were other studies that confirmed that positive reviews lifted sales and negative ones slowed them. But not always. Mr De Maeyer said there were research studies that showed negative ratings had no impact. There was even research demonstrating that bad reviews, strangely, boosted sales.

And some studies showed that what mattered was the quantity of reviews rather than what they said. A large number boosted sales, whether they were positive or negative.

A consistent finding is that reviews do tend to be either strongly positive or negative, with few in the middle. One study showed that sharp disagreement among reviewers made little difference to those who went to see a movie but another showed that it put people off booking a hotel. This could be because ending up in a bad hotel represented a bigger risk than seeing a poor film.

So, for all the talk of how online consumers have taken control, we know little about the effect they have. Perhaps the most significant study was one that found that positive reviews lifted the sales of high-quality products but made little difference to the purchase of poor ones. As Mr De Maeyer said: "This study suggests that consumers rely on other information sources than online reviews."

Most of us would surely put our personal experience of a company ahead of anything web reviews say, and would rely more on our family and friends' stories than those of online strangers.

To that extent, Laura Ashley may be right to shrug off online criticism. However, no company can expect to do well for ever. Web reviews, particularly when many persistently repeat the same complaints, may indicate looming difficulties. The Which? survey gave Laura Ashley only three stars for after-sales service. If I was a manager there I'd look into that, as well as thinking about plumping up the sofas.

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