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Takeaway: Amazon tightened the controls on incentivized reviews on its site. While the move is certain to improve authenticity and consumer trust, it may also impact brands who are late to market and the third-party seller industry. Here’s some advice on how it could impact your go-to-market strategy.
On October 3, Amazon updated its community guidelines to prohibit the use of incentivized reviews in most cases. Its community guidelines have always banned direct compensation for reviews, however reviewers could post a review in exchange for a free or discounted product as long as they disclosed that fact in the review. The latest guidelines stipulate that the incentivized reviews can only be shared through the Amazon Vine program, which has controls in place to limit attempts to influence the content of reviews and the number of reviews displayed, or in the books category, where there is a tradition of providing advance review copies of books.
“Customer reviews are one of the most valuable tools we offer customers for making informed purchase decisions, and we work hard to make sure they are doing their job,” explained Amazon in its initial announcement. Similarly, Salsify consumer research found 82 percent of consumers say they want to see at least 3 reviews when they are considering a purchase. Clearly, access to reviews are a critical part of a shopper’s decision making process. But the change has negative implications for brand manufacturers who are coming later to the market or who have traditionally relied on incentivized reviews.
Positive Impacts: Improved Shopping Experience
Negative Impacts: Increased Costs and Launch Challenges
Amazon’s policy change impacts review generation agencies, third party sellers, reviewers, as well as direct 1P sellers. Companies who have built an ecosystem around incentivized reviews will be hit the hardest. ILoveToReview.com AMZReviewTrader.com, and SnagShout, to name a few have spent a lot of dedicated time and effort in gathering a network of reviewers to drive incentivized reviews on Amazon. Most of these companies are already in the process of transitioning to a deal trading platform. Though these deal trading platforms still drive incentivized purchases, they are no longer requiring reviews be left on products. Many of the companies have stated that customers are still welcome to leave reviews, and if one chooses to leave a review, they don’t have to leave a disclaimer in their review. It’s uncertain how or if Amazon will react or challenge these sites or sellers who participate.
Third-party (3P) sellers who are creating their own private label brands on Amazon will have a challenging time figuring out how to launch and become relevant on Amazon in a highly competitive industry.
Reviewers who have signed up to be a part of the incentivized review communities will also be effected by no longer being able to trial and share their opinion on free products.
Most first-party 1P vendors will see a positive effect on their brands as it will now be much more challenging for private label to compete or go to market. However, there are a few 1P vendors who had been using promo codes or Amazon’s giveaway program to generate reviews and drive conversion for their products.
Ways to Move Forward:
The change to Amazon’s review policy puts a stronger emphasis on authentic reviews and limits the options for late-to-market or third-party sellers looking for quick wins in getting incentivized reviews. A month into the change, we’ve yet to see all the implications for brand manufacturers, but it’s important to keep an eye on the new programs and valid options Amazon is offering its seller community to continue to provide reviews for shoppers.
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