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BizReport : Ecommerce archives : October 17, 2016

What Amazon's incentivized review policy means for businesses

Recently, Amazon announced they would begin banning incentivized reviews for products on their site. The move has many small businesses wondering how the new policy will affect their business. One expert explains.

by Kristina Knight

Kristina: Amazon has said they'll ban incentivized reviews - what has brought about this policy change?

Ohad Hagai, VP of Marketing, Feedvisor: Amazon promises a best-in-class customer experience, and the product reviews feature is a key component of that. Since product reviews have a major impact on the customer buying decision, Amazon is doing everything it can to ensure that buyers are receiving products true to what they are expecting. A recent Review Meta analysis of 7 million Amazon reviews found that customers who received free or discounted items were much more likely to write positive reviews. Banning incentivized reviews is a step toward bettering the customer experience through an emphasis on authenticity. This policy change is not the first move by Amazon to improve the credibility of it's product reviews. In October 2015, Amazon filed a lawsuit against more than 1,114 individuals who had allegedly posted fake product reviews. This was followed by another lawsuit earlier this year, this time against the operators of websites which promised reviewers free products in return for glowing reviews.

Kristina: What does this mean for businesses selling within Amazon?

Ohad: Product reviews have a significant impact on a product's ranking, traffic and sales performance on Amazon. Amazon's ban on 'incentivized reviews' is a game changer for private label sellers who are usually the ones aiming to build product awareness and sales volume through such measures. The ban means such sellers will now need to uncover more legitimate methods for raising awareness of their products.

Kristina: How can brands work within these new guidelines?

Ohad: Brands will now have to shift marketing budgets toward other marketing channels, such as product listing ads and social media, to help drive traffic and gather favorable reviews. In addition, if a brand is also an Amazon vendor it should consider participating in the Amazon Vine program. Through this program, Amazon invites reviewers to post opinions about new and pre-release products. Reviewers are only selected after they have written several reviews voted as "helpful" by other customers. Vine is currently only available to first-party sellers but with the new policy, this may change.

Tags: Amazon, ecommerce, ecommerce reviews, Feedvisor, review policy

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