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Good afternoon. How was our weekend? Fine, fine, thank you for asking. But then again, we didn’t go to space, so it’s all relative.
In today’s edition:
- Fighting fake reviews
- Klarna looks beyond buy now, pay later
- Back-to-school spending
—Julia Gray
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In 2006, Tommy Noonan started a website called SupplementReviews.com after watching fake product ratings flood the online fitness community. About a decade later, a member pointed out another arena for phony supplement reviews: Amazon.
“I checked out a listing on Amazon for a testosterone booster that had 580 reviews. I started reading the reviews and was just stunned,” Noonan said. “Multiple people were saying straight out that they had not used the product and they were only reviewing it to get a free fat burner...and they still gave it five stars.”
Do a number on: Noonan read every review and noticed most were written during the same weekend. The first 30 reviewers had only reviewed products from this particular brand, giving five out of five stars across the board.
- “The gears in my head started turning.” Noonan wrote a computer program that collected information from Amazon, plus another program to analyze the data and show abnormalities. ReviewMeta was born.
How the (faux) sausage gets made
ReviewMeta is one of a few options for online shoppers who want a reality check. When they see fishy product listings, customers can enter the Amazon URL and get an “adjusted rating” that filters out what the service deems as faulty reviews.
ReviewMeta takes all the reviews for a given Amazon listing and looks for patterns. Noonan asks questions like...
- Are a lot of the reviews written on the same date?
- Are there abnormal spikes in the number of reviews per day?
- Are the reviews regurgitating the same marketing phrases?
Aside from supplements, Noonan said fake reviews proliferate under “products that simply don’t work, like mosquito repellent bracelets” and consumer electronics. “Products that have a high profit margin and are easy to manufacture, a low barrier to entry, and have a lot of competition and a lot of search volume on Amazon.”
Close read: Researchers at UCLA conducted a 10-month study and estimated that up to 4.5 million sellers used Facebook groups to source fake reviews.
- They work—at least at first, translating to “an average 12.5% bump in [the products’] sales ranks.” But in mere weeks, the real one-star reviews pour in and sink rankings.
Phonies everywhere
Amazon’s inflated ratings have been an issue for years, but platforms like ReviewMeta put the onus on the consumer.
Big Tech has recently come under scrutiny for their efforts to combat fake reviews.
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Amazon and Google now face a formal investigation in the UK.
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Amazon did not respond to a request for comment, but a spokesman told The WSJ in June that the company analyzes 10 million reviews weekly.
Checkered: One way Amazon says it’s fighting phonies is with its new one-tap star ratings. While Noonan said the company is “doing a lot,” he believes that feature is backfiring.
“There are a lot more ratings and the ratings are more positive on average. There's no way for anybody to tell if they're fake or not [because] there's no text [or] date...It's impossible to analyze.”—JG
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Francis Scialabba
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Klarna held out for a hero. On Friday, the fintech company said it bought Hero, an e-comm tech startup, as it expands into social commerce.
- The deal will run Klarna about $160 million, sources told the WSJ. Whether it pays later is
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The company earlier acquired Toplooks, an AI tech platform that specializes in shoppable content.
The setup: Hero connects online shoppers with retail employees via texts, videos, and virtual chat rooms through its app. Better customer service = more $$.
- The London-based company was founded in 2015 and already works with brands like Levi’s, Rag & Bone and Chloé. There’s also some overlap with Klarna's existing roster, including Nike and Adidas.
- For those not in the know, Klarna will intro Hero to its 250,000 partners.
The payoff: Klarna wants to turn retailers into personalities and content creators, rather than just brands. “We see a huge opportunity to leverage Hero’s existing platform and expertise to allow in-store retail professionals to become global brand ambassadors,” CEO Sebastian Siemiatkowski said in a statement.
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Staffers are the new influencers, and retailers are rushing to build brand ambassador programs to tap into that trust.—JG
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No, “flip that funnel” is not the name of an obscure reality TV show in which contestants elegantly toss funnel cakes skyward before a panel of discerning judges in top hats.
In fact, “flip that funnel” is what retail marketers need to do in response to new data privacy laws.
Tech giants’ new updates and third-party cookie changes are forcing retail marketers to rethink where they put their time and money—and Kady Srinivasan, Klaviyo’s SVP of marketing, says businesses that rely on third-party platforms to source their traffic are in for “a troubling road ahead.”
Sound ominous? There’s a simple solution to the data privacy problem that most retail marketers tend to overlook: To learn how your brand can flip the funnel (and your fortunes), keep reading here.
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School’s out for summer, but retailers and consumers are already preparing for when class is back in sesh.
2021 back-to-school spending will hit its highest level in recent years: $32.5 billion for K-12 students, or $612 per student, according to Deloitte. Back-to-college consumers will shell out $26.7 billion, or $1,459 per student.
But on what, exactly?
Logging on: A year of virtual classrooms has led to a 37% increase in tech spending for K-12 students, and a 16% jump for college students. Back-to-school spending on computers, smartphones, tablets, and the like is expected to reach a whopping $11.8 billion, with wearable tech seeing the most money.
- 44% of surveyed households plan to purchase fewer “traditional” back-to-school supplies due to a renewed emphasis on tech.
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Even as schools open for in-person learning, 58% of respondents said they plan to spend on online resources.
The shift also extends to how that shopping will get done: 34% of consumers plan to use “buy online, pickup in store” and curbside pickup. And parents of K-12 students are twice as likely as those of college students to use emerging tech to buy supplies.—JG
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Flipkart, India’s e-comm giant (owned by Walmart), is valued at almost $38 billion after a new funding round.
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Nordstrom and Asos have teamed up on a joint venture that gives the department store a minority stake in Topshop and three other brands.
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Phoebe Philo, former creative head of Celine, will return to the luxury world with her own fashion house.
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Chipotle now accepts TikTok video “resumes” in hopes of attracting younger applicants.
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Is your digital engagement strategy missing a key ingredient? Don’t worry. Easy-to-use tools like Lexer are here to help you master your data and improve customer engagement. Lexer is a customer data platform that helps brands and retailers grow sales through better customer experiences. And praise be, they’ve compiled a playbook with five data-driven strategies. Get the deets right here.
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Today’s top retail reads.
Spinning forward: iFit had a three-decade head start on Peloton, but the home exercise company is now racing to catch up. (Forbes)
Dollar for your thoughts: Inflation be damned—Dollar Tree says it has a plan to keep its prices at $1. (WSJ)
False start: Japan’s retailers once expected an Olympic gold rush. Now the Tokyo Games will be the first without spectators, and stores are shifting strategies to attract shoppers. (WWD)
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At the mall, it’s where band tees are the only tees. In Retail Brew, it’s where we invite readers to weigh in on a trending retail topic.
Retailers left and right are promising to be more sustainable, and setting ambitious goals to deliver net-zero emissions in the next decade or so. But we’re seeing different ways to get there, from using recycled materials and eco-friendly packaging to offering resale.
Our question: Which sustainability upgrade will have the biggest impact? Cast your vote here.
Circling back: We recently asked you to predict where most consumer spending on apparel will go in the next five years. Nearly 40% voted for secondhand, followed by fast fashion (22%), subscription services (20%), and off-price (17%).
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Catch up on the Retail Brew stories you may have missed.
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Written by
Julia Gray
Illustrations & graphics by
Francis Scialabba
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