3 Things You Should Know about the State of Reviews

3 things you should know about reviews

Vi får mange spørgsmål om anmeldelser fra virksomheder, der bruger Trustpilot. Normalt kender vi svarene, men nogle gange sker det, at vi får spørgsmål, vi ikke lige kan svare på.

Det kan være spørgsmål som for eksempel:

*“Vil en god anmeldelse virkelig betyde noget for en kunde?”*

*“Hvor mange anmeldelser læser folk, inden de beslutter sig for at købe noget?”*

*“Hvorfor virker det, som om kun utilfredse kunder skriver anmeldelser?”*

Selvom vi godt var klar over, at vi muligvis ikke ville få svar på alle spørgsmål, var det vigtigt for os at lave en undersøgelse af anmeldelser.

Undersøgelsen blev foretaget på det amerikanske marked via et spørgeskema lavet i SurveyMonkey, og 1.100 forbrugere deltog. Der var en ligelig fordeling af kvinder og mænd blandt deltagerne, og de kom alle fra husholdninger med en indkomst under 700.000 kroner.

Vi fandt ud af en masse spændende ting, og vi har valgt at beskrive de tre vigtigste lidt nærmere.

### 1. Anmeldelser betyder mere i nogle brancher end i andre

Betydningen af anmeldelser varierer fra branche til branche. Omkring halvdelen af de forbrugere, der deltog i vores undersøgelse, sagde, at anmeldelser var “meget vigtige” i forbindelse med køb af biler og software. Hvis en person ikke kan finde et godt udvalg af anmeldelser om software til virksomhedsbrug eller om den bil, vedkommende er interesseret i, er det usandsynligt, at de foretager købet. Anmeldelsen nedenfor giver et godt billede af en kundes oplevelse med en virksomhed: Den indeholder alle de informationer, en potentiel kunde vil være interesseret i.

Undersøgelsen tyder også på, at online-anmeldelser vil spille en større rolle for både forbrugere og virksomheder i den finansielle industri og sundhedsindustrien. Det sker i takt med, at disse brancher får mere online-tilstedeværelse og investerer mere i digital markedsføring.

En bruger på Trustpilot har skrevet en god og indholdsrig anmeldelse af softwarefirmaet Articulate.

indholdsrig anmeldelse, kundeoplevelse, kundefeedback

### Det kan du gøre

__- Søg efter din virksomhed og dine konkurrenter på nettet for at finde ud af, om kunder i din branche søger efter anmeldelser.__  
__- Abonnér på fora for anmeldelser af virksomheder inden for din branche for at holde styr på, hvad kunder siger om dig og dine konkurrenter.__  
__- Tjek den feedback, din virksomhed får online – hvis der ikke er nogen, eller hvis det hovedsagetligt er dårlig feedback, kan du overveje at begynde [at indsamle anmeldelser](https://dk.business.trustpilot.com/get-started/request-demo?utm_medium=3-ting-du-br-vide-om-anmeldelser&utm_source=at+indsamle+anmeldelser&utm_campaign=blog_dk&sfdc=701b0000000JsWM).__

### 2. Kunder kigger efter bestemte nøgleord i anmeldelser

Vi fandt ud af, at kunder ikke bare læser anmeldelser på må og få. Når folk læser anmeldelser, kigger de efter bestemte nøgleord og sætninger. Og de er med til at bestemme, om folk gennemfører et køb eller ej.
Forbrugere vil gerne forsikres om, at en virksomhed har en høj overordnet bedømmelse, at dens kunder synes, virksomhedens produkter er af god kvalitet, og at deres kundeservice er fantastisk. Desuden tjekker folk gerne, om der er hurtig levering.

Og det giver god mening. Forbrugere stoler på, at andre forbrugere vil dele deres oplevelse, hvis de har købt en cardigan, der er faldet fra hinanden i vaskemaskinen. Derimod føler de ikke, at de nødvendigvis kan stole på det, hvis det er virksomheden, der deler information om deres produkter. Og hvis nogen bestiller noget til jul, vil de være sikre på, at det bliver leveret til tiden.

Kunder kigger også på anmeldelser for at sikre sig, at virksomheder svarer. Når en virksomhed svarer på kundernes anmeldelser, ved forbrugerne, at virksomheden lytter til og forhåbentlig handler på feedbacken for at sørge for, at deres kunder er tilfredse, og for løbende at forbedre deres virksomhed.

Ovenfor har Jacada Travel, en af de virksomheder, der bruger Trustpilot, svaret på en anmeldelse.

Svar på anmeldelse, kundetilfredshed, feedback

### Det kan du gøre

__Sørg for at svare på dine kunders anmeldelser regelmæssigt – det viser noget om din kundeservice, og det kan også tiltrække nye kunder.
Hvis du overordnet set får negativ feedback om din kundeservice, leveringstid eller produkt, bør du arbejde på at forbedre kundeoplevelsen. Ellers risikerer du at miste kunder.__

### 3. Kunder motiveres i stor stil af en invitation til at skrive en anmeldelse

Hvis du undrer dig over, hvor alle de dårlige anmeldelser af din virksomhed kommer fra, når nu størstedelen af dine kunder typisk er godt tilfredse med din service, kan det være, du også skal kigge indad.
Hvis en virksomhed beder deres kunder om at anmelde dem, er det mere sandsynligt, at forbrugere skriver en anmeldelse, end hvis de selv skulle finde et forum. Utilfredse kunder behøver derimod ikke altid en opfordring: De vil gerne dele deres oplevelser online. Tilfredse kunder giver typisk ikke feedback, hvis ikke de bliver bedt om det.

Når du inviterer til at skrive en anmeldelse, er det 29 % af forbrugerne, der “med stor sandsynlighed” vil skrive en anmeldelse mod 14 %, hvis de ikke modtager en invitation.

Invitér alle dine kunder til at skrive en anmeldelse, så fremtidige kunder kan læse om en masse forskellige kundeoplevelser med din virksomhed i stedet for kun de utilfredse kunders meninger.

Ovenfor er en tilpasset e-mail fra ClassPass, en af de virksomheder, der bruger Trustpilot, hvor de inviterer deres brugere til at anmelde deres service.

invitations-email, tilpasset invitation, brugeranmeldelse

### Det kan du gøre

__- Invitér alle dine kunder til at skrive en anmeldelse, så den feedback, der ligger online, giver et reelt billede af din virksomheds kundeservice.__

Vil du vide hvordan anmeldelser kan styrke din forretning - få en gratis demo

Vil du vide, hvordan anmeldelser kan styrke din forretning?

3 ting du bør vide om anmeldelser

the importance of social proof in fintech trustpilot report 2019

The challenge is not just a technological one. They need to convince customers to switch from the wellknown names they are familiar with, by soliciting, and then displaying, positive ratings and reviews.

When London Research and Trustpilot surveyed start-ups and scale-ups, the conclusion was very clear. __Customer experience is seen as the most important differentiator for emerging brands, ahead of product innovation.__

This is because good ratings create a virtuous circle through which delighted customers encourage new users to sign up. This makes the fintech more investable, which then funds feature improvements which encourage more customers to sign up and rate the service highly.

The survey of 143 start-ups and scale-ups found that:

- More than a third (35%) find ratings and reviews ‘critical’ for converting prospects into new customers, and a further 57% said they are ‘important’ or ‘quite important’.
- Nearly a third (31%) believe that positive reviews and social proof are critical for generating interest from investors, and a further 52% said they were important.
- Around a fifth (21%) of those surveyed have been asked by investors to provide customer centricity proof points such as ratings and reviews, and a further 43% have proactively provided this information.
- More than half (52%) advertise their customer ratings on their websites, while 46% take to social media and nearly a third (31%) use email to display ratings.
- Around two-thirds (65%) of those surveyed strongly agree that they have built their business around an understanding of what customers really need.

The key for start-ups and scale-ups is to engage with and manage the review process, to make sure the resulting rating accurately reflects customers’ opinion of the business. This doesn’t mean removing bad reviews from view, since occasional criticisms reassure users that the good reviews are genuine.

As noted above, they also provide crucial feedback for improvement. Companies should be actively soliciting reviews from their customers, and use them to their advantage by funnelling that information back into the business to improve processes, products and services. The opportunity for a five-star rating is too important to be left to chance.

## Introduction

According to [KPMG](https://home.kpmg/uk/en/home/media/press-releases/2019/02/uk-remain-leader-in-fintech-investment-but-loses-global-crown.html), fintech investment across the world doubled to $111.8 billion in 2018, with the US, China and the UK leading the way. In the UK alone, total investment in fintechs in 2018 was almost four times higher than 2017 levels ($20.7 billion versus $5.6 billion).

These record-setting levels of investment show there is a clear appetite to try new services and fund them, but it means standing out in a crowded marketplace is a major challenge.

The ultimate aim of fintech start-ups and scale-ups is to repeat the success of a company like TransferWise. It has signed up more than five million users since launching in 2011 and, through its latest round of funding, saw its [market valuation double to $3.5bn](https://www.ft.com/content/812966e4-7bb2-11e9-81d2-f785092ab560) in May 2019.

A key element of TransferWise’s strategy was to use the ratings from its customers to demonstrate to potential investors it was meeting an unfulfilled need. This report is based on research conducted for Trustpilot by London Research, which shows that this type of social proof is increasingly used by fast-growing businesses, including those in the fintech sector, to show investors that they are highly investable, as well as to gain traction among customers.

The research also shows that __companies are using ratings and reviews to improve their customer experience, and innovate on their products and services.__

## Section 1: Building customer trust through social proof

Every disruptive start-up or scale-up needs to leverage consumer dissatisfaction with the way things are traditionally done in their sector, and channel it into engagement with their own challenger service.

These relatively small but ambitious companies are at an obvious disadvantage compared to globally known brands with huge advertising budgets. They are also competing against all the other start-ups in their sector, some of which will be spending their VC investments launching expensive marketing campaigns.

Persuading a prospect that a new market entrant is trustworthy is a challenge, particularly in the financial services sector where customers’ savings and future financial health can be at stake. Although fintechs can point out that they operate in a highly regulated industry, many say that their most effective message is the reassurance offered by existing customers giving their service a high rating or a good review.

Such is the importance of the customer experience that it outweighs innovation in the eyes of start-ups and scale-ups. 

According to the London Research survey, almost half (46%) felt the most important differentiator for their business was the quality of the customer
experience it offered, compared to 38% for ‘product / innovation’, traditionally seen as a startup’s raison d’être. Customer experience is also seen as significantly more important than brand awareness (7%), online reputation (5%) and price (4%).

Start-ups and scale-ups need to capitalise on the quality of their customer experience for marketing purposes. __The research also showed that more than a third (35%) of the companies surveyed view positive ratings as ‘critical’ for turning prospects into customers, and a further 47% regard them as ‘important’.__

### Ratings are crucial for establishing trust

Smart Currency Exchange helps people transfer money between different countries and currencies. The company’s Digital Marketing Manager, Ricky Bean, is all too aware how nervous customers can be when they are asked to hand over their life savings to a third party to help them buy their dream property in the sun.

The company, like any other currency exchange in the UK, is highly regulated by the Financial Conduct Authority. This provides reassurance for potential
users. However, Bean believes ratings are still incredibly important for its prospective customers.


Digital Marketing Manager of Smart Currency Exchange

“When we onboard somebody, we ask them to consider rating us and when we’ve made a transfer, we send them another email, from the person who helped them, asking for a rating and a review.

“Then when we talk to, or email, our next prospect, we always mention our five-star Trustpilot rating. For people to know we’re highly rated is crucial when it comes to such an emotional purchase using their life savings. It’s why we have our score front and centre on our home page.”

### Using ratings to improve customer service

Abba Newbery, CMO at mortgage broker Habito, agrees ratings and reviews are crucial. The company, which has already raised more than £27m in investment, uses ratings to reward staff for providing great customer care which, in turn, encourages better reviews to help persuade more new customers to sign up.

Habito aims to make getting a mortgage a lot simpler and quicker by matching customers with the best package and providing them with a customer care
assistant to hold their hand throughout the process. Customers can rate both the service and the assistant who helped them. 

CMO of Habito

“Broking has always been a part of financial services that relies heavily on word of mouth, and so we encourage our customers to rate us to show we make one part of buying a house a lot easier. Our customers build a close relationship with their advisers, who ask them to rate the service they receive.

“We value this Trustpilot score so highly we not only put in on our home page, but we also use it for members of staff in our employee reviews process.”

### How fintechs encourage reviews

The London Research/Trustpilot survey shows that 55% of start-ups and scale-ups actively encourage consumers to leave reviews. The most common method is by email (75%), followed by verbal requests for a rating (64%). One in three companies surveyed are also taking to social media to secure ratings from
their – hopefully – happy customers.

Once a fintech has secured some positive ratings, the next step is to ensure prospects know about them. The most common channel for displaying positive ratings is the brand’s website, used by just over half (52%) of scale-ups and start-ups. Social media channels are harnessed for this purpose by nearly half of those surveyed (46%), with email being used by one in three (31%).

## Section 2: The importance of customer ratings to investors

Ask any investor what they look for in a business asking for funding and there will be some common answers. A start-up or scale-up needs to have a great team behind it. Financiers ultimately invest in people they trust to turn a business plan into a thriving company that will offer good returns and, one day, a valuable exit route.

It must also answer a customer need. The London Research survey shows investors are now also looking for social proof to establish if a company
offers a good service which people rate highly.

Nearly a third (31%) of the start-ups and scale-ups surveyed deemed positive reviews and social proof to be ‘critical’ for generating interest from investors, and a further 52% said they were important.

### Ratings tell investors the real story

Every VC wants to find the next big thing. At techfocused VC Draper Esprit, Investment Director Vinoth Jayakumar explains that his firm, which takes a
longer-term view than many, looks for people who can break the mould. To judge how well a service is going down with consumers, he looks beyond the
metrics over which the company may have control to focus on what the public thinks.

For this, Jayakumar goes beyond the ‘organised sanity’ of Net Promoter Score (NPS) and marketing questionnaires, and delves into the live environment
of ratings. 


Investment Director at VC Draper Espit

“It’s important that you know these are genuine people, who aren’t being paid in any way. They let you see the direction of travel is correct.

 “We know that a five-star rating is better than four-star but exactly how many new customers that attracts, we don’t know for sure. We invest in
companies for the long term. We know their score may change, hopefully for the better, and so we look for a rating to show that someone has built a
proposition that people want.”

Our research shows that not all investment companies are as tuned in to the importance of positive consumer sentiment as Draper Esprit. Around a fifth (21%) of start-ups and scale-ups surveyed have been asked by investors to provide customer centricity proof points such as ratings and reviews, but a further 43% have proactively quoted social proof such as ratings when dealing with investors.

Peer to peer lending company Funding Circle certainly understands the link between how investable a company is and its Trustpilot score. It has successfully helped more than 49,000 businesses access finance. It’s the job of Bernard De Barbeyrac, Head of Decision Science, to assess how suitable a
company is for investment and band them based on potential risk.

“In the first instance we take a quantitative approach to build up the risk profile of a business wishing to go onto our investment platform,” he says. “After this, the underwriting team take more of a holistic approach to assess creditworthiness. They also look at external facing proof points such as Trustpilot and customer reviews to see if there are any potential reputational problems for future investors.”

### When your users are your investors

Just as fintechs are changing the way the public interacts with financial services, technology has also disrupted traditional investment models by allowing the public to crowdfund businesses they believe in.

That means some of the brightest ideas in financial services have many individual investors looking for a public-facing scorecard to gauge how well the business is doing in serving existing customers and, hence, attracting new ones.

Online Community Manager at Monzo Bank

“We’ve now got 36,000 investors and our Trustpilot ratings and reviews are something that crops up on our forums all the time,” he says.

“People who have backed us want to talk about our latest scores and what we are doing to move them in the right direction because they understand new customers want a good reason to sign up to a challenger bank. They don’t come better than positive ratings and reviews.”

### Ratings reach an investment and marketing sweet spot

Crowdfunding also provides another huge benefit for fintech start-ups. As a growing company reaches out to the public for backing, they are also raising
awareness of their new service.

Hence, according to Roberto Napolitano, Marketing Director at Seedrs equity crowd funding platform, there is a virtuous circle developing. Platforms such as his are used by start-ups to raise awareness of their new service, attract new sign-ups, solicit positive ratings so they not only secure additional users, but also encourage members of the public to invest.

“We certainly see a lot of start-ups use the platform to help build awareness about themselves and get people to try them out so they can rate it,” he says.

 “These ratings show potential investors that a company is interested in engaging with customers and improving on what they have to say; that they’re not solely about raising revenue." 

Marketing Director at Seedrs

“It’s also useful for allowing start-ups and scale-ups to see how other companies are doing, what scores they’re getting, where they’re doing well, and where they’re getting tips on how they could improve.”

## Section 3: Harnessing consumer feedback for improved CX and innovation

Start-ups and scale-ups are finding that developing a great solution to a nagging problem in financial services is a great start, but it is only a start. Moving beyond a great idea to build scale by listening to customers, and being seen to do this, are top priorities.

We found that two-thirds __(66%) of companies strongly agree that a reputation for openness and transparency is crucial for their brand__ and, encouragingly, a similar percentage (65%) strongly agree that they have built their business around an understanding of what customers really need.

To achieve this, they need to take control of their ratings, listen to feedback, act on it, improve their offering and then, crucially, encourage users to rate them so their scores evolve and more new customers sign up.

### The need to take control

Fintechs are going to be rated whether they have engaged with the process or not. It’s only by being proactive with review collection that you can get an
accurate picture of your customers’ views.

When Monzo’s Cook decided to explore the use of Trustpilot ratings, for example, he found that they were lower than he expected. The bank looked like it was providing an inferior service, which other evidence suggested was not the case.

“Trustpilot always came up first on a Google search for our reviews and we were shocked to see we were only a three out of five,” Cook recalls.

“We knew our customers generally thought we were doing a good job and that we were much better than a three-star rating. When we drilled down, we
were getting some bad reviews from people whose accounts we had to freeze. We’re a licensed bank and so we have to apply the law and that sometimes
means freezing accounts.

“That’s when we decided to really get to work on our ratings and we now regularly ask our members to review us, so the good reviews far outnumber the bad ones. We’re very nearly at a five-star rating and, when we are, we intend to use the stars in our advertising.”

### Listen and improve

The business side of banking shares many of the frustrations that consumers experience with traditional banking brands. Laborious form-filling and lengthy decision-making processes, combined with nontransparent fee structures, prompted Capital on Tap to launch a service that is upfront about fees and can let a company know if they qualify for a loan within two
minutes.

The business lender’s Head of Growth, Alex Miles, reveals that it is only by listening to customers that the company can take the initial discontent with the banks and turn it into repeat business from customers who are happy to spread the word about what they have found to be a better alternative.

Head of Growth at Capital on Tap

“We’ve made many improvements but the biggest we were getting asked about, in our Trustpilot rating reviews, was integration with accountancy packages, such as Xero. So that’s something we’ve done, and we’ve encouraged our users to try out the better service and rate us, so we create a virtuous circle of
better features leading to higher Trustpilot scores, which encourages more people to try out the service.”

### A barometer for business success

It may seem obvious that user ratings are a useful barometer for how a company is serving its clients, and that more people will sign up for a new service if existing customers have expressed their delight.

An interesting question, though, is what happens when the opposite occurs, and ratings dip? The mortgage broker, Habito, found that it could use its
Trustpilot score as a guide not just to how well it was performing, but how well other parts of the business were impacting that performance.

“We had a major marketing drive to get more people on the platform, which worked really well,” Habito’s Newbery says.

__“The problem was it probably worked too well, and we found that we had more customers than we could serve to our usual very high standard. We noticed our Trustpilot scores started to drop off a little, and so we knew we had to take immediate action and scaled down the marketing activity.__

“Our Trustpilot rating is too valuable to us in the longer term to allow it to go down and risk discouraging people to sign up and try us out.”

## Conclusion: Ratings help create unicorns

It is no secret that every fintech start-up and scaleup is trying to follow in the footsteps of the likes of TransferWise and Revolut to become the next billionpound ‘unicorn’.

This research shows that to do so, they are concentrating more on the customer experience they provide than on innovation (46% vs. 38%). Despite
the sector being crowded with emerging tech-driven companies that have a new approach to how legacy financial services are handled, providing customers with the best experience possible is the top priority.

It is clear that this is because they realise that focusing on the customer builds a virtuous circle, based on ratings and reviews. These are considered
as ‘important’ or ‘critical’ by a majority (82%) of start-ups and scale-ups. This is because praise from delighted users is fundamental in convincing
prospects to sign up. 

It helps grow the user base and provides compelling evidence that the company is answering a consumer need with a popular service that, in turn, helps it stand out as highly investable.

It comes as little surprise, then, that nearly two in three of the fintech companies surveyed revealed they had been asked to provide ratings scores or they proactively decided to include them in presentations when seeking funding.

The research shows that a great customer experience rates above innovation, brand awareness and price when it comes to winning new customers. This
means that ratings are a crucial tool in achieving fintech companies’ top-line strategy of both attracting new users and accessing the necessary investment to deliver on their vision of becoming the next unicorn.

__*Please note that this report was written in August 2019 and optimised in August 2022.*__

### Methodology

As well as conducting the interviews for this research, London Research also carried out a survey of 56 start-up and 87 scale-up businesses across all major business sectors, including fintech companies. The survey was promoted via email and social media channels by both London Research and its sister company Digital Doughnut in May 2019. The vast majority of responding companies were in the USA (43%) and the UK (35%). The breakdown by region was as follows: North America (45%), Europe (43%), Asia Pacific (5%), Other (7%).

### Acknowledgements

London Research and Trustpilot would like to thank the following people for their insights.

- Ricky Bean, Digital Marketing Manager, Smart Currency Exchange
- Richard Cook, Online Community Manager, Monzo Bank
- Vinoth Jayakumar, Investment Director, Draper Esprit
- Alex Miles, Head of Growth, Capital on Tap
- Roberto Napolitano, Marketing Director, Seedrs
- Bernard De Barbeyrac, Head of Decision Science, Funding Circle
- Abba Newbery, Chief Marketing Officer, Habito.

The importance of social proof in FinTech

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The Value of Customer Ratings and Reviews in Advertising in the US

This research explores the value of showcasing customer ratings and reviews in advertising, and in particular the impact of Trustpilot content in digital campaigns. Based on a survey of 1,000 US consumers and interviews with Trustpilot business customers

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Alternatively, you can download the infographic, with all of our research's findings.

This [London Research study](https://londonresearch.com/) reports on the benefits of using Trustpilot ratings and reviews in advertising to build trust and increase propensity to purchase.

The research also looks at the extent to which specific types of Trustpilot content in online advertisements influence US consumers, including the Trustpilot logo and stars, TrustScore, the volume of reviews, and the impact of an authentic customer testimonial.

To test the value of Trustpilot ratings and reviews in ads, 1,000 American consumers were shown a series of digital advertisements for a new cell phone plan, and asked which ads they would be most and least likely to click in order to buy.

### Summary of the research

anatomy of a co branded ad

Anatomy of a co branded ad

- 63% of US consumers agree a good Trustpilot score makes them more likely to trust a brand.
- 61% agree a good Trustpilot score makes them more likely to buy from a brand.
- An online advertisement with the Trustpilot logo and stars is 37% more persuasive than the same ad without them.
- Consumers are two-and-a-half times more likely to click a Trustpilot co-branded ad showing a five-star customer rating, TrustScore, 3,000+ reviews, and a customer review, than an ad with no Trustpilot content.
- A Trustpilot five-star advert with a 4.8 TrustScore showing 500+ reviews is more than twice as compelling as an ad with no Trustpilot branding.
- A Trustpilot five-star advert with a 4.8 TrustScore showing 3,000+ reviews is 31% more compelling than the same ad just showing the TrustScore.
- A Trustpilot five-star advert with 3,000+ reviews performs 10% better than the one with 500+ reviews.
- A five-star ad showing a high TrustScore with 3,000+ reviews and an actual customer review performs twice as well as an ad with no Trustpilot components, even when the price is 20% higher ($48 versus $40).

## The importance of ratings and reviews in the buyer journey

Consumers are right to be cautious about putting their trust in brands when they’re looking to buy products and services online. According to the Federal Trade Commission, Americans have lost $588m to scams during the pandemic era alone, which makes people even more eager to ensure they’re buying from a reputable business and spending their money wisely. At the same time, consumers are becoming increasingly savvy about fake reviews used by less-known brands to bolster their credibility.

Our research shows that authentic customer reviews and star ratings are now firmly established as a go-to source of information for the majority of shoppers. Sixty-four percent of US consumers say they’re ‘often’ or ‘very often’ influenced by customer reviews during the journey to purchase, while 63% say the same for star ratings (Figure 1).

This does not surprise Kyle Rao, President and CEO of Secure Medical. As the company behind eDrugStore.com, they are fully aware that consumers need to see that people like them have used a service before, and rated it highly.

Kyle Rao quote

President and CEO, Secure Medical

Figure 1 - CEU

Figure 1

Ratings and reviews play an important role in influencing buying decisions across a wide range of categories, from electronics to travel, and property to auto rental. For every sector shown in Figure 2, at least half of consumers surveyed regard ratings and reviews as ‘useful’ or ‘very useful’.

Figure 2 - CEU

Figure 2

Advertisers should strive to understand how different touchpoints and channels work together to build trust and positively impact the decision-making process during the customer journey.

After customer ratings and reviews, the next most frequently visited touchpoints in influencing a buying decision are search engines, followed by ecommerce sites and social media (Figure 1). Given their usefulness and popularity, savvy marketers should think about how they can harness ratings and reviews across other channels, including both online and offline advertising, as well as across their own digital properties and email campaigns.

SuretyBonds.com is a good example of a financial services brand showcasing star ratings and customer reviews.

Example SuretyBonds

### The benefits of Trustpilot content through the funnel


Figure 3 - CEU

Figure 3

The trust engendered by adding Trustpilot stars and scores to digital advertising is not just good for brand image, it is also a core component in driving sales. Sixty-one percent of US consumers agree a good Trustpilot score makes them more likely to buy from a brand, including 26% who strongly agree (Figure 3). The propensity to buy something from a company is very closely linked to the level of trust in that brand. A very similar percentage of consumers (63%) agree that a good Trustpilot score makes them more likely to trust a brand (Figure 4).

Figure 4 - CEU

Figure 4

Brands are seeing this throughout the customer journey. For Octopus Energy Germany, a green energy supplier, adding its star rating is a way for it to build trust while also raising awareness at the top of the funnel.

Quote Melanie Schiller

Head of Brand Communication, Octopus Energy Germany

At fashion brand Bamigo, work is under way to add the Trustpilot logo, star rating and customer reviews to all its product pages because, as the company’s Marketing Manager Freek Rijken reveals, they are proving highly effective at the purchasing end of the funnel as well as the awareness stage. He believes this is because they convey to prospects how happy existing customers are with the quality of its products and service.

Quote Freek Rijken

Marketing Manager, Bamigo

## The impact of Trustpilot

### 1. Logo with star rating

We have seen that consumers say they’re more likely to trust and buy from a brand with a high Trustpilot rating. A key objective of our research was to understand the impact of different Trustpilot content elements, namely the logo and stars, TrustScore (out of five), number of reviews, and an actual quote from a customer.

As part of our proprietary research, consumers were shown a series of digital advertisements for a new cell phone plan, and asked which ads they would be most and least likely to click in order to buy.

Trustpilot star rating ads - CEU

Trustpilot star rating ads

The research found that an online advertisement with the Trustpilot logo and stars is 37% more persuasive than the same ad without them.

Another finding from the research was that consumers looking to buy something are two-and-a- half times more likely to click a Trustpilot co-branded ad with a five-star customer rating, high TrustScore, 3,000+ reviews, and a customer testimonial (compared with a baseline ad with no Trustpilot vs. branding).

As well as seeking to understand the overall impact of the full suite of Trustpilot content and the logo and stars on their own, we also wanted to explore the relative impact of different content components, namely the customer review, the TrustScore at different levels, and the volume of reviews.

Quote 2 Kyle Rao

### 2. Customer review

US consumers are 88% more likely to click through on a Trustpilot co-branded ad when it contains an authentic customer review.

Micael Saillen, CEO and Co-Founder at energy supplier Tate, has quantified adding a customer review as typically improving digital advertising clickthrough rates by 10% to 20%.

“People know brands say they are great in their adverts but when a company shows what people actually say about them, consumers know the advertiser is showing they have nothing to hide,” he says.


Example reviews in ads - CEU

Example customer reviews in ads

Quote Micael Saillen

CEO and Co-Founder, Tate

### 3. TrustScore

US consumers are 30% more likely to click through on a like-for-like Trustpilot co-branded ad when it specifies the high TrustScore behind the five-star rating. The ad with a 4.8 score performs 75% better than the ad with a 4.2 score.

Example ad trustscore - CEU

Example ad trustscore

### 4. Number of reviews

A Trustpilot five-star advert with a 4.8 score showing 500+ reviews is more than twice as compelling as an ad with no Trustpilot branding, according to our research.

example ads with number of reviews - CEU

Example ads with number of reviews

Mike Henderson is Chief Marketing Officer at SuretyBonds.com, which has a 4.9 TrustScore. He credits adding the number of Trustpilot reviews on the company’s digital advertising with delivering a 20% improvement in clickthrough rates.

Quote Mike Henderson

CMO, SuretyBonds.com

Our consumer research also shows that a Trustpilot five-star advert with 3,000+ reviews performs 10% better than the one with 500+ reviews.

According to Dan Cristo, Director of SEO Innovation at performance marketing agency Catalyst: “One of vs. our clients in the hospitality space has an average of 2,000 reviews on each property. These are real experiences customers volunteered to share with others simply because they wanted to tell their story. This desire to share experiences with others as a way to ‘pay it forward’ and help others in the community is a core part of how humans socialize.”

Quote Dan Cristo

Director of SEO Innovation, Catalyst

### 5. Impact on higher price

The research also found that a Trustpilot ad with five stars, TrustScore, 3,000+ reviews and a customer testimonial performs twice as well as the ad with no Trustpilot content, even when the price is 20% higher.

Example ads with higher price - CEU

Example ads with higher price

Adding all the possible elements of a Trustpilot rating — including logo, stars, score, number of reviews and a customer quote — is certainly paying dividends at fintech business PensionBee. Its Chief Marketing Officer, Jasper Martens, reveals the company puts all elements on its digital advertising which it credits with delivering a 15% rise in clickthrough rate.

“For us the Trustpilot logo and our score are a nudge to check us out,” he says. “The number of reviews is crucial in convincing people you’re providing a good service because if you have more than 5,000 people know it’s real, it’s very powerful. Ultimately, the customer voice is the main convincer, we believe, so customer reviews are essential.”

Quote Jasper Martens

CMO, PensionBee

### Authors

__Linus Gregoriadis – Director, London Research__

Linus is an experienced digital marketing analyst and business writer who co-founded London Research in 2017 as a sister company to Digital Doughnut, the world’s largest community of marketers and digital professionals, and also to Demand Exchange, an advanced B2B lead generation platform. He spent more than a decade setting up and building the research function at Econsultancy, a digital research and training company now owned by Centaur Media. After leaving Econsultancy, where he oversaw the production of hundreds of survey- based trends reports, buyers’ guides and best practice guides, he launched ClickZ Intelligence for B2B media company Contentive.

__Sean Hargrave – Journalist and business report writer__

Sean Hargrave is a journalist and business report writer covering media, advertising and marketing. He regularly writes for Digital Doughnut
and sister business, London Research. He also regularly writes for The Guardian, The Telegraph, and Wired on business and tech issues.

__We'd like to thank the following people for contributing to this report:__

- Kyle Rao, President and CEO, [eDrugstore.com](https://www.edrugstore.com/) / Secure Medical
- Melanie Schiller, Head of Brand Communication, [Octopus Energy Germany](https://www.octopusenergy.de/)
- Freek Rijken, Marketing Manager, [Bamigo](https://bamigo.com/)
- Micael Saillen, CEO and Co-Founder, [Tate](https://tate.it/)
- Mike Henderson, CMO, [SuretyBonds.com](https://www.suretybonds.com/)
- Dan Cristo, Director of SEO Innovation, [Catalyst](https://www.catalystdigital.com/)
- Jasper Martens, CMO, [PensionBee](https://www.pensionbee.com/)

### About London Research

London Research, set up by former Econsultancy research director Linus Gregoriadis, is focused on producing research-based content for B2B audiences. We are based in London, but our approach and outlook are very much international. We work predominantly, but not exclusively, with marketing technology (martech) vendors and agencies seeking
to tell a compelling story based on robust research and insightful data points.

As part of Communitize Ltd, we work closely with our sister companies Digital Doughnut (a global community of more than 1.5 million marketers) and Demand Exchange (a lead generation platform), both to syndicate our research and generate high-quality leads.

[Find out more about London Research](https://www.londonresearch.com/).

### Methodology

London Research was commissioned by Trustpilot to carry out a survey of 1,000 US consumers in September 2021. The nationally- representative survey included questions about sources of information and touchpoints used during the buying process, and also questions specifically about Trustpilot. A third (33%) of respondents said they were aware of Trustpilot customer ratings and reviews.

A survey-based research technique called MaxDiff was used to quantify consumer preferences when respondents were shown different combinations from a series of 10 different advertisements. Survey respondents were asked which online ads for a new cell phone plan they would be most and least likely to click in order to buy. The Appendix shows the 10 different ads shown to consumers, and the full results for the MaxDiff analysis (with relative levels of engagement expressed as percentages). The same research was carried out in the US, UK, Netherlands, Germany and Italy (5,000 consumers in total).

The value of customer ratings and reviews in advertising

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Our new report Brand integrity: the new frontier for marketing explores consumer expectations surrounding purpose-driven brands, including which social, political and environmental stances make them more or less likely to buy from or recommend a brand.

The consumer research uncovers: 

- How much a brand’s purpose matters to consumers today
- The top social, political and environmental stances consumers consider when making a purchase 
- Which factors make consumers less likely to buy from a brand
- Which information sources consumers check to find out if brands live up to their claims 


Brand integrity: the new frontier for marketing

Trustpilot - building trust in financial services

Trustpilot - Building trust in financial services

Companies with familiar names used to be able to rely on consumers to trust them but they now face a wave of disruption. They must work harder than ever to earn that trust.

The global financial crisis of 2008 placed a huge dent in the public’s trust of financial services providers. The brands that had lectured consumers on fiscal prudence were suddenly exposed and, in some cases, needed taxpayer bailouts.

Over that same timeframe digital technology has empowered a fintech revolution, with new brands providing innovative online and mobile services built around delighting customers rather than plodding along with legacy technology and organisational silos. Established brands have had to raise their game to keep up.

__The resulting increase in choice begs the question: how do consumers know whom to trust?__ London Research, working in association with Trustpilot, has
produced this report based on a survey of 1,000 consumers in five different markets: the UK, the US, France, the Netherlands and Italy.

The research has found that advertising is not particularly trusted by consumers for choosing financial services providers when used in isolation. __Instead, trust is primarily established through two main sources of information, the brand’s website and customer ratings. __

## 1. Whom to trust. Bankers, ad execs or consumers?

According to a London Research survey of 1,000 consumers, carried out exclusively for Trustpilot across five different countries, the deterioration in trust in financial services is still evident, even a decade on from the financial crisis. __Consumers are 50% more likely to say that their level of trust in financial services providers has decreased rather than increased over the last three years__ (30% versus 20%, see Figure 4 below).


In the age of the fintech revolution, the question on all financial service providers’ lips is how can they build or repair a trusting relationship with consumers, and through which means?

Brands who look at this conundrum have two major challenges if they decide to advertise their way into the consumer’s heart. Trust in bankers, and by implication, financial services more broadly, is low and ad executives behind campaigns are the least trusted of all professions.

That is according to the [2018 Ipsos MORI Veracity Index](https://www.ipsos.com/ipsos-mori/en-uk/advertising-execs-rank-below-politicians-britains-least-trusted-profession) which further warns that if brands were to switch tactics and get a PR to convince newspapers
to write good things about them, they hit another snag. Journalists are only trusted by one in four people.

Clearly, the answer to convincing the public a financial services brand is trustworthy is to rely on the ‘ordinary man or woman in the street’ who is trusted by 62% of the population, according to Ipsos.

This realisation shifts the onus for brands from paying for awareness to engendering positive ratings among consumers through providing best-in-class customer experiences. Devise an exciting proposition, execute it brilliantly to delight customers and they will tell peers what a great service they enjoy — both through word of mouth and its digital equivalent, ratings and reviews. 

## 2. Customer journey focus underpins trust

Trust in financial services is largely maintained through the work of industry regulators, including the Financial Conduct Authority (FCA) and Financial Services Compensation Scheme (FSCS) in the UK.

However, while this may help to engender faith in the industry as a whole, trust in individual companies is best established through understanding and
influencing the user journey, suggests financial services marketing expert Sanjit Badhan, formerly Head of CRM at money transfer company TransferGo.


Formerly Head of CRM at TransferGo

“That means trust is interwoven with customers’ learnt behaviour. There’s now more choice, but how do you get over that inertia and convince people it’s worth looking around and committing to one of these new exciting providers?

“For me, the key is a better user journey. Too many new brands are just intent on acquiring new customers, and they don’t devote as much time and effort to providing an excellent journey and customer experience that builds trust.”

Badhan believes that financial service providers need to be clear about their proposition in terms of whether they are price-led or experience-led. Either is fine, and will build trust, but consumers need to know which side of the price or service fence a brand sits on.

“You can be the brand that can’t be beaten on rates or you can be the brand that empowers customers to get on with their lives through the best service available,” he says.

“Brands have to be able to show which they are. Too many brands are trying to be both but it’s too expensive to offer the best service, a smart app in
every language available with telephone support, as well as not being beaten on price. Brands need to choose a side. Consumers understand, and they will pick which is more important to them and build trust around how well the company delivers its brand promise.”

## 3. Where do people find trust?

Financial services decisions used to be very simple. Most people would visit a local high street bank or call a highly familiar provider that had been in
business for generations and was likely to have been patronised by friends and family.

This centuries-old model has now been replaced by digital disruption through the fintech revolution.

However, our survey shows that the most important source of information in this new landscape is still what a company says about itself and, just like in the days of word of mouth, what other people say about
the provider and its service.

As can be seen in Figure 1, __the top influencer for consumers is the company’s website (rated as ‘very important’ or ‘important’ by 68% of consumers), followed by consumer ratings and reviews (61%)__. In fact, ratings and reviews are more trusted by consumers making decisions relating to financial services and products than aggregators and search engines.

It is understandable that many brands surrounded by so many new names are trying to raise awareness, but our findings show that consumers are around three times as likely to regard the company’s own website and consumer ratings as ‘very important’ than for TV advertising, online display ads and social media.

Conversely, people are three times more likely to ascribe zero influence to TV and online advertising over their financial product decisions, compared to ratings. The same applies to social media, only five times over.

## 4. Data-driven services delight customers

The question around trust, then, is less about what brands say about themselves in traditional and digital advertising channels. Instead, it is more a case of what they can convey on their websites and apps, and how they back that up with high levels of service.

For Duncan Leslie, Head of Product Experience at investment platform Hargreaves Lansdown, this means the key to getting customers to trust a financial services brand is customer experience. This requires helpful customer services experts, available online and on the phone, but that is just the start.

In his experience, a brand needs to build a service around focusing every use of technology on customer needs. The benchmark is being set increasingly higher by companies in all sectors beyond banking, he warns.

“Expectations aren’t just set by financial services providers, they’re set by the likes of Amazon, that’s how simple and convenient you have to be to use,” he says.

“We use a lot of data from our customer interactions to understand what customers want and how we can give them the best experience possible. One
key learning from this approach was realising our first mobile app was a little ‘flat’. It offered a bit of everything, even though the data showed most people just want the quickest way to get logged on and check their balances.”

The result was a reworked, simpler app that allowed people to check in and out conveniently but can still offer further information for those wanting to explore further. It is here that the brand’s customer experience strategy is focused around intuitively knowing what the client is most likely to be interested in.

“We’re constantly updating our app and online service by using machine learning to understand what type of customer is logging on, and what they might be most interested in,” says Leslie.

“That way, we can personalise offers of additional products around their likely understanding and comfort with financial products. A seasoned investor may be shown a product that requires more understanding and confidence than someone who is less au fait with financial products.”

## 5. Relevance is key to personalised customer experiences and trust

Almost __two-thirds of consumers (63%) agree that financial services providers personalise the online experience with relevant information and recommendations based on their needs__. 

Figure 6

Building products and services around the customers they serve is the new mantra all financial services operators must adhere to in order to be successful, according to Firas Khnaisser, Head of Decisioning at Standard Life.

He lives by the simple rule that “the customer has to be at the heart of everything we do”.

“Although we’re an established name we try to think like a start-up when we’re looking at delivering new products and services", he says. "It helps us to not get tangled up in organisational silos, processes and technology, and to really put ourselves in the customers’ shoes.

“We have invested significantly in our data, analytics and customer engagement capabilities. This allows us to develop a deeper understanding of our customers which allows us to better deliver against their needs. 

"We first used this capability in the marketing space but now we see it being used across the whole organisation, from customer service and operations, to sales and distribution, to fraud prevention. This goes to show that for good customer experience to happen the entire company needs to be pulling in that same direction.”

He says the data and technology available to the business allows them to have more relevant, timely and personalised interactions with their customers across multiple touchpoints.

“Organisations that are able to leverage the data and the technology available to them are able to deliver a far superior experience to their customers which will, in turn, deliver better business outcomes,” he adds.

Khnaisser agrees that online reviews give increased transparency into the type of service customers could expect to receive from a brand. __The more
transparent brands are, the easier it becomes for customers to trust the brand.__

## 6. Consumers base decisions on ratings

Our research shows that three-quarters (75%) of respondents agree that positive consumer ratings would make them more likely to become a customer of a bank, compared to only 9% who disagree (Figure 2).

The importance of consumer reviews hasn't escaped the attention of challenger banks, including [Atom Bank](https://uk.business.trustpilot.com/customer-stories/finance-insurance/how-atom-bank-achieved-their-5-star-rating-on-trustpilot), which displays its Trustpilot rating on its home page with the number of 'excellent' ratings constantly updated.

Head of Marketing at Atom Bank

“We don’t really advertise but I always think brands like Purplebricks, that also include their ratings scores in their advertising, are really smart. There’s no better way of transparently showing the public what other consumers think of you than proudly displaying those stars. It shows you’ve got nothing to hide, that you can be trusted.”

Costello believes that many of the most familiar names in financial services, who were the only choices before digital disruption came along, are hamstrung by concerns the reviews may not be too favourable.

“The trouble is, they may well have far too many bad reviews in the past that are holding back their averages and they may be worried by more coming in which they are not set up to deal with.”

Ratings are not just critical for choice of bank but across every service a financial services company provides. Mortgages are slightly ahead as the
product where most consumers seek confirmation from ratings (Figure 3). However, it is worth noting that more than half of consumers regard ratings as at least ‘important’ for choosing a wide range of products, including loans, credit card, pensions, life insurance and an investment platform. 

## 7. Ratings improve customer service

The cornerstone of a great customer experience is good customer service. This is where money transfer business Azimo believes it gets some of the best value from embracing reviews.

Its Head of Digital Marketing, Laura Bent, points out that in addition to reviews showing a brand is willing to have a transparent, open and honest relationship with its customers, there is also a lot to learn from what customers are saying.

The brand carries out regular Net Promoter Score studies to understand what consumers are thinking about its products and services, but these are, by definition, internal reviews. By displaying ratings on its home page, she believes Azimo is able to join in a conversation with consumers and show that it is willing to deal with any issues that arise. 

“Reviews and ratings are a great tool for both listening to our customers and then acting on those insights,” she says.

“We show ratings in real time and so if a customer has a concern we can deal with it there and then. That’s very useful for showing that we’re not just
there to show five-star ratings, but we’re also actively looking to address problems and put them right. It’s the best way to be open and honest but also helpful.”

Azimo displays customer reviews prominently on its website. 

Azimo example

## 8. Conclusion– Unlocking digital word of mouth

Success for financial services providers is no longer guaranteed by being a familiar name. Across every financial services niche, consumers are being offered a plethora of products and services by disruptors focusing on a better customer experience and personalisation of services.

And yet the old-fashioned way in which people have traditionally selected financial brands they trust is still alive and well. The big change is that word of mouth is now accompanied by its digital equivalent, ratings and reviews.

These are far more influential in consumer decisions than traditional and digital advertising channels and are second only in building trust to a brand’s own website.

A home page with ratings prominently displayed, then, combines the two most effective ways of showing consumers that people trust a brand. If a company is open and transparent in its relationship with the public, it will happily point to what people are saying about it in real time.

Atom Bank displays its five-star Trustpilot rating above the fold on its home page. 

Atom Bank Example

*__Please note that this report was written in April 2019 and optimised in December 2020.__*

Figure 5

Figure 7

Figure 8

## Methodology & Acknowledgements 

London Research was commissioned by Trustpilot to carry out a survey of 1,000 nationally representative consumers in January 2019. The sample comprised 200 respondents in five different countries: the UK, the US, France, the Netherlands and Italy. The survey was conducted using a Toluna research panel. London Research also carried out interviews for this report.

London Research and Trustpilot would like to thank the following people for their insights.

__Sanjit Badhan__, consultant and former Head of CRM, TransferGo

__Laura Bent__, Head of Digital Marketing, Azimo

__Neil Costello__, Head of Marketing, Atom Bank

__Firas Khnaisser__, Head of Decisioning, Standard Life

__Duncan Leslie__, Head of Product Experience, Hargreaves Lansdown

Building trust in financial services

Truspilot 5 trends that will define the future of fashion

Trustpilot 5 trends that will define the future of fashion

A survey from London Research and Trustpilot has shown that fashion shoppers are more cautious on spending this year, and are also acutely aware of the need to buy items from fashion brands with strong ethical and sustainability practices.

[London Research](https://www.londonresearch.com/) and Trustpilot's latest international survey has shown that not only are fashion shoppers more cautious on spending this year, they are also acutely aware of the need to buy items from fashion brands and retailers with strong ethical and sustainability practices.

Fashion brands and retailers now have an opportunity to reach out to consumers who are actively seeking to shop from companies that are kind to the people working in their supply chains, as well as the environment.

Those seeking to market themselves to modern shoppers need to listen to what consumers have revealed they are looking for in sustainable and ethical brands, as outlined in this research.

### Five key trends that will define the future of fashion brands

__1. Four in five customers are led by ethics__

Size and fit are not the only priorities. Fashion brands and retailers need to be aware that treatment of workers across their entire supply chain and environmental footprint are now a vital part of a customer’s purchasing decisions. 

More than four in five customers (82%) reveal they would definitely (31%) or probably (51%) stop buying from a brand found to be lacking ethical standards. 

__2. Shoppers are cautious on spending__

The recession looming over the global pandemic is shaping fashion spending habits. Just under three-quarters of consumers (72%) are spending less or the same as they did before.

As befitting markets where many are working from home, casual clothing and leisurewear is the category with the highest proportion of consumers having increased spend (21%). This figure is nearly double that seen in formal wear or luxury items.

__3. Fashion shoppers trust reviews and each other__

Consumers are eager to seek out fashion brands and retailers with solid ethical and sustainability strategies.

They are getting advice on which brands meet these criteria from many sources, but they trust each other above all else – 89% of consumers have a high or medium trust level in word of mouth and 85% in ratings and reviews.

The levels of high trust placed in word of mouth and reviews are two to three times greater than other sources, such as magazines, advertising and brand websites. The least trusted source is celebrity influencers. People are three times as likely to highly trust ratings as they are a well-known figure touting a fashion product on social media.

__4. Fashion shoppers are acting on a brand’s ethical record __

The research found brands must not think of ethics as an issue to be addressed in the future. Shoppers are already acting on their concerns right now. More than half (54%) of consumers say that coverage of working conditions and sustainability policies has influenced where they buy, or don’t buy, fashion items.

Nearly as many (41%) have been steered by coverage of a fashion retailer’s diversity and inclusivity policy and 33% by a brand pretending to be ethical but not backing it up with real action (‘slacktivism’).

Given that consumers trust word of mouth and customer ratings three times or two times (respectively) as much as the media, savvy brands should realize the need to communicate how their ethical and environmental strategies match the modern shopper’s concerns. This way, those credentials are more likely to be reflected in customer conversations and ratings.  

__5. Brands can tap into consumers’ ethics and sustainability wishlist__

Customers have revealed what they want to see from fashion brands and retailers. Joint top spot (46% each) goes to a commitment to good working practices throughout the supply chain as well as to environmentally-friendly packaging. A recycling service (41%) was just behind in third place.

Feeling inspired? Let's dive in!

## Introduction – cautious consumers tell brands their values are more important than discounts

Consumers are changing their mindset and behavior when it comes to buying clothes, and the effects are set to be profound for fashion brands and retailers.

The national and local lockdowns caused by the coronavirus pandemic have accelerated a change in attitude among shoppers to be more caring for one another and the environment. Communities have come together to fight a common foe and taken stock of the values they find important to them, which they want to see reflected in the brands they buy from.

This prompted London Research, in association with Trustpilot, to ask fashion consumers in the UK, the US, France, the Netherlands, Italy and Sweden to reveal the importance of brand values around issues such as sustainability, working conditions and diversity. What principles do they expect fashion brands and retailers to live up to? 

Just as importantly, how do they know they are truly committed to these causes, and whom do they trust in making those judgement calls?

### Sustainability over discounts

[Research from McKinsey](https://www.mckinsey.com/industries/retail/our-insights/survey-consumer-sentiment-on-sustainability-in-fashion) has already shown lockdown has forced fashion consumers’ priorities to change. They now place the welfare of employees and supply-chain workers, as well as protecting the environment, way ahead of being offered promotions and discounts.

This points to a significant change in consumer priorities, according to fashion writer Olivia Pinnock. She has created a series of events, called [The Fashion Debates](http://www.thefashiondebates.com/), through which the industry can come together to discuss how to clean up an industry with a poor record on worker conditions and sustainability.

“We had the sweatshop scandals of the ‘80s and ‘90s but the issue seemed to have been swept under the carpet,” she says.

“Now, though, we’ve got a generation who realize they can’t ethically buy a T-shirt for £5 when there are so many people in the supply chain to pay. There are also a lot of executives who are pushing for real change because they have been shocked by the industry’s record and don’t want to be a part of it any more.”

Pinnock believes the push for change is real and is relying on changing attitudes among shoppers. However, there are two major challenges.
“Fast fashion’s cutting corners on worker rights and the environment has got us all used to cheap clothing,” she explains.

“It’s skewed our perception of cost. Then there’s availability. The vast majority of clothes, outside a pandemic, are bought in stores and it’s only the big chains, who are highly competitive on price, that can afford to roll out chains of shops in every town.”

### Consumers are cautious on spend

It is not surprising that in the midst of the global coronavirus pandemic, the majority of respondents are not spending more on fashion. Instead, they are maintaining previous spending patterns or cutting back. 

On average, 28% of respondents say they are spending more. That leaves exactly a quarter who are spending the same amount as before (25%) and nearly half (47%) who reveal they are cutting back (Figure 1).


Figure 1: How has the coronavirus pandemic impacted your overall monthly spending on fashion and clothing products?

As shown in Figure 2, the standout category for increased spending is casual and leisure clothing (21% of consumers), nearly double the percentage of respondents spending more on luxury apparel (11%) and significantly more than the proportion of consumers increasing their outlay on smart clothes (13%).

Across all international markets surveyed, those going through lockdown and social distancing measures have clearly been prioritizing comfortable attire for home use over spending on formal clothes for the office or expensive luxury items for big nights out.


Figure 2: How has the Covid-19 crisis impacted the amount you’ve spent on the following types of fashion and clothing products?

- Consumers in the US are more likely than those in other countries surveyed to be increasing their spending on casual clothes (28%), footwear (20%), smart fashion (20%) and luxury products (15%) (Figure 9, see appendix).
- The UK, on track to have its worst economic downturn on record, leads the way for the most cautious shoppers. Just over a fifth (22%) reveal they’ve been cutting fashion spending by more than half (Table 1, see appendix).

### More careful? Or more thoughtful?

Consumers are clearly cautious when it comes to fashion spending. It will become clearer when the developing global recession caused by the global pandemic eases whether this is an economic decision or an environmental choice.

Dialing down consumption is what Olivia Pinnock refers to as ‘the elephant in the room’. In addition to looking out for fair trade labels and commitment to ethical and environmental standards, she believes modern consumers will soon realize they need to buy fewer clothes.

It is a message echoed by Laurel Wolfe, VP of Marketing at deferred payment platform [Klarna](https://www.klarna.com/).

“The pandemic has made us all think carefully about how, where and why we shop - whether that's online instead of in-store, or with smaller, local brands.” she says.

“For us, this has meant helping people be mindful consumers, to ensure they buy items they will truly use and love. We have been running campaigns, particularly with thought influencers, echoing the money management advice on our site and asking shoppers to ‘think thrice’. Do I love it, will I use it, is it worth it?” 

The message underlines how the market is evolving to row back from the days of fast fashion by being more considerate in how workers in the supply chain are treated and mitigating the industry’s impact on the environment.

## People trust ratings and each other, not celebrities and magazines

People are clearly cautious about their spending, given the massive uncertainty hanging over the global economy. With budgets curtailed, consumers are looking to make sure the items they buy are right for them. This no longer means right look, size and price.

As shown through our survey, customers are attracted to brands that share their ethical values and are kind to their workers and the planet.
With ethics, sustainability and environmentalism playing a large part in purchasing decisions, who are people trusting for guidance on purchasing decisions?

Here, the research provides a resounding answer. Consumers trust one another. Word of mouth from friends and family is the most trusted source, with 44% rating their trust level as ‘high’. Consumer ratings and reviews (36%) is a close second (Figure 3).


Figure 3: How would you describe your level of trust in the following sources of information when you are researching fashion products and retailers?

In all, 89% of consumers have a high or medium level of trust for word of mouth compared to 85% for ratings and reviews.

The two categories are two or three times as highly trusted as other high-profile sources of fashion information, such as magazines, advertising and social media.

Fashion is an industry filled with well-known designers, models and celebrities who are reported on daily for what they are wearing. However, a key takeaway from the research is that celebrity influencers are poorly trusted as a source of information by nearly two in three consumers (63%).

The research could not be any clearer. Consumers want to make the right decision on fashion, for fit, price and look as well as sustainability and ethics. When it comes to making these decisions, they trust one another’s spoken advice or ratings much more highly than the world of social media and advertising where brands pay a fortune hoping to be noticed.


The Savile Row Company website, displaying the company's Trustpilot rating. This research shows that ratings and reviews, along with word of mouth, are the most trusted sources of information.

The Savile Row
Company website,
displaying the
company's Trustpilot
rating. This research
shows that ratings
and reviews,
along with word of
mouth, are the most
trusted sources of
information.

- The US and Italy stand out as the markets where reviews are most highly trusted (43% of consumers) (Figure 10, see appendix).
- Sweden and the Netherlands show the highest trust for word of mouth, for nearly half (49% and 48%, respectively) of consumers (Figure 10, see appendix).

## Customer loyalty depends on ethics

Everyone needs clothes and it is fair to say that the driving force in purchasing decisions will depend on garments matching an individual’s sense of style and budget. Increasingly, however, image and price point are being joined by a new criterion. Customers want to know a business shares their values.

More of us want to know a business is run ethically and that it tries its best to ensure people in its supply chain are treated with respect and paid properly, while attention is paid to sustainability.

One of the major takeaways from this research is that more than four in five customers (82%) would either ‘definitely’ (31%) or ‘probably’ (51%) stop buying from a brand that was found to lack ethical standards (Figure 4).

Figure 4: Would you stop buying from a brand or fashion retailer you knew to be lacking ethical standards?

The finding should serve as a warning to brands who have yet to put ethics at the heart of their brand strategy. While nearly a third would definitely withdraw their business if non-ethical practices were discovered within the business or wider supply chain, half of the market would consider it.

This is not only a hypothetical question. For any fashion brand wondering when the market will evolve to a point where bad press around their ethics will lose them customers, the answer is we are already there.

More than half of consumers (54%) say that coverage of working conditions and sustainability policies has influenced which brands they buy or don’t buy fashion items from (Figure 5). Nearly as many have been steered by a fashion retailer’s diversity and inclusivity policy (41%) and 33% by a brand pretending to be ethical but not backing it up with real action (‘slacktivism’).


Figure 5: Has positive or negative coverage relating to any of the following issues impacted where you buy (or don’t buy) fashion and clothing items from?

Sophie Slater, who co-founded online women’s ethical fashion business [Birdsong](https://birdsong.london/), is not surprised by the findings. The company’s workers in London are paid the London Living Wage to produce garments made from organic cotton which are packed by a charity supporting adults with learning difficulties. Protecting staff from Covid meant closing down production, which has relied on customers accepting delays in deliveries because ethical fashion is not fast fashion.

“We’ve seen fashion businesses talk about sustainability for the past few years but the last year or so has definitely seen a rise in people thinking about ethics,” she says.

“People have seen how workers are treated in sweatshops in Leicester (in the UK) by well-known brands… there’s been a lot of bad press for fast fashion. We rely on good press and social media to get our message out to people who are motivated by social inclusion and treating people ethically and so will pay a little more for clothes made by people paid the London Living Wage.”

- Italy is the clear leader in customers making decisions based on media coverage (Figure 11, see appendix). More than three in four have been influenced by stories about a brand’s ethics (79%) and working conditions (77%). Perhaps this is a result of the country being the EU’s biggest producer of clothing so environmental impact and working conditions are factors that are far closer to home for Italian shoppers.

## Trust – winning over the ‘moderately trustful’ half by being kind to workers and nature

The good news for the industry at large is that more than a quarter of consumers (28%) have a ‘very’ (9%) or ‘quite’ (19%) high level of trust in fashion brands and retailers in terms of their ethical standards (Figure 6).

The bad news is this is negated by a quarter of the market (26%) which has a ‘very’ (7%) or ‘quite’ (19%) low level of trust. This leaves almost half of consumers (46%) sitting on the fence, with only a moderate level of trust in the industry.

Figure 6: How would you describe your level of trust in fashion brands and retailers in terms of their ethical standards?

With a quarter of the market trusting the industry and a quarter not trusting it, the battleground is clearly winning the hearts and minds of the remainder who are fairly neutral.

Given that four in five respondents have also revealed they are ready to dismiss a brand which treats workers or the environment disrespectfully, the focus should be on convincing customers with a moderate level of trust that a brand is truly committed to treating its workers and the planet with respect.

There are some novel ways of improving trust being deployed at eco-friendly fashion brand [SANVT](https://sanvt.com/) (which means gentle on nature in German). The company’s Head of Marketing and Co-Founder, Benjamin Heyd, reveals the company is dedicated to working with suppliers who use organic cotton and do not use toxic chemicals in the dyeing process. To underline the point, they have an unusual approach to transparency and promotions.

“We keep our environmental impact low and our ethical standards high by using a factory in the EU, in Portugal,” he says.

“We offer a virtual tour of the factory so people can see for themselves the high standards we adhere to. We also don’t run sales promotions, we just offer to plant more trees within our carbon offsetting program when people buy promoted items. I don’t think we’re quite at the point yet where sustainability is the most crucial part of a customer choosing a brand, compared to the design and fit of clothing. However, in the long term, we are definitely getting there and brands will soon need to be able to show consumers they are eco-friendly and ethical.”

- Sweden and the Netherlands stand out as the markets with the lowest opinion of fashion brands and retailers. In each market, only 4% trust them highly. France is close behind with a high level of trust reaching just 5%.
- The US has the biggest level of ‘very high’ trust in fashion brands and retailers at 14%, backed up by a 20% level of ‘quite high’ trust.
- Overall, Italy is the most trusting nation, with more than a third (39%) of consumers having ‘very’ (8%) or ‘quite’ (31%) high trust levels.

## Customers need ethical and sustainable fashion brands

It is clear today’s fashion customer is starting to look for more than items that suit their style. In particular, they are committed to avoiding brands found to be acting in a non-ethical and unsustainable way. They are also expecting brands to embrace diversity and inclusivity.

So, what does this mean in practice? What are the strategies, commitments and services modern customers are looking to see more of in the future from fashion brands and retailers? When allowed to suggest three proof points that companies are walking the proverbial walk, what do they pick out?

Joint top, for nearly half of respondents, was commitment to good working conditions throughout the supply chain (46%), along with environmentally-friendly packaging (also 46%). A recycling service (41%) comes in third place, with clothes made from recycled materials (38%) and initiatives aimed at reducing the carbon footprint (36%) completing the top-five wishlist (Figure 7).

Methodology note: Respondents could select up to three options.

Figure 7: What three things would you like to see more of in the future from fashion brands and retailers?

For menswear brand [The Savile Row Company](https://savilerowco.com/), it is not a major surprise that environmentally-friendly packaging tops the list, alongside ethics. 

Marketing Director Lee-Anne Harris reveals the business has replaced plastic with biodegradable and potato starch bags, with shirt collars and shoulders held in place by paper fasteners rather than the traditional plastic clips.

“The data we’re getting from our Trustpilot reviews shows customers are reacting well to orders arriving in recyclable paper packaging and a biodegradable bag,” she says.

“We didn’t ask customers first; it was just a no-brainer for us because it’s how we want to live and we were pretty sure it’s how our customers want to live as well. It’s more a question of why wouldn’t you? It’s just a base level of decency.”


The Savile Row Company has replaced plastic packaging (left) with a recyclable paper bag (right).

Despite the uptick in positive reviews, Harris confirms recyclable packaging is still a feature that customers appreciate rather than demand as standard. However, she believes it is only a matter of time before customers “truly hold fashion companies to account for their record on plastic waste”. Hence it makes sense to be prepared in advance.

- American customers are way ahead of their European counterparts on the values they want to see from fashion brands and retailers which did not make the top-five list above (Figure 12, see appendix). These include working with charities (35%), offering inclusive product ranges (27%), ensuring diversity in advertising (26%) and taking a stance on social issues (24%).
- It is likely a result of the deep social issues Americans are examining in the year the Black Lives Matter (BLM) movement gained massive national, and global, traction. Support for brands taking a stance on social issues, including BLM, is more than twice as high in the US as it is in all other countries surveyed, other than Italy.

## How brands can embrace ethics and sustainability

They know their size, they know their style and they have a good idea of what they are starting to want to see from fashion brands and retailers. But what indicators are customers looking for to find out if a brand shares their values on treating people and the environment with dignity and care?

The challenge for companies is there is no single standout attribute consumers are seeking out. Instead, there are four key drivers of trust which are being actively sought out by a little over half (58% and 59%) of fashion shoppers (Figure 8).

Respondents reveal transparent values and policies, fair trade badges and certification, on-site and off-site ratings and reviews are equally as important, on average.


Figure 8: Do you look for any of the following to give you confidence that you are buying from an ethically responsible fashion brand or retailer?

These are areas high on the radar for luxury online fashion retailer [FARFETCH](https://www.farfetch.com/). Its Director of Sustainable Business, Thomas Berry, explains the fashion brand not only helps customers make more ethical and sustainable purchases, it also has reselling schemes to extend an item’s life.

“As part of Positively FARFETCH, we have an extensive Conscious collection which customers can shop, using either filters, or our dedicated edits, to ensure they’re getting items that meet good independent sustainability standards and certifications,” he says.

“We also have two service offerings that help our customers extend the life of unused clothes. FARFETCH Second Life is a resale service, where customers submit their old hand-bags, get a price quote, we arrange a pick-up slot and, once the item is verified, the quoted price is added as a credit to their FARFETCH account.

“We do the same with our FARFETCH Donate service, where a customer fills a bag with any fashion item they no longer want, the items are sold in aid of their chosen charity, and customers get a third of the proceeds as FARFETCH credit. In both cases someone else gets to enjoy the items so everyone’s doing their bit to help the environment by reducing overall consumption of 'new' items."

The proof that customers are now looking to make more sustainable and ethical purchasing decisions comes from Berry revealing that the Conscious range is growing at a significantly faster rate than all other sales through the site. Additionally, across the industry, he estimates new clothes sales are predicted to grow at most around 3% whereas clothing resale growth is in the 15%-30% range.

## Conclusion

The primary motivators in fashion will likely always be the look, feel, design and price of an item. However, there is a growing consideration to filter fashion brands and retailers according to their action on sustainability and ethics.

This was always bubbling under the surface but it would appear the global pandemic has prompted consumers to take stock of what is important and to value brands who treat their workers and the environment with care and respect.

Research coordinated by Cardiff University found, for example, that the proportion of Britons who believe tackling climate change is urgent rose from 62% to 74% between August 2019 and August 2020. Additionally, nearly half the UK population (47%) is now vowing to fly less than before once restrictions are lifted. In the US, media reports have suggested taking a step back from the daily grind of driving to work has seen air pollution drop by 30%.

These issues should resonate with fashion brands and retailers, given that four in five consumers reveal they would not shop with a brand that lacked ethical and sustainable values. Hence, half of consumers have already revealed they have avoided fashion companies that have received poor media coverage over their ethics and sustainability record.

__Consumers have spoken clearly. They want brands to:__

- Treat workers throughout their entire supply chain fairly
- Produce clothes without damaging the environment
- Use recyclable packaging
- Embrace recycling schemes which extend garments’ lives
- Work hard on carbon reduction measures
- Operate according to transparent brand values

These are the action points fashion brands and retailers need to embrace to win over the half of the market that currently only trusts the industry to a moderate degree and the quarter which does not trust them at all.

When it comes to trust, they need to remember fashion shoppers highly trust one another’s advice and online reviews two to three times as much as glossy magazine articles, social media and advertising. As for celebrity influencers, these are the least trusted source available to fashion marketers.

The message is clear. Consumers want to see sustainable and ethical fashion, and they place their trust on which brands match these values in word of mouth and reviews, not the media and most definitely not on what celebrity influencers are paid to say.

If you'd like to find out more about Trustpilot, and how social proof can help you build trust with consumers, request a free demo below.


### Methodology

London Research was commissioned by Trustpilot to carry out surveys of 2,800 nationally representative consumers across the UK (n=1,000), US (n=1,000), France (n=200), the Netherlands (n=200), Italy (n=200) and Sweden (n=200) in September 2020.

The research was conducted using a Toluna research panel. London Research also carried out a series of interviews for this report.

### Acknowledgements

London Research and Trustpilot would like to thank the following people for their help in compiling this report:

- Thomas Berry, Global Director of Sustainable Business, FARFETCH
- Lee-Anne Harris, Marketing Director, The Savile Row Company
- Benjamin Heyd, Head of Marketing and Co-Founder, SANVT
- Olivia Pinnock, Fashion Writer and Creator of The Fashion Debates
- Sophie Slater, Co-Founder, Birdsong
- Laurel Wolfe, VP Marketing, Klarna

Why ethical fashion brands are future-proof

Health-and-Beauty-Hero - smaller

Combating misinformation in the health and beauty sector

Buying the right health and beauty products can be a minefield at the best of times, with consumers wasting millions each day on health and beauty products that are counterfeit, substandard and in many cases bought on the basis of fake reviews. 

## The cost of fake reviews and counterfeits

The harsh reality is that the products may well be counterfeit. This means customers have not only wasted hard-earned money on a fake product, they could also be risking their health.

If you need to get a hook on why people should be concerned about fake health and beauty products, a good place to start is the Netflix documentary ‘[Broken: Make-Up Mayhem](https://www.netflix.com/title/81002391)’.

In the show, police investigators and doctors list the heavy metals and carcinogens they have found counterfeiters use to create cheap copies of expensive ingredients. At one level, these cause skin diseases, such as dermatitis, impetigo and pustules. At the other extreme, heavy metals can cause fertility issues and lead to miscarriages. One interviewee revealed how a counterfeit Kylie lipstick got its shiny appearance from superglue which stuck her lips together.

### COVID-19 exacerbates the problem

Covid-19 is raising the stakes, considerably. Legitimate businesses and industry experts know that regardless of what is happening to the economy, consumers still want to feel good about themselves. When official outlets they trust run out of stock, as global supply chains come unstuck, even savvy consumers can be tempted to check out online stores they may not totally trust.

Wellness and beauty industry influencer and ITV This Morning guest presenter, Gina Akers, has warned of the dangers of counterfeit products on BBC’s ‘Fake Britain’ television show. She believes many consumers, especially young people, want to look like their favorite celebrity, but cannot afford the high-end prices required. When you add reputable stores running out of stock, you have a counterfeiter’s dream scenario.

*“The big issue is the celebrity influencers have their own lines of cosmetics which are high end and are prone to running out of stock, particularly with the supply problems around coronavirus,”* she says.

*“Young people wanting to look like these celebrities are sorely tempted to get something cheaper from somewhere online that claims to have stock. But they’re often fake and, even worse, they have been made in unsanitary conditions. My advice is that if it’s too good to be true, it probably is. Always buy from a reputable store.”
*

### Market overview: spending is up, so is waste

The [coronavirus pandemic](https://business.trustpilot.com/reviews/learn-from-customers/consumer-behavior-in-the-age-of-coronavirus-global-review-trends-by-industry) has prompted a significant leap in spending in the health and beauty markets. According to our research, 59% of US consumers and 55% of UK consumers say they are spending more on health products due to the coronavirus crisis.

Around a quarter of survey respondents in both markets (26% in the US and 25% in the UK) reveal they are spending more on beauty. As seen in Figure 1, almost half of those consumers spending more on beauty across both markets suggest the extra spending is rooted in wanting to treat themselves (45% in the US and 51% in the UK).



Why consumers have bought more health and beauty products as a result of lockdown and the coronavirus pandemic.

Figure 1: Why consumers have bought more health and beauty products as a result of lockdown and the coronavirus pandemic.

In unprecedented times, both American and British consumers (42% and 40%, respectively) are spending more because they fear that stocks could run out if they do not make a pre-emptive purchase and there is clearly a desire under lockdown to stay healthy and feel good about oneself through a treat purchase.

Consumers are also spending more because salons are closed (45% in the US and 35% in the UK).

In the health category, both markets are clearly showing the impact of the coronavirus pandemic and subsequent lockdowns. The most popular products so far this year have been hand sanitizer and soap, with pain relief, vitamin supplements, and prescription and over-the-counter medicines following closely behind (Figure 2).

Figure 2: Which health-related products have you bought since the start of this year?

A third of consumers in the UK and around two in five in the US had already bought plastic gloves and face masks when our survey was carried out in April. This is a new market for both countries which have no tradition of wearing face coverings in public, unlike some parts of Asia. This category will continue to grow as lockdown measures are relaxed, the use of face masks becomes increasingly recommended or enforced, and anxious members of the public return to busy public areas, particularly on public transport.

In beauty, hair and skin care are the most popular categories for spending so far this year in both the US and the UK, with bathing accessories, foot, hand and nail care, fragrances and makeup not far behind (Figure 3).

Which beauty products consumers have bought since the start of the year

Figure 3: Which beauty products have you bought since the start of the year?

The closure of retail outlets has led to an increase in online sales for health and beauty products

The closure of retail stores due to coronavirus has led to an increase in online sales, especially for health and beauty products

The closure of retail stores has led to an increase in online sales

According to Meghan Stabler, VP of Global Product Marketing and Communications at ecommerce platform [BigCommerce](https://www.bigcommerce.com/), ecommerce spending has increased significantly in 2020 as consumers are forced to rely on digital channels during lockdown.

She said: *“Whether specific to health and beauty, or looking broadly across industries, we’ve seen surges in ecommerce since the start of mass shelter-in-place guidance began in March. Consumer spending online has grown significantly year over year, with some recent days even topping sales numbers from Cyber Week 2019.”*

*“Though we expect YoY increases to remain strong for the foreseeable future – particularly in categories deemed essential like health and beauty – looking at week-over-week trends shows more consistency in sales numbers, indicating that consumers are finding their ‘new normal’ and pandemic panic-buying may be levelling out. We’ll continue to see slight shifts in consumer behavior alongside public health guidance, though one thing has been made crystal clear: ecommerce has cemented its role as a modern-day shopping staple, and will likely serve as a long-term foundation for the way customers interact with brands across channels.”*

The picture that emerges in both the US and the UK is of consumers significantly increasing their online spending on health and beauty products. This is attributable to anxiety surrounding the coronavirus outbreak. Anxious consumers reveal they want to secure favored items as shops are temporarily shut and online suppliers run the risk of running out of stock. As ever in the health and beauty sector, the motivation of a treat purchase is just as important.

### The impact of fake reviews and misinformation

When customers are concerned about trusted online sources running out of stock, there's a high probability they will look to new sources — for both new product suppliers and advice from fellow shoppers.

A third (33%) of American and 29% of British consumers reveal they are more cautious about the products they purchase because of online misinformation relating to health and beauty products (Figure 4). This can include fake or inaccurate reviews, spurious or exaggerated claims about a product’s efficacy and lies about its contents.

Just over half of consumers in both the US and UK (59% and 55%, respectively) feel confident they have not suffered from misinformation, but a further 12% in each country say they are ‘not sure’. This reflects the fact that consumers do not always know with certainty if they have received poor advice.



Figure 4: Has misinformation online relating to health and beauty products made you ore cautious about the products you purchase?

Trust is always a major issue in any health or beauty purchase because, more than any other decision, there is a real risk of not getting the desired result and even accidentally inflicting harm by ingesting a toxic substance or applying it to the skin.

Fake reviews are an everyday occurrence and Ed Saper, Director at [Pai Skincare](https://www.paiskincare.us/?gclid=EAIaIQobChMIlqWyjOvy6QIVGQiICR3hOgDFEAAYASAAEgLlHvD_BwE), believes far more should be done to punish brands who engage in what is called ‘astroturfing’. This is where a company’s own staff or third parties are encouraged to post positive reviews for their products and sometimes negative reviews for competitors.

*“When a major brand got caught ‘astroturfing’ recently, the view we heard back from the industry was that it was bad but everyone’s at it,”* he says.

*“Even when someone big is caught, they don’t suffer. We need big fines to ensure the public knows they are reading authentic reviews because it’s the consumer who suffers from being defrauded and honest companies who risk being squeezed out. It’s against our company policy for a member of staff to review our products. If they talk about us online, they have to be clear that they work for us.”*

But aren’t fake reviews plainly obvious? According to Thomas Vermeulen, Head of Fraud Investigations at Trustpilot, spotting dishonest reviews that don’t represent a genuine experience and deliberately attempt to manipulate consumer perceptions isn’t as easy as it sounds. 

*“One isolated review doesn’t tell much — it’s more about finding patterns and anomalies,” he says. “With that in mind, you should look out for more than one red flag within the reviews. When in doubt, compare reviews with other sources of information and don’t discount common sense — if it seems too good to be true, often it is.”*

He also suggests the following things to look out for. 

- Take note of the spread of scores within the ratings and the span of time in which the reviews were left. An honest company is likely to have both positive and negative reviews in the mix, and if all reviews were posted in a short period of time they might not provide a genuine representation of the business. 

- If a company only has five-star reviews, look at the total number of reviews a company has and their recency to make sure you harness the wisdom of the crowd and not just a select group. 

- Within those reviews, are you able to identify patterns or recurring structures? If the reviewer mentions the name of the business a number of times, or if it reads more like marketing collateral than a consumer experience, those could be red flags.

- Are the reviews invited or left organically? If all positive reviews are invited and the negative reviews left organically, this might suggest a biased invitation process. 

These are just a few ways to identify dishonest reviews. Lastly, Vermeulen recommends evaluating the company in question’s website and overall presence as a brand outside of reviews. *“Reviews are just one piece of the puzzle when it comes to a company’s trustworthiness,”* he says. 

### Consumers place trust in reviews

With only half of consumers feeling confident they have not been duped by online misinformation around health and beauty products, whom can the market look towards for sage advice? Whom can the public trust?

It turns out consumers are digitally savvy enough to know that advertising and information shared through social media and messaging apps aren’t always to be taken at face value. Depending on each channel and the market involved, these information sources are only highly trusted by between 10% to 14% of the public (Figure 5).



Figure 5: Proportion of consumers describing their level of trust in information sources as high for health and beauty products

Conversely, customer and expert ratings and reviews are the preferred sources for a significant proportion of consumers despite the issue of fake reviews in the marketplace. In the US, these are assigned the same level of ‘high’ trust (41%), whether they come from consumers or from experts.
The same sources of information are the most trusted in the UK. Britons are slightly more likely to trust experts over fellow consumers (35% versus 29%).

Interestingly, Figure 5 also shows that nearly twice as many consumers in both markets assign a ‘high’ level of trust to consumer and expert reviews as to news articles.

Perhaps even more telling for brands that are built around famous people or rely heavily on them for promotional activities, celebrity influencers are the least trusted channel for information. Digitally savvy consumers probably realize that the rich and famous have endorsement contracts in place and there is a risk their advice isn’t impartial and is limited to the brands they have a financial arrangement with. Such posts will typically feature the #ad (or similar) hashtag.

Both US and UK consumers are significantly more likely (four and three times, respectively), to assign a high level of trust to a rating from a fellow shopper than they are to a celebrity’s words of wisdom.

The clear trust-related takeaways are:

- The public places a significantly higher level of trust in ratings and reviews than in  news articles and retailer websites.

- Retailer websites are trusted only slightly more than advertising. Consumers clearly draw a comparison between advertising and skilled copywriting on a slick website.

- Advertising is only trusted ‘highly’ by around the same proportion of those who trust information shared on social media and messaging apps.

- Celebrity influencers have the lowest level of trust among consumers – two-thirds (67% in the US and 65% in the UK) describe their level of trust in this source of information as ‘low’.


ManCave Trustpilot Reviews

### How can retailers build trust?

As seen in the previous section, the promotional copy retailers have spent a great deal of effort perfecting is only trusted a little more than advertising. Customers are around twice as likely to believe the word of a fellow shopper or expert reviewer than they are the slick words and beautiful photographs on a retailer’s site.

This means reputable retailers need to find a way to show their credentials and prove to the public they are trustworthy and that their products are authentic and work in the way described. Showcasing customer approval stands out as the most effective way to achieve ‘[social proof](https://business.trustpilot.com/guides-reports/build-trusted-brand/why-and-how-social-proof-influences-consumers)’ authentically.
According to Daniel Durose, Brand Marketing Manager at male grooming business [ManCave](https://mancaveinc.com/), the key is to talk about the authenticity of the brand as well as be seen to actively embrace customer reviews.

On the company’s site, the pictures show models and the products in outdoor settings to underline the cruelty-free, sustainably resourced message, backed up with certification from the appropriate bodies, such as Cruelty Free International. However, as Durose points out, people expect a website to convey what a brand wants to show about itself. Where companies can go much further is encouraging reviews and, even more importantly, [engaging with them](https://business.trustpilot.com/reviews/learn-from-customers/5-reasons-why-you-shouldnt-remove-negative-feedback).

*“Reviews are essential for a retailer to show new customers they’re trustworthy,”* he says. *“Trustpilot is the Holy Grail of trust for us but we can’t just rely on good ratings and hide away from occasional unfavorable comments. We want to resolve any issues so we always respond to people and do what we can to help. We find people react really well when they see you take the time to engage with people and resolve issues rather than hide away. It’s a great way of showing you listen and care.”*

Tim Peckover, Content Marketing Manager at brand loyalty business [Smile.io](https://smile.io/), agrees. In his experience, the power of customer testimonials lies not just in what they say about a company’s products, but also the brand itself.

*“Reviews are powerful for health and beauty brands because of the social proof they attach not just to the brand, but to the quality of the products as well,” he says. “In today’s ecommerce world, health and beauty shoppers don’t just look for a fun and engaging brand, they also want products that are going to give them the results they want. Shoppers are looking for health and beauty brands that will become their go-to, and customer reviews show them how loyal other customers already are, and help turn potential shoppers into long-term brand advocates.”*

### Counting the cost of fake reviews

Reviews can represent a two-edged sword. On the one hand, as our research shows, they are the most trusted way for consumers to find out which goods experts and fellow shoppers rate highly.

However, if review systems are not properly overseen, they can provide a means through which an online business can try to appear more popular than it really is. Fake reviews are such a problem that nearly half (47%) of US consumers reveal they have been duped into wasting money on a health or beauty purchase by an inaccurate or fraudulent review (Figure 6).

Our research shows that the average American health and beauty shopper has wasted $39.6 in the past year – 9% have lost more than $100 over the same period.

This equates to 3.7% of their total spending on health and beauty, an industry worth $90bn in the US. That means a staggering $3.3bn is wasted every year due to fake reviews. That breaks down to $275m a month, or $63.5m a week or $9m every day.



Figure 6: How much money have you wasted on health or beauty products due to fake reviews?

Figure 6: (US Respondents) How much money have you wasted on health or beauty products due to fake reviews?

In the UK, more than a third of consumers (37%) have been duped into buying a product on the basis of inaccurate or fake reviews. The average shopper has wasted £19.7 in the past year alone (Figure 7).

This accounts for 3.3% of their spending on health and beauty products, which is a £9.9bn market in the UK. This means fake reviews lead to £327m of wasted expenditure each year, equivalent to £27m per month, £6.3m per week or just under a million pounds (£895,890) every day.


Figure 7: (UK Respondents) How much money have you wasted on health or beauty products due to fake reviews?

For Rebecca Hopkins, Founder of skincare brand [Balance Me](https://www.balanceme.com/), fake reviews are a common way for unscrupulous online retailers to try to hoodwink the public.

*“We find the occasional bad review on our site and third-party sites from purported customers that are difficult to verify and trace and we’re almost certain we didn’t actually sell them anything,”* she says.

*“When we investigate further we often find they can’t prove they’re a customer, even though we always offer to put things right. On third-party sites, such as Amazon, we can often see that they have left similar poor reviews on several other brands and then left a glowing review for a rival, often for a lesser known, non-high street brand. I suspect that there are individuals or businesses out there that provide this kind of service to less scrupulous brands but they are very hard to pin down, yet their comments can be quite harmful in the customer's eyes.”*

Hopkins also highlights the issue of non-authorized ecommerce businesses claiming to sell the company’s stock: *“We also have people using our brand name as a storefront in other markets, usually on third-party platforms. They seem to be able to get hold of some of our stock through the grey market and they then lift photos from our website. It’s very hard to police but we do what we reasonably can to stop it. It seems to be particularly prevalent where we are not actively operating in a specific market, such as America. We can’t be sure it’s definitely our products or not, we don’t know how old they are and, either way, consumers may not be buying from whom they think they are, and they won’t be getting our level of customer service or quality guarantee.”*

This issue is also of particular concern to Sarah Brown, Founder of Pai Skincare. She reveals the company spends hundreds of thousands of pounds protecting its formulas and the look and feel of its products. However, only a global giant, she believes, can afford to protect themselves in every market, regardless of how many sales they make in it.

She believes some businesses are ‘passing off’ counterfeit goods as original. The look and feel of their products and the packaging are copied, but the natural ingredients are not.

*“We have spent a dozen years building up a reputation for certified, natural products which are kind on skin,”* she says.

*“We run our own manufacturing and control our own supply chain to make sure every ingredient is stored and handled properly. Someone passing off our products will not do this and so the end result could well include skin irritants which are usually added to make the product last longer. It’s annoying. It’s damaging to our brand, but it also means people buying the product won’t get what they think they’re paying for and there’s a good chance it will cause skin irritation.”*

### Counting the cost of counterfeits

Wasting money is bad enough but the even more alarming impact of fake reviews for consumers is the purchase of counterfeit or poor-quality goods which damage their health. This risk is heightened when salons and stores are closed and people cannot talk to a professional for advice.

Nearly two in three (64%) American consumers have lost money in the past year by buying fake or poor-quality health and beauty goods (Figure 8). The average loss in the past year has been $43.9.



Figure 8: (US Respondents) How much money have you wasted in the last year because health or beauty products were poor quality or fake?

In the UK, there is a similar picture, with nearly half of consumers (48%) revealing they have bought poor-quality or fake beauty and health products (Figure 9). The average loss was £25.2 in the past year.


Figure 9: (US Respondents) How much money have you wasted in the last year because health or beauty products were poor quality or fake?

It is here that campaigners are particularly worried. Losing money to a counterfeit or adulterated product is one thing, but consumers are risking far more than cash. As Janet Nudelman, Director of the Campaign for Safe Cosmetics, reveals, there are very real risks of people inadvertently jeopardizing their health with these bad purchases.

*“We regularly hear horror stories about what happens when health and beauty products are counterfeited or tampered with using dangerous chemicals,”* she says. *“There was [a recent case](https://www.usatoday.com/story/news/health/2019/09/12/california-woman-coma-after-using-face-cream-tainted-mercury/2300376001/) of a woman in California ending up in a coma because the skin lightening cream she had bought contained mercury."*

*“This is only going to be made worse as the lockdown and recession lead to more stores closing and more people shopping online and buying products they’re not familiar with that could be counterfeit, especially because they can’t see or feel the packaging to get an idea of whether the product is real or not.”*

## Conclusion: social distancing and recession raise the stakes

Covid-19 did not create fake reviews and misinformation that are employed by unscrupulous ecommerce operators to sell counterfeit health and beauty products. Nor is it the sole reason why people waste money and risk their health by using goods of unknown origin.

However, industry experts agree that the lockdown and inevitable global recession have, and will, exacerbate the problem. The unprecedented global pandemic brings with it lower wages and the real risk of reputable retailers regularly running out of stock. This is happening because international supply chains are already strained and some manufacturers are heeding the call to switch production to hygiene products to support communities emerging from lockdown.

The risk goes beyond supply chains being stretched, of course. Consumers are having to make important purchasing decisions without any access to trusted professionals running boutiques. Even when salons reopen, capacity is reduced by social distancing requirements, meaning access to advice is not as available as before.

As Robert Myers, General Manager for Memberships at the Professional Beauty Association, explains, the public has to be vigilant when buying products without the advice of a trusted professional.

*“Consumers must be careful about where they purchase their professional salon products,”* he cautions.

*“Counterfeit products, phishing campaigns, defective inventory and other deceptive business practices are ever-present and a risk when going outside authorized channels. False claims have been an ever-present issue and we recommend seeking the advice of a licensed professional to select the best products and solutions.”*

So, who can the public turn to for advice if stores and boutiques are moving from closure to social distancing measures which restrict the number of people a professional can assist? As international supply chain challenges lead to legitimate online and physical retailers running out of stock, customers run the risk of being conned. Misinformation about a product’s authenticity and efficacy are rife, so too are fake reviews.

The result? Nearly one in two US consumers and just over one in three UK consumers feel they have lost money on the basis of fake reviews and misinformation.

The solution? As our research shows it looks like the public already knows where it can go for advice – reviews from experts and fellow consumers. The digital savvy public understands how ecommerce and online marketing works and it has placed its trust firmly in expert advice and social proof.
This means reviews are not only clearly the most trusted source of information, they’re nearly twice as highly trusted as the news. Retailer websites only have trust levels comparable to advertising. The same applies to social media.

In fact, the public is passing on some social media insight here that an industry so heavily reliant on celebrity endorsement really needs to listen to. Two in three consumers do not trust celebrity influencers highly. They are nearly four times more likely to trust one another, than a superstar.
Clearly, the public has spoken. Pop stars and actors are not the go-to source to differentiate between trustworthy brands and those relying on fake reviews and misinformation to sell counterfeit goods.

The public is looking beyond the hype and glamour of slick advertising, beautiful copywriting and well-known faces. It’s even looking beyond the words of praise laid out by journalists in news organisations.

Our research is clear. Consumers are placing their trust in one another.

### Methodology

London Research was commissioned by Trustpilot to carry out surveys of 1,000 nationally representative consumers in the US and UK in April 2020, while both countries were under lockdown during the coronavirus crisis. The research was conducted using a Toluna research panel. London Research also carried out a series of interviews for this report.

### Acknowledgments 

London Research and Trustpilot would like to thank the following people for their help in compiling this report:

- Gina Akers, TV and radio presenter, and wellness and beauty expert
- Sarah Brown, Founder, Pai Skincare
- Daniel Durose, Brand Marketing Manager, ManCave
- Rebecca Hopkins, Founder, Balance Me
- Robert Myers, General Manager for Memberships, Professional Beauty Association
- Janet Nudelman, Director, Campaign for Safe Cosmetics
- Tim Peckover, Content Marketing Manager, Smile.io
- Ed Saper, Director at Pai Skincare
- Meghan Stabler, VP of Global Product Marketing and Communications, BigCommerce
- Thomas Vermeulen, Head of Fraud Investigations, Trustpilot







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