In the world of e-commerce, the online review is king.
An increase of just one star in a rating on Amazon correlates with a 26% increase in sales, according to a recent analysis by e-commerce consulting firm Pattern.
But while online reviews have become powerful sales tools, the ecosystem is relatively crude. Reviews can be easy to manipulate, and the operators of sites with the most reviews are not always motivated to crack down on fake ones planted to promote products. That leaves many consumers wondering what to believe.
"The detection of it is a very difficult issue," said Edward Malthouse, a professor of marketing at Northwestern University who has studied the influence of online reviews. "How can you tell if I'm just someone who's being paid to write a review versus a genuine review?"
The state of the system was highlighted last month in a proposed settlement between Sunday Riley Skincare, a popular seller of items like $55 night oils and $85 brightening serums, and the Federal Trade Commission, which found that the company had posted fake reviews of its products on Sephora's website for years. Allegations that the brand directed employees to write fake reviews emerged on Reddit last year, but the FTC complaint was far more detailed and said the company's chief executive, Sunday Riley, had been directly involved in the scheme.
The complaint included a July 2016 email from Riley that told employees to create three Sephora accounts each with different personas and Gmail addresses. In addition to posting praise, she wrote, employees should "dislike" negative reviews.
"After enough dislikes, it is removed," she added. "This directly translates to sales!!"
"Make sure to NOT compare the product to other products, to not use foul language and to be very enthusiastic without looking like a plant," she wrote. "Leave a review for a different product every day so you build up history."
The agency found multiple fake reviews between 2015 and 2017. When Sephora removed some of them, the FTC said, Sunday Riley started to use technology that obscured locations and IP addresses. Interns were asked to post from fake Sephora accounts as recently as April 2018.
The FTC complaint cited another email from a Sunday Riley employee offering tips: "If you notice someone saying things like I didn't like 'x' about it, write a review that says the opposite. The power of reviews is mighty, people look to what others are saying to persuade them and answer potential questions they have."
Riley and her company did not respond to email and LinkedIn messages seeking comment for this article. Two public relations firms that previously worked with Sunday Riley said they no longer represented the firm.
Sephora still promotes Sunday Riley products in its stores. The retailer said in an email to The New York Times that it did "not believe the actions at Sunday Riley are representative of our brands or the countless hours our clients have spent sharing their authentic product experiences with us." The company said it vetted and had removed certain Sunday Riley reviews from its website, particularly if reviews were left the same day the account was created.
Sephora has a new system for verifying the source of reviews and added badges to highlight reviews tied to purchases, the company said. It did not address questions about any punitive action it took against Sunday Riley.
The response from Sephora and the proposed settlement with the FTC, which did not include a financial penalty, surprised some in the industry. The commission received roughly 40 comments about the agreement from frustrated consumers, one of whom said it was a "finger wag."
Business on 11/30/2019