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Online Retailers Embrace WOM via User Reviews

Taking a tip from MySpace and Amazon, e-commerce sites are letting customers post comments, reviews and photos - and in the process finding out a lot about their customers, reports Business Week.

Macys.com opened its sites to customer reviews six months ago and now gets 350 reviews a day: The site has become a social network in its own right, putting word-of-mouth to good use right on the site.

With 80 percent of all customer reviews positive, and 63 percent more likely to purchase from a site with ratings, online customer input is gaining steam in the marketing world.

By the end of 2006, 43 percent of e-commerce sites offered customer reviews and ratings, almost double the 23 percent at the end of 2005, according to MarketingSherpa. The firm also found that 50 percent of those age 18-34 have posted a comment or review on products they've bought or used.

The input is also being used as valuable data. Canadian supermarket chain Loblaws is using its online reviews for in-store signs. In one instance, a frozen food states that 90 percent of customers would recommend it to a friend - a fact gathered from online product ratings.

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