Skin care brand Sunday Riley wrote fake Sephora reviews…

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We have all worried about it. I love reviews for helping me make buying decisions. It is great to have information from real customers who have experience with a product. But are those reviews real? We have written about it before right here in Teach the 4 Ps. We also have an Ethical Dilemma on fake reviews in Essentials of Marketing.

It came up again recently when it was reported that “Skin care brand Sunday Riley wrote fake Sephora reviews for almost two years, FTC says.” (CNN, October 23, 2019. As consumers increasingly rely on reviews as a source of buying information, there is a growing incentive for sellers to add more information. This story about Sunday Riley is particularly egregious.

This is a major concern for retailers or other intermediaries that add value by providing reviews. For Amazon, good and bad reviews provide valuable information to consumers — but fake reviews threaten trust in the system. Consider, a study by a British consumer education group which found “Many popular tech products on Amazon are boosted by fake reviews, an investigation finds,” (CNN, April 16, 2019). Even travel site like TripAdvisor faces the same concerns, “TripAdvisor defends itself against claim that up to one in seven reviews might be fake,” (CNN, September 6, 2019). For Amazon and TripAdvisor their business models rely heavily on reviews. These intermediaries do not pay customers to provide this information — so it is low-cost to add — but it is one of the main reasons many customers use the sites. Consequently, Amazon and TripAdvisor use artificial intelligence technology to try to weed out fake reviews.

We cover online reviews and related ethical and legal issues in Chapters 13 and 16 in Essentials of Marketing. 

Mattress firms creating value (?) with financing deals…

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The mattress industry is a pretty crazy (check out “The Great Mattress Conspiracy: Why Are There So Many Mattress Stores?” on Endless Thread, podcast and story). You might check out the podcast for a fun example when you cover retailing. Or ethics. You might also check out one of our previous posts, “The Gray World of Online Reviews” (Teach the 4 Ps) — tags include ethics and online reviews.

Onto our story of the day and we are back in the retail mattress industry. With the emergence of new mattress products designed for easy shipping, online mattress stores (Casper, Leesa, Tuft & Needle), this market continues to be very competitive. Retail brick-and-mortar store Mattress Firm has closed 700 stores and is in Chapter 11 bankruptcy. Now they are competing on financing. In fact, Mattress Firm will give you six years of 0% interest on a mattress purchase of up to $3999. Financing is certainly one way to create value for customers — and the automobile industry has done it for years — but does it make sense for buyers of mattresses. We will see. Learn more reading “6-year, 0% loan for a mattress? Intense competition continues to grip mattress industry,” USA Today, October 25, 2019.

Reebok’s Digital Strategy Change

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Marketing Dive published an article based on an interview they did with Matt Blonder, Reebok’s global head of digital, talking about a major digital facelift and loyalty program revamp he spearheaded over the past year.  In the article, Blonder cites numerous issues with the previous strategy and calls their website an embarrassment.  One of the issues was the fact that their website essentially hadn’t been touched in years.  Another was what he called a “hyper masculine” design.  Blonder said the new strategy includes a major overhaul of the site to make it faster than the previous site, include user generated content, and will incorporate a personalized e-commerce experience.  They’re also launching a new loyalty program and hope the data from that program can feed into their personalized e-commerce engine.  The article talks about how Reebok’s previous decisions had unintentionally excluded women and led to defection to competitors Nike and Lululemon.

Influencer Overload

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“How can you help me if you are no one?” – a quote from the exasperated owner of the White Banana Beach Club in the Philippines.  The quote was in response to a message from a traveler wanting to stay at his resort for free in exchange for posting Instagram stories.  The owner has received over 100 similar messages in less than a year since they opened their establishment.  I thought this topic was particularly timely since our last post was focused on an emerging segment of influencers – gamers.

We know that influencers provide a level of independent perspective that can have a material impact on sales.  This effect has created a new income stream for product reviewers, celebrities, and other internet personalities but it begs the question, how can you quantify that influence?  The New York Times Article, “No, Your Instagram ‘Influence’ Is Not as Good as Cash, Club Owner Says“, is an interesting read on the subject and presents a good topic for a class discussion.

Just in case that wasn’t enough, this Marketoonist cartoon came out almost the same time as the article linked above and hits on the same pain point.

Facebook Transparency

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Facebook has suffered a number of self-inflicted wounds over the past year.  So much so that my students joke that they must have a calendar full of bad decisions and we’re just waiting to see which one they decide to roll out each month.  Impressively, Facebook recently announced that as of the end of February, users will be able to see how their information is used for ad targeting.  They are referring to the update as Custom Audience Transparency.  Once launched, users will be able to click on the top right corner of a Facebook ad and see which business uploaded that user’s information and highlight audience sharing that might have taken place.  This article from Wired covers the new update in detail.  According to Facebook, this update should help improve transparency for themselves and their advertisers.

What do your students think?  In my experience, students are relatively unconcerned about privacy and marketing students understand it is being used to help target ads that might be more relevant to their audience.  However, targeting was also used to help influence voters in advance of multiple US elections.  Is that still okay?  What about business implications?  How will Facebook’s financials be affected by the change?