Contact: Laura E. Wilker
Deloitte Services LP
212-492-2871

Contact: Chris Rieck
Hill & Knowlton
212-885-0580

NEW YORK, October 1, 2007 - Enabled by new information technologies, consumers have real-time access to information, insight and analysis, giving them an unprecedented arsenal to help make purchase decisions. At the same time, these technologies provide a voice and a venue for anyone with something to say, allowing individuals to shape reputations of consumer companies and their products, according to a new Deloitte study.

To build their knowledge arsenals, consumers are turning to online reviews in large numbers – and those reviews are having a considerable impact on purchase decisions. According to a recent survey by Deloitte’s Consumer Products group, almost two-thirds (62 percent) of consumers read consumer-written product reviews on the Internet. Of these, more than eight in 10 (82 percent) say their purchase decisions have been directly influenced by the reviews, either influencing them to buy a different product than the one they had originally been thinking about purchasing or confirming the original purchase intention. Interestingly, while the percentages were slightly higher for the younger generations, all age groups are reading and acting on online reviews at significant rates. In addition, the reach of consumer reviews isn’t limited to the online world; seven in 10 (69 percent) consumers who read reviews share them with friends, family or colleagues, thus amplifying their impact.

“This increasing market transparency can adversely impact the margins, market share and brand equity of consumer products companies,” said Pat Conroy, vice chairman and US consumer products group leader at Deloitte & Touche USA LLP.  “In the past, clever marketers and advertisers shaped brands, but now consumers are increasingly empowered, everyone has a voice, and information and opinions are instantly dispersed. Consumer product companies need to determine how best to capitalize on this new landscape. Clearly, there will be consequences for those who don’t.”

While the survey found that reputation and word of mouth – both factors that are greatly influenced by online reviews – are the key factors that influence consumers’ decisions to purchase a new product or brand, many other factors also play a significant role. “Better for you” ingredients or components, eco-friendly usage, and sourcing were each cited by approximately four in 10 consumers as important factors in making purchase decisions, while eco-friendly production and/or packaging was cited by more than one-third (35 percent). “Information about products, pricing, ingredients and sourcing, as well as corporate practices around labor, environment, healthcare and other issues is now instantaneously available to potential customers – and, increasingly, consumers are making decisions based on this information,” commented Conroy.

Recent recalls of imported products are also contributing to this trend: one-third of survey respondents (33 percent) said that, as a result of recent recalls, they now look for more information on the packaging/product and almost one in five (18 percent) said they now look for more information on the Internet or in other locations.

“As knowledge proliferates, there is a tendency for products to commoditize,” remarked Conroy. “In order to successfully compete, it’s imperative for consumer brands to build and maintain their images, create differentiation, and enhance loyalty. For example, consumer product companies with exemplary supply chains can achieve differentiation by making their processes more transparent. Embracing higher-than-required quality and safety standards can reassure customers and built trust. And co-opting customers to create value with the company can create not only loyal customers, but also brand emissaries.”

About the Survey
The survey was commissioned by Deloitte & Touche USA LLP and conducted online by an independent research company between August 28 and September 6, 2007.  The survey polled a sample of 3,331 consumers over the age of 16.  The margin of error for the entire sample is plus or minus two percentage points.

For more information about Deloitte’s Consumer Products group, please visit www.deloitte.com/us/cpg.