Consumer Reviews Influence Product Discontinuation Decisions, Study Finds

Online consumer reviews play a critical role in shaping product retention and deletion decisions. While it's well-known that these reviews influence shopper choices and help companies gauge demand, new research indicates that they might also impact which products a company discontinues. In a study published in the Journal of Retailing and Consumer Services, a team of researchers, including WPI Business School Professor Joseph Sarkis and Qingyun "Serena" Zhu, now an assistant professor at San Diego State University, analyzed over 6,000 online reviews from The Body Shop, a UK-based skincare and cosmetics retailer. By comparing products listed in 2018 to those available in 2022, the researchers explored how consumer feedback might influence product deletion decisions. A central concept in this research is the idea of "consumer voice," which includes all forms of customer opinions, feedback, and critiques regarding products. The study demonstrates how companies can leverage this consumer voice to inform their "organizational voice," integrating customer insights into strategic decisions. "Significant research exists on how companies decide to discontinue products based on factors like sales, market share, and supply chain capabilities," says Zhu. "However, the role of consumer voice in these decisions, especially in online retail, has been less explored." To conduct their analysis, the researchers used natural language processing (NLP), an advanced form of artificial intelligence, to evaluate the wording in customer reviews. Reviews were scored based on several criteria, including readability, length, sentiment toward the product, and relevance to its core attributes. Additionally, the researchers considered whether reviews were marked as helpful or unhelpful by other users on The Body Shop's website. The findings revealed that products with longer, more detailed, and more readable reviews were more likely to remain on the market. Conversely, products with shorter, more subjective, and negatively toned reviews, or reviews that failed to address key product features, were more likely to be discontinued. "Companies often have to make tough decisions about which products to keep and which to drop," explains Sarkis. "Our research suggests that consumer reviews can provide valuable analytical details that aid in making these decisions." However, Zhu and Sarkis emphasize that their study does not establish a direct causal relationship between consumer reviews and product deletion. Other economic factors, such as declining sales or supply chain issues, can also contribute to a product's discontinuation. The complexity of human decision-making means that additional research is necessary to validate these findings and gain a deeper understanding of consumer behavior across different industries and companies. "Discontinuing products is a common practice because it's inefficient for companies to maintain a large inventory of underperforming items," Sarkis adds. "Consumer reviews can serve as a useful tool in this process, helping companies identify which products may no longer meet their standards or customer needs." The study underscores the importance of understanding and incorporating consumer feedback into product management decision-making. By doing so, companies can better align their offerings with customer preferences, potentially improving both customer satisfaction and business performance. Qingyun Zhu et al., "How loud is consumer voice in product deletion decisions? Retail analytic insights," Journal of Retailing and Consumer Services (2024). DOI: 10.1016/j.jretconser.2024.104110