NAVER D-Place Report 2022 Part 2
NAVER D-Place Report 2022 Part 2
NAVER D-Place Report 2022
Part 2. NAVER Place Review
: Improving Business Performance of Local SMEs
The D-Place Report, first published in 2021, aims to examine current benefits that online platforms provide to local and offline businesses through empirical analysis and ultimately explore ways to further support these businesses. Previously, Part 1 of the D-Place Report 2022 examined the impact of SmartPlace solution use on offline businesses. In Part 2, the D-Place Report looks into the effects of Place Review and Keyword Review on business performance of local SMEs.
NAVER Place Review and Keyword Review
NAVER offers ‘Place Review,’ which collects authentic reviews written by users who made their purchase through Booking or Order or verified their store visit with their receipt or credit card history. In July 2021, NAVER launched ‘Keyword Review’ to eliminate the negative effects of malicious star ratings by certain customers and create a system that facilitates constructive relationships between businesses and visitors. Keyword Review allows users to select review keywords (e.g. “uses fresh ingredients” or “dessert was delicious”) that most accurately resemble their visit experience. Potential customers can then search for stores that suit their taste or preference, while businesses can highlight their stores’ unique features and better connect with customers who are more likely to enjoy the store.
Based on empirical and survey data, Professor Byungjoon Yoo and his research team at Seoul National University analyzed the effects of NAVER Place Review and Keyword Review on customer acquisition, conversion, as well as businesses’ satisfaction of the renewed review system.
Place Review: Local SMEs Experience a 1.5x Increase in Business Performance Compared to Franchisees
According to SmartPlace data analysis, the research team finds that performance metrics including page views, page visitors, Navigation users, Save users, Share users, and Call users improve as Place Reviews and Keyword Reviews increase. In particular, the positive effect of Place Reviews is more pronounced for SMEs: they experience a 1.5x greater increase in business metrics compared to franchisees.
The survey results indicate that businesses are generally satisfied with Place Review, which they rate, on average, between 3.67 to 4.25 (out of 5.0). Businesses also perceive garnering Place Reviews as beneficial for running their business. In particular, businesses responded that Place Review helped them 1) increase sales, 2) acquire and retain customers, 3) highlight their strengths, and 4) advertise and promote their business. Non-metropolitan and non-franchised businesses appear to appreciate the benefits of Place Review more deeply than metropolitan and franchised businesses, which suggests Place Review is helping local SMEs grow.
Keyword Reviews, Compared to Star Ratings, Better Highlight Individual Store Strengths and Improves Customer Service Quality
Data analysis finds that Keyword Reviews have a positive impact on the number of Saves and Shares—the effect being more pronounced than regular reviews. This suggests that Keyword Reviews better highlight individual store strengths, and thus more effectively encourages users to visit these businesses in the future.
Survey results also show that businesses, in general, prefer Keyword Reviews to star ratings, finding the former more beneficial than the latter. When comparing Keyword Reviews to star ratings, businesses commented the following: 1) Businesses can highlight their strengths through Keyword Reviews, allowing customers to conveniently find unique features of each store. Businesses can then consider the relevant keywords to improve their store operations. 2) Keyword Reviews help businesses improve the quality of their customer service. In addition, businesses found Keyword Review, in contrast to star ratings, more helpful in terms of 3) raising brand awareness online and 4) acquiring and retaining customers. Furthermore, businesses note that after using Keyword Review, hey experienced fewer adverse effects of star ratings, including biased, malicious, fraudulent, and other bad faith reviews. Keyword Review also resulted in an increase in the number of reviews, which in turn helped SMEs improve their business performance.
Building a Review System that Effectively Connects Offline Businesses with Users Significantly, the D-Place Report 2022 verifies that NAVER Place Review effectively helps offline businesses, especially local SMEs.
Professor Yoo comments, “through this analysis, we discovered that Place Review functions as a way to highlight relatively unknown businesses, helping them reach potential customers. Keyword Review, which NAVER SmartPlace introduced for the first time in the industry, is NAVER’s endeavor to replace uniform quantitative indicators with rich qualitative indicators tailored to each business, and can be seen as an innovative attempt by a digital platform to minimize the side-effects of existing review systems.”
YungSeong Lee, leading NAVER’s Place Review team, adds, “NAVER has been making various efforts to develop Place Review into an online space that enables customers and businesses to communicate their store visit experience. This report is especially meaningful in that it confirms our previous efforts, collaborating with numerous users and SMEs to improve Place Review. Moving forward, our plan is to continue to refine and enhance Place Review.”