Quantcast

Online consumer reviews and sales: Examining the chicken-egg relationships

Research paper by Jie Ren, William Yeoh, Mong Shan Ee, Aleš Popovič

Indexed on: 26 Oct '17Published on: 17 Oct '17Published in: Journal of the Association for Information Science and Technology



Abstract

This article examines the “chicken-egg” two-way relationships between online consumer reviews and sales, and assesses the dual influencer and indicator roles of online consumer reviews in relation to purchase behavior. Considering the time factor, we adopt the methodology of Granger causality test and track 3,390 products on Amazon.com over a 2-month period. The results reveal that a causality loop exists between online consumer review volume and sales. Specifically, our findings indicate that the volume of negative consumer reviews drive consumers' purchasing decisions, but the volume of positive consumers reviews only marginally affects purchasing decisions. Also, consumers generate more positive reviews than negative reviews after sales. Our results highlight the importance of negative consumer reviews; negative reviews not only lead to sales, but sales, in turn, lead to higher volume of negative reviews. The findings suggest an alternative strategy for practitioners to address negative online consumer reviews and highlight the awareness effect of online consumer review postings that can later convert into purchase behaviors.