Download This PaperHow Does the Distribution of Word-of-Mouth Across Websites Affect Online Retail Sales?
Zhou, W. and Duan, W. (2012). How Does the Distribution of Word-of-Mouth across Websites Affect Online Retail Sales? Proceedings of the Eleventh Workshop on E-business of International Conference on Information Systems (WeB), Orlando, FL
14 Pages Posted: 15 Feb 2014 Last revised: 7 Aug 2018
Date Written: February 14, 2012
Abstract
Consumers consistently resort to online Word-of-Mouth (WOM) as an effective remedy for the lack of physical trials in online shopping. Nevertheless, they are confronting relatively different levels of search costs for WOM information depending on the distribution of WOM across websites. This study investigates the sales impacts of dispersion of WOM volume and variation of WOM valence by using sales and WOM data of software programs from Amazon and download.com. Our results suggest that, conditional on the total number of WOM conversations from retailing websites and third-party websites, less evenly distributed WOM leads to more sales. And it is even more beneficial for a product’s sales if having this less dispersed WOM distribution skewed towards retailing websites. In addition, more consistent consumer evaluations across websites encourage online purchasing decisions. By comparing the volume dispersion and variance variation, we find that receiving one hundred reviews of 5-star average rating on Amazon leads to sales almost six time more than receiving fifty reviews of 5-star average rating on Amazon and another fifty reviews of 5-star average rating on download.com.
Keywords: Word-of-Mouth, User-generated content, Volume dispersion, Valence variation, Online retail sales
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