Online Reviews: Do Consumers Use Them?

Abstract

The use of the WWW as a venue for voicing opinions, complaints and recommendations on products and firms has been widely reported in the popular media. However little is known how consumers use these reviews and if they subsequently have any influence on evaluations and purchase intentions of products and retailers. This study examines the effect of negative reviews on retailer evaluation and patronage intention given that the consumer has already made a product/brand decision. Our results indicate that the extent of WOM search depends on the consumer's reasons for choosing an online retailer. Further the influence of negative WOM information on perceived reliability and purchase intentions is determined largely by familiarity with the retailer and differs based on whether the retailer is a pure-Internet or clicks-and-mortar firm. Managerial implications for positioning strategies to minimize the effect of negative word-of-mouth have been discussed.

Keywords: Online Reviews, Retailer Evaluation, Patronage Intention, Consumer Decision Making

JEL Classification: D1, L8