Examining the Relationship Between Reviews and Sales: The Role of Reviewer Identity Disclosure in Electronic Markets

Abstract

C onsumer-generated product reviews have proliferated online, driven by the notion that consumers' decision to purchase or not purchase a product is based on the positive or negative information about that product they obtain from fellow consumers. Using research on information processing as a foundation, we suggest that in the context of an online community, reviewer disclosure of identity-descriptive information is used by consumers to supplement or replace product information when making purchase decisions and evaluating the helpfulness of online reviews. Using a unique data set based on both chronologically compiled ratings as well as reviewer characteristics for a given set of products and geographical location-based purchasing behavior from Amazon, we provide evidence that community norms are an antecedent to reviewer disclosure of identity-descriptive information. Online community members rate reviews containing identity-descriptive information more positively, and the prevalence of reviewer disclosure of identity information is associated with increases in subsequent online product sales. In addition, we show that shared geographical location increases the relationship between disclosure and product sales, thus highlighting the important role of geography in electronic commerce. Taken together, our results suggest that identity-relevant information about reviewers shapes community members' judgment of products and reviews. Implications for research on the relationship between online word-of-mouth (WOM) and sales, peer recognition and reputation systems, and conformity to online community norms are discussed.

What makes a useful online review? Implication for travel product websites

“…Clemons, Gao, and Hitt (2006) showed that not only the variance of ratings but also the strength of the most positive quartile of reviews has a significant impact on the growth of craft beers. In addition to the features of online reviews, the effect of the degree to which review writers disclose their identity in the evaluation of product quality and product sales has been discussed (e.g., Forman, et al, 2008). While a number of researchers have concluded that an improvement in the review score leads to an increase in relative sales online, Chen and Wu (2005) and Duan et al (2008) demonstrated that high product ratings do not necessarily lead to increased sales.…”

“…Fogg et al (2001) demonstrated that reviewers' names and photos in the online information source have a positive relationship with people's perception of the credibility of websites on the basis of the information processing theory (Mackie, Worth & Asuncion, 1990). Forman, et al (2008) pointed out that message recipients may use the personal information of the message creator as a heuristic cue, drawing on the evaluation of the information provider as a cognitive device to assist them to reach judgements and actions.…”

“…The website requires providing background information during the registration process, including name, address, and a photo. The researchers of this study manually checked if members indicate their full names or just provide initials (e.g., M. T.) (see Baek et al, 2013;Forman et al, 2008;Racherla & Friske, 2012). To determine whether the user has a real photo, we checked if the reviewers use real photos clear enough to identify their faces or provide no animations and screen shots (e.g., a scene and status).…”

“…The number of reviews that messengers have written represents their expertise, and reviewers' reputation is calculated by the number of their friends, fans and Elite awards (Forman et al, 2008;Racherla & Friske, 2012;Weiss, et al, 2008). To capture the features of reviews, the number of words in each review and the rating that the reviewer gave from one to five stars were collected as quantitative characteristics (Chevalier & Mayzlin, 2006;Mudambi & Schuff, 2010).…”

“…Within the online environment, offering limited cues of peer recognition and a disclosure of personal information (e.g., real photo, name and address) and online reputation in the community have a large influence on the way consumers respond to messages (Forman, Ghose, & Wiesenfeld, 2008).…”