Word-of-Mouth System Implementation and Customer Conversion: A Randomized Field Experiment

Abstract

Online retailers often face the decision on whether they should implement a word-of-mouth (WOM) system on their websites. Some retailers opt not to have an in-site WOM system (e.g., Tiffany.com and Tjmaxx.com ), whereas others implement and manage an internal WOM system (e.g., Amazon.com and Macys.com ). According to a new study in Information Systems Research, authors Ni Huang (Arizona State University), Tianshu Sun (University of Southern California), Peiyu Chen (Arizona State University), and Joseph M. Golden ( Collage.com ) conducted a randomized field experiment to examine how implementing an in-site WOM system from ground zero influences customer conversion in an online retailing website. Their results demonstrate that implementing an in-site WOM system can be a double-edged sword to the online retailing website. Specifically, the impact of a WOM system implementation on customer conversion is moderated by WOM volume, such that its effect is positive above a threshold of volume and negative below the threshold. Additionally, the researchers find that WOM valence reinforces the impact of a WOM system on customer conversion. These results offer important implications for the hundreds-of-billion-dollar online retailing industry on the implementation and management of online WOM systems.

Developing Web Content Management Systems – from the Past to the Future

“…Much attention is being paid to studying buyer behaviour in B2B and B2C systems, introducing new approaches to increase sales [19], and separate websites are appearing to support CRM, as well as modules for implementation in content management systems.…”

Guest editorial

“…Some commonly used "social" theories across the 159 papers include social capital theory, social exchange theory, social comparison theory, social learning theory and social network theory (e.g. Beck et al, 2014;Cummings and Dennis, 2018;Gelper et al, 2018;Huang et al, 2019;Krasnova et al, 2015;Lowry et al, 2016;Wang et al, 2019). Although these theories are not originally developed for studying social media or information technologies in general, they have been employed by business researchers to make sense of various social media phenomena.…”

“…For example, Wang et al (2019) adopt social capital theory to understand the differences between social media hub users and non-hub users in terms of structural, relational and cognitive social capital and how such differences lead to different reposting behaviours of their followers on social media. Huang et al (2019) rely on social learning theory to explain why adding the Facebook comment function to an e-commerce website can foster a positive or negative social learning process for website visitors, depending on the volume of the Facebook comments available on the website. Although these theories are not something new to OM researchers and have been applied in various OSCM contexts (Ketchen and Hult, 2007), they should still be useful for studying the use of social media in OSCM.…”

Cooperation and decision making in a two-sided market motivated by the externality of a third-party social media platform

“…The emergence of Facebook, WeChat and other platforms with social attributes constitutes a new ecosystem of social media in the era of mobile Internet. The existence of a two-sided platform can provide both buyers and sellers with transaction information, business security and service guaranties that both parties need (Athey et al 2018;Jung et al 2019); while social media platforms tend to be prominent in network traffic and user vitality, resulting in tigher connections among consumers (Huang et al 2019;Uratnik 2016). Can these two types of platforms take advantage of their respective strengths to cooperate, and will the cooperation bring about overall benefits?…”

“… 2019 ); while social media platforms tend to be prominent in network traffic and user vitality, resulting in tigher connections among consumers (Huang et al. 2019 ; Uratnik 2016 ). Can these two types of platforms take advantage of their respective strengths to cooperate, and will the cooperation bring about overall benefits?…”