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The Impact of Online Customer Reviews on Consumer Purchasing Decisions

1. Introduction to Online Customer Reviews

Online review refers to a kind of information published by consumers to evaluate or describe alternatives such as products or stores that are available or used in the market. The review usually consists of a short phrase that provides the author’s opinion about a numeric rating and an opinion about the item reviewed by the reviewer. Online reviews play pivotal roles in the life of the internet. It provides significant buyer-based sources and does not require in-page classical advertising. They also reduce potential search costs for buyers. Different online reviews refer to different types of goods and services. Some might have distinct language and writing styles. These reviews are usually one-way communications, unless websites encourage dialogue through active mechanisms. Be that as it may, a review website encourages and collects opinions.

Introduction to Online Customer Reviews – Customer reviews have become a major factor in influencing the purchasing decision and behavior of consumers. As shopping on the internet becomes a significant discussion in the literature on e-commerce, studies on e-commerce have shifted from analyzing the adopting internet shopping to factors that affect the purchasing decision. Many online companies have converted and engaged in more interactive and dynamic ways, allowing consumers to discuss, place, and retrieve. Word-of-mouth has an extraordinary influence on advertising consumer behavior. Recent global statistics have shown that over 80% of internet users read online customer reviews of any category that has been posted there.

2. Factors Influencing Consumer Trust in Online Reviews

From literature review, H2a = Source Trust + Content Trust + WOM Trust that impacts Trust. It is suggested that trust, a form of social capital notion, can provide people with resources to those they are socially involved with.

This study aims to measure factors influencing consumer trust in OCR. As trust does affect positively the purchase decision, therefore it is very favorable to online businesses. Factors of consumer trust in OCR built in this study are a combination of review content and source, such as review credibility and reputation of the website, so that a model of trust factors can be constructed for business use in order to analyze the trust and the overall relationships of those issues. Since these are proposed relationships, we need to verify their validity through research. It is important to search for empirical results to support or challenge the theoretical framework. Based on such empirical analyses and results, they can be incorporated into the research modeling and theory in order to yield further advancement in understanding the influence of online reviews.

3. The Role of Online Reviews in Shaping Consumer Behavior

In creating a model to examine the relationship between online customer reviews and product sales, Huang and Chen found that compared with online customer ratings, volume and valence of online customer reviews have more pronounced effects on product sales, influencing consumers’ purchasing decisions. Lu, Park, and Chua examine the same concept in a related area and find that online customer ratings and positive reviews significantly affect consumers’ intentions to post positive reviews. Finally, a study by Chevalier and Mayzlin concluded that consumer review information influences sales for the less well-known books, and that readers do not fully use the information available about the books, instead relying on word of mouth for the more popular books.

Online customer reviews have become increasingly important to firms as they attempt to determine the potential sales impact of the information consumers obtain from consulting reviews. This increased scrutiny implies that every aspect of consumer review creation and awareness focuses on the influence of online reviews on consumer decision-making. The majority of related studies have centered on determining this relationship and conclude that online reviews significantly influence consumer purchase decisions. This significant influence has led to explorations of what sort of opinions are more likely to impact purchase decisions and under what conditions the impact is strongest. These studies suggest that the volume of reviews present is important in the consumer opinion process, as are the direction, valence, and relevance of the content of the consumer review.

4. Strategies for Businesses to Manage and Leverage Online Reviews

In this research, the specific strategies that companies use to create and/or modify online customer reviews, and the specific strategies that consumers use to assess these manipulated customer reviews, to help both companies and consumers increase the reliability of online customer reviews, to avoid seriously discrediting themselves, and/or to gain a better business assessment, are described and analyzed. The research results are expected to be used as the basis for future company and consumer behavior studies of online customer reviews. The implications are then discussed.

Just as businesses have strategies to drive more reviews from customers, update specific reviews, represent a desired shift in how consumers evaluate the product, and present aspects that are favorable to consumers, consumers also have strategies in how they assess online customer reviews. These strategies include considering the distribution of ratings and the relationships between companies. For example, consumers believe that touch points must be synchronized in order to avoid seriously discrediting themselves. They clearly see the lack of synchronization as a company that is not to be trusted and have similar beliefs about the company’s top management team.

5. Conclusion and Future Directions in Online Review Research

The results of this paper indicate that demographic characteristics and cues specific to web browsing have no significant relationships with customer purchasing intentions other than age. Future directions can extend this study by evaluating how the features of customer reviews relate to ratings or perceived physical qualities of the product through multiple perspectives. Previous research studies have demonstrated that savvy customers overcome anxiety by means of customer reviews to help mitigate trust issues. Longitudinal reviews of purchases propound that a demographic or personality profile of regular overviews may be established characteristics.

This paper examines the ways in which consumer purchasing decisions are impacted by online consumer reviews, a valuable source of information for a retailer. We found that multiple reviews have a greater impact on consumer purchase intention than the number of stars in one review of the first and second stage of the purchase funnel. However, social trust is also an important factor when attached to online customer reviews. Our results are significant because a recent series of papers have found that the reliability of ratings is a significant factor in overcoming perceived risk. Hence, online reviews, through diminishing perceived risk, serve as a vehicle to increase the level of e-commerce.

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