Choosing Who To Buy From: Why User Reviews Are More Important Than Just A Low Price in E-Commerce

Abstract

Consumers today have both more options of goods to buy and more information about those goods than ever before. Now, shopping in an e-marketplace involves the consideration of more products and more sellers at more price points. In such a complex commerce world, how do you develop the right price strategy and increase sales? My findings, recently published in the Journal of Advertising Research (“How Do Consumers Choose Sellers In E-Marketplaces”) show that the cheapest version of a product is not always the one chosen. Products with strong word of mouth may have greater preference.

There are interesting dynamics at hand. Observational and eye tracking research on anchoring (the lead or display priced product) and eWOM (seller review volume, also known as Electronic Word of Mouth) was conducted.