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Faculty research: Can a single review determine the fate of a product?

Yes, if it is the product’s first review.

The Wall Street Journal featured recently published research by Sungsik Park, Moore School marketing assistant professor. Park’s research entitled, “The Fateful First Consumer Review,” is forthcoming at Marketing Science. Park and his co-authors, Woochoel Shin and Jinhong Xie from the University of Florida examine how a negative first online review for a product can have a detrimental effect on future sales.

Read below as Park describes their findings and what they mean.

According to you and your co-authors’ study, what is the impact of a first review? 

  • The impact of the first review on average ratings of products lasts long, though it decreases over time. The average rating of products with a negative first review is 0.29 stars lower than that of products with a positive first review, at the end of the first year (after the first review).
  • The impact of the first review on the number of reviews increases with time. For the same product, the number of reviews on sites with a positive first review generates 15 more reviews after six months and 36 more reviews after 1 year than those with a negative first review.  
  • The impact of the first review on the two metrics — average ratings and number of reviews — persists over 3 years.
  • We replicate this finding with different product categories (vacuum cleaners, toasters, digital cameras) and from multiple pairs of websites (Amazon U.S. & Best Buy, Amazon U.S. & Amazon Canada).


Why is “The Fateful First Consumer Review” important for companies/manufacturers? 

  • We find that even good products may fail to generate enough reviews reflecting their quality if the first online review is negative. The adverse impact of a negative first review can last 3 years.


For first reviews, you mention not only is there a long-lasting (dis)advantage in future word-of-mouth attractiveness of a product but also an increasing (dis)advantage in future word-of-mouth intensity. What does this mean for companies? For consumers? 

  • It would be dangerous to assume that the impact of the negative first review will disappear as more reviews are posted. Firms need to act against the negative first review immediately since its impact is long-lasting. 
  • Consumers need to be aware how informativeness of reviews can be easily distorted by the negative first review. 

You mention these are theoretical predictions but were also supported by your empirical investigations — how were you able to test your theory? What sample did you use and why did you choose that particular sample to test your theory? 

  • A major challenge in testing theory is that higher-quality products are more likely to receive a positive first review. So, we match identical products across two websites (Amazon U.S. & Best Buy; Amazon U.S. & Amazon Canada) and see how positive and negative first ratings can lead to different outcomes — average ratings and number of reviews.
  • In our theory, for the first review to be effective, user reviews should influence consumers’ purchase decisions. A recent study suggests that vacuum cleaners, toasters and digital cameras would serve as good categories. This is because consumers purchase these products infrequently, are likely to be less informed and hence more likely to rely on review information.

 
Your abstract’s example says that you looked at vacuum cleaner models offered by Amazon and Best Buy where the first review was either positive or negative. How did these opposing first reviews impact the respective company’s sales or popularity of their items?

  • We could not measure sales directly. But the impact of the first review on the number of reviews increases with time. Since the number of reviews can be viewed as an outcome of sales, we infer that the first review has a significant impact on sales as well as the popularity of the product.


You call this phenomenon a “crucial weakness in the user-generated information mechanism.” Why is identifying this weakness important? 

  • According to a recent survey, more than 85 percent of consumers read product reviews prior to making a purchase decision. In doing so, consumers assume that user reviews convey meaningful information to them. Yet, our study finds a condition where product review information can be easily distorted, i.e., by a single review.
  • Suppose the true quality of a product is 4.7 stars. If the very first review happens to be a one-star rating, then the average rating of this product may never reach 4.7 stars because consumers may be dissuaded by the negative first review from buying the product, thus limiting additional reviews.

What are the implications for online sellers, e-commerce platform providers and consumers? 

  • Online sellers need to be vigilant. If the first review happens to be negative, then they need to take action. Amazon recently introduced “Early Review Program” that sellers can use to generate early reviews. 
  • Platforms need to think about how to facilitate review generation so that a negative review does not skew the review information. In fact, many platforms have started doing so. For example, Amazon recently introduced a “one-click” rating system. That is, buyers can submit their ratings with one click. By simplifying the process, Amazon hopes to encourage more buyers to write reviews.

Consumers should check reviews from multiple websites to get a better sense of a product’s quality. Consumer ratings on any one website may not reflect the product’s true quality, especially if the first review is negative.


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