The Influence of customer Reviews on Purchase Decisions

Abstract

Customer reviews have become an essential component of the daily functioning of most internet-based e-commerce companies. Based on the findings of a poll conducted by the Pew Research Center's Internet & American Life Project, 58% of individuals in the United States engage in online research on products and services prior to making a purchase. According to Jansen (2010), 24% of purchasers provide comments or reviews online after making a purchase. An increasing number of research using data from online consumer reviews demonstrate the rising significance of electronic word-of-mouth (eWOM) in the prosperity of online commerce. The concept of word-of-mouth (WOM) has been extensively examined in marketing literature from the mid-twentieth century, as explored by Katz and Lazarsfeld in 1955. Nevertheless, with the emergence of the internet, the expression has acquired significant significance. Word-of-mouth (WOM) has traditionally been limited to a small social network and is known for its temporary nature. However, this has led to its wide reach and long-term availability (Breazeale, 2009; Chen and Xie, 2008; Davis and Khazanchi, 2008; Duan et al., 2008a). Consequently, electronic word-of-mouth (eWOM) has become a reliable and credible source of customer information for many research purposes (Li and Hitt 2010). Dellarocas (2003) and Godes and Mayzlin (2004) made initial scientific contributions to the transformations that occur in online word-of-mouth (WOM).