The Effect of Online Consumer Reviews on New Product Sales

Authors:
Geng Cui;Hon-Kwong Lui;Xiaoning Guo
Affiliations:
Yunshan Scholar of Guangdong University of Foreign Studies, Guangzhou, China;Lingnan University, Hong Kong;Carl H. Lindner College of Business, University of Cincinnati
Venue:
International Journal of Electronic Commerce
Year:
2012

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Abstract

This study examines the effect of online reviews on new product sales for consumer electronics and video games. Analyses of panel data of 332 new products from Amazon.com over nine months reveal that the valence of reviews and the volume of page views have a stronger effect on search products, whereas the volume of reviews is more important for experience products. The results also show that the volume of reviews has a significant effect on new product sales in the early period and such effect decreases over time. Moreover, the percentage of negative reviews has a greater effect than that of positive reviews, confirming the negativity bias. Thus, marketers need to consider the distinctive influences of various aspects of online reviews when launching new products and devising e-marketing strategies.