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Rotten tomatoes and 2 thumbs up

How retailers can interpret and utilize variations in online reviews

Journal of Retailing at New York University

If the technical features of a new camera delight the tech experts but leave consumers scratching their heads, how should a retailer's website present those views and what sales results could it expect?

A paper to be published in the September issue of the Journal of Retailing provides insights on the relatively new phenomenon of online user reviews.

In "User Reviews Variance, Critic Reviews Variance, and Product Sales: An Exploration of Customer Breadth and Depth Effects," Feng Wang of Hunan University, Xuefeng Liu of Loyola University Maryland, and Eric Fang of the University of Illinois at Urbana-Champaign teamed up to explore how sales fare when online shoppers find wide variation in product reviews.

The authors analyzed data in three product categories: movies, digital cameras, and books. Accepting that positive user reviews lead to increased sales, they sought to tease out what happens when reviews are widely varying and when user reviews don't agree with expert reviews.

They found that mixed reviews are a double-edged sword that can either hurt or help product sales, depending on critic reviews and other signifiers of quality that the retailer may promote. When user reviews are widely varying, what the critics or experts have to say becomes more important. If there's significant variation within both user and critic reviews, it's not necessarily bad for sales, the authors discovered. That's when so-called niche users seek out which aspects of the product were liked or disliked and look for qualities that match what they're searching for. One person's much-anticipated subtitled, cerebral foreign film is another person's "must miss."

The authors suggest ways for retailers to take advantage of the variation in online user reviews when implementing customer relationship management.

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