A study by the Center for Customer Insights at the Yale School of Management on the effects of consumer reviews on online book sales concluded that this community content has an impact on consumers' purchases.
The study, by professors Judith Chevalier and Dina Mayzlin, aimed to determine whether differences in customer reviews across the two US websites affect sales.
Chevalier and Mayzlin chose random samples of titles from Global Books in Print and Publishers Weekly bestseller lists. The book and review data was collected from the Amazon and Barnes & Noble websites.
For each book, the researchers looked at price, shipping time, sales rank, the number of reviews, and the average number of stars assigned by reviewers.
The addition of favorable reviews at one site increased book sales at that site relative to the other retailer. The researchers also found that negative 'one-star' reviews carry more weight with consumers than positive 'five-star' reviews.
The impact of a negative review is more powerful in decreasing book sales than a positive review is in increasing sales. The authors attributed this to the credibility consumers place on the reviews.
For example, multiple glowing reviews for a book may be perceived as hype generated by an author or publisher.
Overall, reviews are overwhelmingly positive at both sites, but reviews at Amazon were found to be longer and more detailed. Although the results stop short of showing that the retailers profit from providing customer reviews, the authors assert that it is plausible.
"Our results show that customers behave as if the fit between customer and book is improved by using reviews to screen purchases," said Professor Mayzlin.
"Since Amazon has a lot of reviewing activity, and its reviews are on average quite positive and lengthy, we can speculate that the total number of books sold at Amazon is higher than it would have been without the customer review feature. "
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