When buying products online, there is always a certain level of uncertainty for consumers because they cannot try out products or check the quality. This uncertainty influences their purchasing decisions. In order to accommodate consumers with their purchasing decisions e-commerce vendors provide different methods for consumers to gauge the quality of the product. This can be done by the following online product recommendation (OPR) methods: IT-enabled provider recommendations (PR) and consumer reviews (CR). The existence of OPR is important in order to provide shopping assistance and help buyers and sellers reduce information overload. Currently it is estimated that about 43% of e-commerce vendors offer PR and CR.
First of all, PR and CR can be defined as follows. Provider recommendations are internet-based software that execute operations for users in order to provide shopping advice for consumers based on their needs, preferences, profiles and previous shopping activities. Consumer reviews on the other hand are reviews written by consumers and are based on the user experience and own subjective thoughts about the purchased products. Several comparisons between PR and CR are made that show the difference between the two. PR usually include key product attributes and product descriptions generated by the provider, while CR can also be used to recommend different product items such as alternatives for the product that the review is about.
In this paper the main research goal is to find out whether consumers are more responsive to recommendations generated by e-commerce providers through agent technology or whether they are more inclined to prefer recommendations generated by other consumers. More specifically the researchers are interested in finding out how PR and CR compare in evoking consumers’ instrumental, affective and trusting beliefs, and how this affects the OPR usage and product purchase intentions.
In order to test the effects of PR and CR on consumers’ instrumental, affective and trusting beliefs, the researchers created an laboratory experiment in which different product types in conjunction with either PR or CR were manipulated between subjects. For this experiment Amazon was used as the study context as it is one of the market leaders when it comes to e-commerce retail.
The results demonstrated that CR were superior to PR when it came to influencing consumers’ trusting and affective beliefs. On the other hand PR appeared to be more effective on instrumental consumer beliefs. It can be argued that PR and CR have different relationship building orientations: PR seems to be more effective for transactional relationships, while CR appear to be more efficient when it comes to building trust and affection.
The study does have some limitations. For example, the research model was solely based on one website (Amazon.com) and the results could have been different with other e-commerce retailers. All in all, this paper provided guidance to e-commerce retailers, as this paper showed that providing appropriate OPR will result in customers enjoying their shopping experience more and customers will perceive the system to be improving their shopping experience.
Benlian, A.; Titah, R. & Hess, T. (2012), ‘Differential Effects of Provider Recommendations and Consumer Reviews in E-Commerce Transactions: An Experimental Study.’, J. of Management Information Systems 29 (1) , 237-272 .