This study found how online reviewers specifically choose what products to review and what rating to post, in order to gain attention and raise their reputation. These days, the top online reviewers can make a lot of financial gains when they have lots of attention of consumers. They can also monetize the attention and reputation they build up. This study focuses on Barnes & Noble and Amazon, from where the researchers used book reviews. The research focussed on the effect of a reviewer ranking system. This is a ranking system which lets top reviewers consistently gain future attention, because this system build up online reputation for reviewers. When looking at Barnes & Noble, which does not have a reviewer ranking system, we see that reviewers cannot build up a reputation. The research proposes that reviewers may behave more strategically so that they gain attention and enhance reputation when there is a mechanism to quantify their online reputation (Shen et al., 2015).
The researchers found that reviewers on Amazon are sensitive to the competition between existing reviews and they thus lean to avoiding crowded review segments. However, when looking at Barnes and Noble, reviewers clearly not respond to competition effect. Again, it is important to note that Amazon has a ranking mechanism, where Barnes & Noble has not. The study shows that there are more differentiated ratings on Amazon, compared with Barnes & Noble, due to the more intense competition for attention on Amazon. Overall, the researchers state that there is more strategical behaviour among reviewers on Amazon, compared to Barnes & Noble (Shen et al., 2015).
The results of this study show that online reviewers certainly do not randomly select a book to review. Instead, they lean to choosing a popular book to review. When a ranking system is present, reviewers tend to avoid products having a crowded review segment. This means that reviewers try to reduce competition for attention. To conclude, reviewers post more differentiated ratings when there is a reviewer ranking system that enhances the competition for attention between reviewers (Shen et al., 2015).
The study presents some evident strengths. First, the study presents important managerial relevance. Companies can improve the design of their online review system, increasing their own understanding of the strategic behaviour of reviewers. The second strength of this study that the researchers randomly selected 500 electronic products on Amazon (TV’s, laptops, tablets, etc.). This was done to conduct cross category comparison, in order to be able to generalize the found results from books to other product categories (Shen et al., 2015).
A potential weakness of this study could have been the sample selection bias (reviewers may behave differently when reviewing different types of products). But to eliminate this bias from only using books, the researchers collected reviews from the electronic products category. The electronic products category results are consistent with the previous results from the Amazon books, showing that the main results are robust (Shen et al., 2015).
I think the managerial relevance is the most important part of this study. Increasing the design of the online review system will most likely lead to strategic advantages for online retailers. However, retailers can pay top reviewers to promote products regardless of product quality. This transparency question is a discussion point in my opinion.
Bremner, S. (2016). How Do Amazon Reviews and Rankings REALLY Work?. [online] Steve Bremner. Available at: http://stevebremner.com/2016/05/how-do-amazon-reviews-and-rankings-really-work/ [Accessed 16 Feb. 2017]. (cover image)
Shen, W., Hu, Y.J., Ulmer, J.R. (2015) ‘Competing for attention: an empirical study of online reviewers’ strategic behaviour’, MIS Quarterly 39(3): 683-696.