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The advent of the Internet has radically changed the way in which consumers can receive information about products they consider purchasing. While years ago we could only trust the opinion of our relatives and friends who have already used the product in question, or the information provided by the seller (though highly likely to be biased), nowadays we have an easy access to a great number of online reviews for various products and services. In popular websites like Amazon, TripAdvisor and IMDB people can find reviews for everything from camping lanterns, to places where to eat in Mexico City, or the new movie starring Leo diCaprio. This has become possible due to the rise of the so-called electronic word-of-month (e-WOM), or the phenomenon of people sharing with peers their opinions and experiences with certain products and services over the Internet.

Studies show that the impact of online reviews on sales of products and services is considerable (Forman and Wiesenfeld, 2008; Duan and Winston, 2008). A number of scholars claim that factors such as the length of the online review, the style of writing and the content affect the strength of the influence of the review on the purchasing decision of the customer (Otterbacher, 2009; Liu et al., 2008). However, little focus has been put on the impact of the person who writes the reviews.

With this in mind, Banerjee et al. (2017) took the research endeavor to investigate whether the overall trustworthiness of reviewers has any impact on the number of customers visiting the business that has been reviewed, and also which reviewer characteristics determine the trustworthiness of the reviewer. In order to achieve this goal, the authors used as a foundation the Source Credibility Theory (SCT), which argues that the trustworthiness of the information source improves the perceived credibility of the source, and as a consequence the persuasiveness of the communication in online reviews. Using a dataset with more than 2.2 million observations from Yelp.com the authors tested two sets of hypotheses, one assessing whether the online reputation of the business leads to higher business patronages and whether this is moderated by the trustworthiness of the reviewers, and the second set testing what factors impact the trustworthiness of the reviewers.

Summary of findings

Hypothesis:	Result:
1a: Review-based online reputation of a business is positively associated with the patronages generated by the business.	Supported
1b: Average perceived trustworthiness of reviewers reviewing a business positively moderates the association between online reputation and patronages of the business.	Supported
2a: Reviewer’s positivity in rating businesses is positively associated with the perceived reviewer trustworthiness.	Supported
2b: The amount of reviewer’s involvement in reviewing businesses is positively associated with the perceived reviewer trustworthiness.	Supported
2c: Reviewer’s experience in an online review website is positively associated with the perceived reviewer trustworthiness.	Supported
2d: Reviewer’s reputation in an online review website is positively associated with the perceived reviewer trustworthiness.	Supported
2e: Reviewer’s competence in writing useful reviews is positively associated with the perceived reviewer trustworthiness.	Supported
2f: Reviewer’s sociability as perceived by other users of a review website is positively associated with the perceived reviewer trustworthiness.	Supported

Table 1. Summary Results

Relevance, strengths and weaknesses

A strong point of the paper by Banerjee et al. (2017) can be traced to the academic contributions that it makes. The study is the first to integrate in one model various reviewer characteristics that have an impact on the trustworthiness. Contrary to previous studies that examine the phenomenon based on one or two characteristics, the authors of the paper use six different attributes; hence they study trustworthiness from various different angles and provide a more complete understanding of the factors that influence it. Additionally, the paper has strong managerial implications, as it presents evidence that businesses are impacted by their online reputation. Therefore, management should encourage the regular submission of reviews from their customers, but should also ensure that their customers are satisfied with their products, so that the reviews submitted are positively inclined. Moreover, as the study finds that trustworthiness of the reviewer increases the strength of the relationship between online business reputation and business patronages, managers should try to find ways in which they can encourage the most trustworthy reviewers to submit reviews.

On the other hand, the study does not come without limitations. A weakness of the paper is that when it considers the impact of online review reputation of a business, they only account for the increase in the business patronages, measured as the number of check-ins, but they do not provide evidence whether this increase leads to more tangible benefits such as increase in sales. Additionally, although a number of characteristics are considered that impact the trustworthiness of the reviewer, the list is arguably far from exhaustive. Certain cues such as whether the profile of the reviewer has a picture, for example, were ignored by the authors but can arguably also impact the findings of the study. Finally, the paper is based on data solely from one website, which decreases the generalizability of the findings. This, however, provides directions for future research, as the findings made by this paper can be tested in other websites/platforms where the importance of online reviews is high, such as TripAdvisor, Booking.com, etc.

Sources used:

Banerjee, S., Bhattacharyya, S. and Bose, I. (2017). Whose online reviews to trust? Understanding reviewer trustworthiness and its impact on business. Decision Support Systems, 96, pp.17-26.

Duan, W., Gu, B. and Whinston, A. (2008). Do online reviews matter? — An empirical investigation of panel data. Decision Support Systems, 45(4), pp.1007-1016.

Forman, C., Ghose, A. and Wiesenfeld, B. (2008). Examining the Relationship Between Reviews and Sales: The Role of Reviewer Identity Disclosure in Electronic Markets. Information Systems Research, 19(3), pp.291-313.

Liu, Y., Huang, X., An, A. and Yu, X. (2008). Modeling and Predicting the Helpfulness of Online Reviews. 2008 Eighth IEEE International Conference on Data Mining.

Otterbacher, J. (2009). ‘Helpfulness’ in online communities. Proceedings of the 27th international conference on Human factors in computing systems – CHI 09.

You bought too much food this week but tomorrow you go on vacation, so you don’t know what to do with it? Or have you changed your mind for what to cook and want to get rid of the food you have in your fridge but you feel bad throwing it away? Maybe your unwanted veggies will be your next-door neighbor’s treasure but you never talked to them before so you think it might be awkward offering them your food? Worry no more, OLIO will solve your problem and save your food from being wasted!

What is it?

OLIO is an app that started the food sharing revolution in 2015. Classified as the “tinder for leftovers” (Vaughan, 2017), OLIO helps you connect with people around you, as well as with local businesses in order to share your unwanted food with others, instead of throwing it away. The idea for developing the app struck Tessa Cook in December 2014 while she was packing up her apartment in Switzerland, ready to move back to the UK. As it normally happens at moments like this, she had food left in her fridge that she couldn’t finish but also did not want to throw away. After realizing how much food ends up being thrown away in similar situations, she teamed up with a friend of hers, Saacha Celestial-One and the two of them started working on the idea of OLIO. The vision guiding the two women was to create a world in which “nothing of value goes to waste, and every person has enough to eat” (Olioex.com, 2018). Even for the short period of its existence, the app has become a huge success. Currently it has more than quarter million users in 41 countries worldwide, and nearly half a million food pieces have been saved since the app started.

How does it work?

The way OLIO works is simple and intuitive. Each user has a profile page where they can put a photo and briefly describe who they are. After setting up their profile, app users just need to add a photo and description of the item they want to sell, as well as specify from where and when the item can be picked up. The app has a browsing catalog with all items available near the user. Once the users have found a product they like, they simply need to request it and arrange convenient time to pick it up with the seller via a private message. Users can also rate and review other users based on the experience they have had with them. This also facilitates a safer sharing process, as users can decide for themselves with whom to share their food based on the other’s profile and ratings.

Reducing food waste through shared economy

OLIO is an example of how shared economy can be used to tackle one of the major problems societies face today: food waste. Studies shows that as much as 50% of the food produced globally is never eaten and is thrown away, making the food waste a $1 trillion problem (Olioex.com, 2018). By providing a C2C platform that connects people who want to share their food, the app does not only help in cutting food waste, but also brings people, especially neighbors, together and builds a food sharing community. The founders initially did not raise any revenues, as the main goal was to grow their network and gain more popularity. Currently, the revenue-based business model is followed, as the app charges commission fees for those items that are paid directly through the app or for donations made through the app. Nevertheless, buyers and sellers are also given the opportunity to just use the app to connect with each other without making any payment transactions through the app. In these cases, sellers can post their unwanted food items for free, while buyers derive a benefit by getting food items for free or for super low prices (Nair, 2016). In this way joint profitability is achieved for all parties involved.

What’s next?

After seeing how successful their OLIO initiative has become, the founders took a next step by teaming up with two charities, Feedback and FareShare in order to increase the reach of their fighting-food-waste efforts. A new addition to the app allows users to add not only food, but also other household items and to request a pay-as-much-as-you-like donation for one of the charities (Olioex.com, 2018). The founders have also started collaborations with more than 11,000 volunteers who have the mission to spread OLIO’s vision and goals around the world.

The food sharing revolution that OLIO has started is now also embraced by other companies. Leftoverswap, Foodsharing.de and Eatro are among the other apps offering similar ways in which people can share their food. Despite the fact that competition for OLIO is growing, the rise in other initiatives supporting food sharing can only be seen as something positive, as it brings society a step further in its fight with food waste!

References:

Nair, P. (2016). Food waste: there’s an app for that. [online] Growth Business. Available at: http://www.growthbusiness.co.uk/food-waste-theres-app-2543941/ [Accessed 2 Feb. 2018].

OLIO. (2018). About. [online] Available at: https://olioex.com/about/ [Accessed 2 Feb. 2018].

OLIO. (2018). Charitable donations. [online] Available at: https://olioex.com/charitable-fundraising/ [Accessed 2 Feb. 2018]

Vaughan, P. (2017). The app that’s kickstarting a food-sharing revolution. [online] Huck Magazine. Available at: http://www.huckmagazine.com/art-and-culture/olio-app-food-free-socially-conscious-waste-sharing/ [Accessed 2 Feb. 2018].