European Journal of Marketing

The impact of online user reviews on cameras sales

Lin Zhang Baolong Ma Debra K. Cartwright

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Lin Zhang Baolong Ma Debra K. Cartwright, (2013),"The impact of online user reviews on cameras sales", European
Journal of Marketing, Vol. 47 Iss 7 pp. 1115 - 1128
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Jan Ahrens, James R. Coyle, Michal Ann Strahilevitz, (2013),"Electronic word of mouth: The effects of incentives
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Hua-Ning Chen, Chun-Yao Huang, (2013),"An investigation into online reviewers' behavior", European Journal of
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The impact of online user reviews

on cameras sales

The impact of
online user
reviews

Lin Zhang
School of Business, Truman State University, Kirksville, Missouri, USA

1115

Baolong Ma
School of Management and Economics, Beijing Institute of Technology, Beijing,
PR China, and

Received 28 December 2011

Revised 13 April 2012
Accepted 11 June 2012

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Debra K. Cartwright
School of Business, Truman State University, Kirksville, Missouri, USA
Abstract
Purpose The purpose of this research is to help better understand the impact of online user reviews
on sales of search goods.
Design/methodology/approach This research is based on digital camera sales data collected
from amazon.com and two studies are included in this research. The first study is based on a static
model and sample data from one time stamp. The second study is based on two sample data collected
from two different time stamps, and a dynamic model is proposed.
Findings The results from the first study reveal that the average online customer review, the
number of online reviews, the price and the cameras physical properties such as the number of pixels
and the optimal zoom number (but not LCD screen size) have significant influence on digital camera
sales. The results from the second study show that the sales from the previous period are an important
indicator for future sales. In addition, change in price, change in average online review rating and
change in the total number of online reviews are all significantly associated with future sales.
Research limitations/implications The research reveals that there is a significant relationship
between the online user review and sales of search goods, and the influence of online user reviews on
search goods sales is different from that on experience goods. It also recognizes that the product
specifications influence the sales of search goods. In addition, the research on search goods shows that
price at the specific time and price changes are significant factors affecting sales.
Practical implications The research indicates that retailers should provide channels for, and
encourage, customer online reviews for search goods to improve sales. It is also beneficial for online
retailers to provide detailed product attributes to help their customers make the purchase decision.
Carefully designed and executed price promotions could also be effective ways to improve sales of
searchable goods.
Originality/value This study is one of the first attempts to investigate the impact of online user
reviews on sales of search goods.
Keywords Online customer review, Word of mouth, Technology products, Search goods,
Marketing strategy, Sales strategies, Cameras
Paper type Research paper

This research was partly supported by the National Natural Science Foundation of China under
Grant 71002102 and the Key Project Cultivation Fund of the Scientific and Technical Innovation
Program, Beijing Institute of technology (2011DX01001).

European Journal of Marketing

Vol. 47 No. 7, 2013
pp. 1115-1128
q Emerald Group Publishing Limited
0309-0566
DOI 10.1108/03090561311324237

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1116

Introduction
In the internet era, online user reviews have emerged as an important source of
information to consumers, substituting and complementing other forms of offline
word-of-mouth (WOM) communication about product quality and customer service.
One of the advantages of online WOM, compared to the classical offline WOM, is its
accessibility: individuals can make their opinions easily accessible to other internet
users, and at the same time, potential new customers can easily access the online
reviews from existing customers (Dellarocas, 2003). Past research has shown that the
online user review has a significant impact on customers purchase behavior (Chevalier
and Mayzlin, 2006; Clemons et al., 2006), and therefore influence product sales (Chen
and Xie, 2008).
Most of the existing research about online user reviews has focused on experience
goods (Chevalier and Mayzlin, 2006; Clemons et al., 2006), while little effort has been
made focusing on search goods. In an attempt to explore the importance of online user
reviews on more general products, the current research will investigate whether online
user reviews influence the sales of search goods, and if so, how it works and whether
there is any difference between their influence on search goods and experience goods.
Specifically, using data collected from a major online sales website, we make an initial
attempt to investigate the impact of online user reviews on digital camera sales.
The remainder of this paper is organized as follows. We begin with a review of the
relevant literature about WOM, online user reviews, search goods and experience
goods, followed by the introduction of two empirical models and the data used in these
studies. The next section reports the results followed by our discussion and
conclusions.
Literature review
Online user reviews and traditional WOM
The basic definition of WOM is informal advice or communication about products,
services, and firms that can be spread from one consumer to another in person or via a
communication medium (East et al., 2007). WOM research has attracted continuous
academic and practitioner interest (Anderson, 1998; Goldenberg et al., 2001; Huang
et al., 2011; Stokes and Lomax, 2002). Because WOM is initiated by customers
independent of the market, it is perceived to be more reliable and trustworthy than
firm-initiated communications. As one of the most powerful marketing communication
channels, it has been widely accepted that WOM is closely related to a firms success
(Godes and Mayzlin, 2004).
The development of the internet and information technology provides consumers an
online communication channel to share their product evaluations. Associated with this
process, the online consumer product review emerges as a new market phenomenon
and is playing an increasingly important role in influencing consumers purchase
decisions (Chen and Xie, 2008). Compared to traditional WOM, the influence of which is
typically limited to a local social network (Shi, 2003), the impact of online consumer
reviews can reach far beyond the local community, because consumers all over the
world can easily access a review via the internet. In addition, traditional WOM is
generally not a direct decision variable for the product sales (Chen and Xie, 2008), but
recent research has found a direct connection between online user reviews and product
sales (Chevalier and Mayzlin, 2006). For example, existing studies have shown that

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online user reviews have a significant positive impact on experience goods like books
(Chevalier and Mayzlin, 2006), beer (Clemons et al., 2006), movies box office revenues
(Duan et al., 2008) and hotel business (Ye et al., 2009).
Experience goods and search goods
Experience goods are evaluated predominately by subjective experience, and
customers require sampling or purchase in order to evaluate product quality; while
search goods are mostly evaluated by objective properties and the customers do not
require interaction in order to evaluate the product (Nelson, 1970, 1974). Examples of
experience goods include music, books and beer; and examples of search goods include
cameras (Nelson, 1970).
With the development of the internet and the prevalence of online product review
information, all attributes of search and experience goods are searchable and the
traditional distinction between experience goods and search goods has been reduced
(Huang et al., 2009). However, recent research has found that the distinction between
search goods and experience goods is still valid (Mudambi and Schuff, 2010) due to the
different ways the product related information is accessed and processed (Huang et al.,
2009). Compared to consistent findings that the online review affects sales of
experience goods (Chevalier and Mayzlin, 2006; Clemons et al., 2006; Duan et al., 2008;
Huang et al., 2009; Mudambi and Schuff, 2010; Ye et al., 2009), the limited research on
search goods shows mixed results. For example, Huang et al. (2009) studied customers
online purchase behavior and concluded that the online consumer review is not
important for search goods, while Mudambi and Schuff (2010) showed that online
customer reviews are helpful for search goods. However, neither study used actual
sales data in their research. The purpose of this study is to examine the connection
between actual sales of search goods and online user reviews.
Online user reviews and experience goods
The impact of online customer reviews on experience goods has been extensively studied
and it is widely accepted that online customer reviews can help boost the sales of
experience goods. However, there are still some inconsistencies about which aspect of the
online user review works. For example, by comparing the sales data and customer
reviews from Amazon.com and Barnesandnoble.com and using a differential model to
focus on relative sales and the difference in customer reviews, Chevalier and Mayzlin
(2006) found that both the average online user review rating and the number of online
reviews have a significant influence on book sales. They also found that negative
reviews (one-star reviews) have a greater impact on book sales than positive reviews
(five-star reviews). Clemons et al. (2006) demonstrated that the quantity of customer
reviews is a good predictor for beer sales, while the average rating is not. Ye et al. (2009)
extended their research into the hotel business and found that the average online
customer review rating and the variance of the ratings both influence hotel bookings.
Most of these studies assume that the online user review is the precursor of sales,
however, a recent study conducted by Duan et al. (2008) questioned this proposition.
They used a dynamic simultaneous equation model and assumed that the online
customer reviews were both the precursor to and the outcome of retail sales. Their
results identified a positive feedback relationship between online user reviews and
movie box office revenue: the movies box office revenue and online customer review

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valence significantly influenced WOM volume, and the volume of online reviews in
turn led to higher box office performance.
Online user reviews and search goods
According to Chen and Xie (2008), online customer reviews about high technology
products are likely to be more relevant to customers than seller-created information.
Seller-created information is more product-oriented, and often includes the products
technical specifications. For example, seller-created information about a digital camera
very likely includes the optical zoom number, the LCD screen size and the number of
pixels. Although these product details are important for the customers to make their
purchase decision, they are not enough. Sometimes, the customers are also interested in
how other customers feel about the technological specifications and their conclusions
about the camera based on the specifications (for example, whether the product is user
friendly or not, and whether the product is reliable or not). This kind of information can
be found in online reviews provided by consumers who are knowledgeable about the
product category or have used such products. In addition, consumers who lack
expertise with the products might have difficulty understanding the benefits from
product attribute specification. Some online customer reviews will definitely help those
unsophisticated customers. Based on the above arguments, we expect that online user
reviews will have a positive influence on sales of search goods.
According to Huang et al. (2009), consumers tend to collect more search attributes like
price and product specifications when purchasing search goods. We therefore expect that
product specifications also affect the sales of search goods. Considering that any product
can be described as existing along a continuum from pure search goods to pure
experience goods, we chose the digital camera for this research because it represents the
pure search goods end of the continuum (Mudambi and Schuff, 2010) and has the key
product attributes of optical zoom number, pixel resolution, and display size.
Methodology
Study 1
Data. Our research is based on the data collected from amazon.com, the biggest online
retail store in the USA. Amazon.com provides the sales rankings of all new point and
shoot digital cameras periodically, and these rankings will be used in the study. In this
research, the first data collection was on October 17, 2009. All web pages were
downloaded into a folder using a crawler. The data for all cameras were categorized
into a spreadsheet and include the sales ranking for each new point and shoot digital
camera, the price, the optical zoom number, the number of pixels, the LCD screen size,
and the online customer reviews.
Amazon.com provides a five-star system for customer reviews, with five stars
representing the best evaluation and one star indicating the worst evaluation. In
addition, it also orders reviews according to two additional priorities: the most helpful
reviews (based on how many consumers agree with the review) and the most recent
reviews (based on when the review was posted on the website). The recorded review data
is divided into three parts: the overall review (including the number of existing reviews
and the distribution according to the number of stars assigned by the reviewer), the most
recent reviews (similar statistics for the most recent twenty reviews) and the most helpful
reviews (similar statistics for the 20 most helpful reviews).

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We only collected information for brand new cameras, and skipped that of used
cameras. The listed items on Amazon.com can also be classified into two groups: those
with the camera only and those having cameras and accessories (usually including
extra memory cards/stickers). The camera only items generally have higher sales
rankings (or larger sales volume) and are less expensive than the items that include
accessories. Our study seeks to investigate the relationship between the sales rankings
and the customers reviews, the cameras characteristics and the price. Including the
cameras bundled with accessories would complicate the influence of price on sales
ranking. Therefore, we only collected the items listed with cameras only, while
ignoring the bundled options. In cases where the same camera models with different
colors are listed as different items in Amazon.com, we listed each color as a separate
item. We did this for two reasons: first, the same model with different colors will likely
have different prices and different online customer reviews; second, different colored
cameras listed as separate items have different sales rankings.
Sometimes the listed item is shared by several featured merchants and sellers at
different prices. Normally the featured merchants have substantially more reviews,
higher store feedback and a better reputation than individual sellers (the store feedback
or review information is listed in Amazon.com). Because our model does not
differentiate between stores nor include store review information, we only recorded the
cheapest price from the featured merchants. If the listed item was not sold by any of the
featured merchants, then we disregarded the item. Therefore we guaranteed that all the
recorded items were from highly recommended merchants and consequently,
minimized the influence of the store on product sales. The price of each item
included both the price of the camera and its shipping cost.
The entire data set includes the collected data from 1,292 cameras and 63,121 online
reviews (among them, 36,205 are five-star reviews, 14,459 are four-star reviews, and the
number of three-star, two-star and one-star reviews are 4,243, 3,488 and 4,726
respectively). Apparently, five-star and four-star reviews are dominant, and this
observation is similar to previous findings for both search and experience goods
(Chevalier and Mayzlin, 2006; Mudambi and Schuff, 2010).
Empirical model. The dependent variable is the volume of sales for the product.
According to Chevalier and Mayzlin (2006), a products sales ranking on amazon.com is
related to its corresponding sales volume based on the following equation:
lnsales a b lnrank. At the website, the top-selling camera has a sales rank of
one, and the lower selling cameras are assigned higher sequential ranks. Therefore, by
recording the sales ranks of each camera on a specific day, we are able to infer their
relative sales volume.
It is reasonable to assume that the cameras physical specifications are important
factors influencing the customers purchase decisions. For example, when customers
are considering purchasing a camera, the optical zoom, the LCD screen size and the
pixel size of the camera are important factors influencing their purchase decisions.
These specifications can be easily found on the sellers website as seller created
information (for example, amazon.com) and these variables provided by seller should
be included in the model. The price of the camera is also an important factor in the
purchase decision and should be included in the model.
In addition, the online user reviews influence customers purchase decisions and
need to be included in the final model. How the online customer reviews affect

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experience goods sales was inconsistent in previous studies. For example, based on
panel data of movie box office sales, Duan et al. (2008) found that the total number of
online user reviews influenced the box office sales, while the average rating did not.
However, according to Chevalier and Mayzlin (2006), both the total number of online
user reviews and the average user review affected book sales. Their results also
indicated that one-star reviews carried more weight and credibility than five-star
reviews. Therefore, our original model included all these online review-related
variables: the total review number, the average review rating, the percentage of
five-star reviews and the percentage of one-star reviews.
Following the equation by Chevalier and Mayzlin (2006) and the above discussion,
the model we tested has the following equation:

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ln ranki al i bzi cpi bP ln P i b0 bA AveRating i b2 HiRatei

b3 LowRatei bN ln Numi :

In above equation, l i , zi and pi represent the LCD size, the optical zoom and the number
of pixels for the camera respectively. P i , ranki and AveRating i represent the price, the
sales ranking and the average customer rating of the camera respectively. The variable
HiRatei represents the percentage of five-star reviews among all the reviews; while the
variable LowRatei represents the percentage of one-star reviews. Finally, the variable
Numi represents the total number of the online customer reviews.
Results. SPSS was used to fit the multi-regression model. First, the data set
including the complete camera parameters and all online reviews was used in the
analysis. The analysis showed that there is multicollinearity among the average
customer review (VIF 12:5), the percentage of high ratings (VIF 6:2) and the
percentage of low ratings (VIF 6:9). This is reasonable because the average rating is
a function of the high and low rating percentages. Therefore, the following analysis
used either the percentage or the average rating, but not both. The results of the
analysis are summarized in the Tables I and II.
The data in Table I tell us that the model using the percentage of five-star and
one-star rating reviews is significant (F 125:2, p , 0:01). The independent variables
of camera price (B 0:68, p 0:00), pixels (B 20:22, p 0:00), optical zoom
number (B 20:07, p 0:00), total number of online reviews (B 20:21, p 0:00),
and percentage of one-star reviews (B 0:004, p 0:02) are all significant. However,

Table I.
Complete data with
percentage rating

Const.
Ln_P
Pixels
Zoom
Lcd
ln(Numi)
Hirate
Lorate

Std err.

p-value

VIF

5.35
0.68
20.22
20.07
0.02
20.21
20.002
0.004

0.32
0.55
0.01
0.01
0.08
0.02
0.001
0.002

0.00
0.00
0.00
0.00
0.84
0.00
0.16
0.02

1.56
2.07
1.18
2.00
1.24
1.45
1.54

Note: Adjust R-square is 50 percent, F 125:2, p , 0:01

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LCD display size (B 0:02, p 0:84) and percentage of five-star reviews

(B 20:002, p 0:16) are insignificant. Our results show that the percentage of
negative online reviews has more influence than the percentage of positive online
reviews on product sales, and this finding was also reported in previous studies
(Chevalier and Mayzlin, 2006; Yang and Mai, 2010).
The data in Table II indicates that the model using the average online user review
rating is also significant (F 145:9, p , 0:01). The independent variables of camera
price (B 0:68, p 0:00), pixels (B 20:22, p 0:00), optical zoom number
(B 20:07, p 0:00), total online review number (B 20:21, p 0:00), and average
user review rating (B 20:14, p 0:04) are all significant. However, LCD display size
(B 20:02, p 0:82) is insignificant.
Because the dependent variable is the logarithmic function of the sales ranking, if a
product has a lower sequential ranking, it has more sales. In this case, if the coefficient
is negative, it means that this variable has a negative influence on the product ranking,
or has a positive influence on product sales. Based on the results from Table I, the
number of pixels, the optical zoom number, the average online customer review and the
total number of online reviews are positively influencing sales: with a larger number of
pixels, higher optical zoom number, more online customer reviews or higher customer
ratings, a higher level of sales volume should be generated. On the other hand, a higher
price or more negative online customer reviews, negatively affects the sales of the
camera. These observations are reasonable and are in line with previous studies.
Next, we used the most recent twenty customer reviews and the most helpful twenty
reviews to do the same analysis. The adjusted R-square based on the most helpful
reviews (44 percent, p , 0:01, and F 76:7 when using high- and low-rating
percentages and 46.5 percent when using the average rating) and the most recent
reviews (43 percent, p , 0:01, F 75:4 when using high- and low-rating percentages
and 43.3 percent when using the average rating) is smaller than the adjusted R-square
based on using all reviews. The coefficients of these items (based on most helpful and
most recent reviews) are similar to those based on all reviews. Therefore, in the
following discussion, we only focus on the data including all reviews.

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Study 2
Data. Study 1 is based on a data set collected at one specific time and the results show
that the product specifications, the price, and the online user reviews all have a
significant effect on camera sales at that specific time. It would be helpful if we could
focus on the influence of online user reviews by collecting data from two different

Const.
Ln_P
Pixels
Zoom
Lcd
ln(Numi)
Averate

Std err.

p-value

VIF

5.88
0.68
20.22
20.07
20.02
20.21
20.14

0.28
0.05
0.01
0.01
0.08
0.02
0.04

0.00
0.00
0.00
0.00
0.82
0.00
0.00

1.54
2.07
1.18
2.00
1.24
1.36

Note: Adjust R-square is 50 percent, F 145:9, p , 0:01

Table II.
Complete data with
average rating

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times. Since the product specifications for each product do not change from one
sampling time to another, the influence from these specifications should be the same. If
the sales ranking changes, the difference should be from the change in online user
reviews and price. Therefore, if we study the difference between these two data sets, we
should be able to focus on the influence of online user reviews. Because actual sales
data are not available from amazon.com, we used sales ranking as a proxy for sales
data in both samples. The following equation illustrates the procedures:

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yt2 2 yt1 f x ) yt2 yt1 f x:

The dynamic analysis based on several different data sets has been widely
implemented to study the impact of online customer reviews (Chevalier and Mayzlin,
2006; Duan et al., 2008). For example, Chevalier and Mayzlin (2006) used the
information from two different websites to analyze the influence of online user reviews
on book sales; Duan et al. (2008) sampled the data from different times, and used the
differential information to investigate the impact of online user reviews on movie
revenue.
We collected the data for the second study on May 25, 2010 and June 21, 2010. Each
data set includes the digital cameras product details (LCD display size, number of
pixels, and optical zoom size), and its price, sales ranking, and online user rating
(complete data). We did not collect the most helpful and the most recent online user
review data for this study. Similar to study 1, we only collected the listed items with
cameras only and the products sold by featured sellers. We intentionally separated the
two data collection points by four weeks. First, these two data collection points cannot
be too close to each other; otherwise, there would not be much change in online user
reviews. Second, these two collection points cannot be too far apart, because digital
cameras are updated very quickly and these products do not have a long life span. If
we waited too long before we collected the second data set, it is possible that a number
of the products in the first data set would be missing in the second data set. After we
collected these two sets of data, we cleaned the data by removing any products that
only appeared in one data set, and kept only those products that appeared in both data
sets. After this process, our final data set includes 428 products; the average online
customer review of these products dropped by 0.02 ( /2 0.28), and total online review
counts increased by 0.68 ( /2 5.42).
Empirical model. Consider two sampling points of interest (t1 and t2), and use the
equation from the previous section (we used the model with the average online user
rating, and ignored the LCD display size because it was not significant in study 1):




ln ranki_t1 bzi cpi bP ln P i_t1 b0_t1 bA AveRating i_t1


bN ln Numi_t1
3




ln ranki_t2 bzi cpi bP ln P i_t2 b0_t2 bA AveRating i_t2


bN ln Numi_t2

Using the arguments from the previous section, we can state that the sales ranking in
t2 is a function of the ranking in t1, and the difference of lnP, AveRating and Num.

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ln ranki_t2 bR ln ranki_t1 Db bP ln P i_t2 2 ln P i_t1


bA AveRating i_t2 2 AveRating i_t1





bN ln Numi_t2 2 ln Numi_t1 :

The impact of
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5

In addition, we also included the price, the average online review and the number of
online reviews from t1 as inputs. This is reasonable because a price change in t2 can
impact sales. In addition, the original price level also influences the change in sales
between two sampling periods. Specifically, the same change in price will lead to a
smaller change in sales for a product with a high original price than for a lower-priced
product. Besides, assume there are two similar products: A maintains its price, but the
price for B drops from a higher price down to the same price as A. The principle of cross
elasticity tells us that this change will likely increase the sales of B relative to the sales of
A. Similar arguments can also apply to online customer reviews. For example, if there
are two products A and B with the same average online review, but As review
experiences a negative shift from the previous period to the current period while B
experiences a positive shift. Even though the existing average online user review of A is
identical to Bs, it is likely that Bs current sales are higher than that of A. Therefore, we
also included the price, the average online review and the number of online reviews from
t1 as inputs. Combining the above discussions, we come up with the following equation:









ln ranki_t2 bR ln ranki_t1 Db bP ln P i_t2 2 ln P i_t1


bA AveRatingi_t2 2 AveRatingi_t1







bN ln Numi_t2 2 ln Numi_t1 bD zi cD pi dD ln P i_t1


6
b1D AveRating i_t1 b4D ln Numi_t1 :

1123

This equation also adds back the number of pixels and the optical zoom number for
testing. According to the previous discussion, we expect their coefficients to be
insignificant. Following the same procedure, we can create a dynamic model with the
high- and low-rate review percentages.
Result. SPSS is used to fit the multi-regression model. And the results can be found
in Tables III-V. Table III is based on equation 5; Table IV is based on equation 6 and
Table V is based on the model using high- and low-rate review percentages:

Const.
Pre_sale
Diff_rating
Diff_ln( price)
Diff_ln(Numi)

Std err.

p-value

VIF

0.48
0.92
2 0.1
0.49
2 0.2

0.10
0.02
0.05
0.16
0.05

0.00
0.00
0.10
0.00
0.00

1.04
1.03
1.02
1.09

Note: Adjust R-square is 86.8 percent, F 701:1, p , 0:00

Table III.
Complete data with
average rating

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Table IV.
dynamic model based on
equation 6 (with average
rating)

Table V.
Complete data with
average rating

Const.
Pre_sale
Diff_rating
Diff_ln( price)
Diff_ln(Numi)
pre_rating
ln( pre_price)
ln( pre_Numi)
Pixels
Zoom

Std err.

p-value

VIF

0.73
0.93
20.12
0.42
20.10
20.02
20.07
0.04
20.02
0.003

0.22
0.02
0.06
0.16
0.06
0.04
0.04
0.01
0.01
0.005

0.00
0.00
0.08
0.01
0.08
0.66
0.07
0.00
0.24
0.54

1.13
1.22
1.06
1.57
1.35
1.33
1.71
1.66
1.31

Note: Adjust R-square is 87.5 percent, F 300:6, p , 0:00

Const.
Pre_sale
ln( price
Diff_ln(Numi)
Diff_percent_5
Diff_percent_1

Std err.

p-value

VIF

0.48
0.92
0.49
2 0.19
0.0
0.0

0.10
0.02
0.16
0.05
0.00
0.00

0.00
0.00
0.00
0.00
0.73
0.89

1.07
1.03
1.08
1.04
1.03

Note: Adjust R-square is 86.7 percent, F 556:6, p , 0:00

Table III tells us that the model in Equation 5 is significant (adjusted R 2 86:8
percent, F 701:1, p 0:000) and the change in user reviews (B 20:1 and
p 0:10), the price change (B 0:49 and p 0:00) and the change of total online user
reviews (B 20:2 and p 0:00) are all significant. As we predicted, the coefficient of
sales from the previous period is close to unit (B 0:92 and p 0:00).
Table IV indicates that the model in Equation 6 is also significant (adjusted R 2
87:5 percent, F 300:6, p 0:00). The change in user reviews (B 20:12 and
p 0.08), the price change (B 0:42 and p 0:01) and the change in total online user
reviews (B 20:1 and p 0:08) are all significant. The coefficient of sales from the
previous period is close to unit (B 0:93 and p 0:00). The above coefficients are
similar to what we have in Table III. In addition, other significant independent
variables include: the previous price (B 20:07, p 0:07) and previous online
customer review count (B 0:04, p 0:00). Average online review from the previous
period is insignificant (p 0:66). The product related features are not significant
(p 0:24 for number of pixels and p 0:54 for optical zoom number) and this is
consistent with our expectation.
Table V tells us that the model focusing on low and high-rate percentages is also
significant (adjusted R 2 86:7 percent, F 556:6 and p 0:000). However, only the
price change (B 0.49 and p 0:00), the change in total online user reviews
(B 20:19 and p 0:00) and sales from the previous period (B 0.92 and p 0:00)
are significant. The change of high-rate percentage (B 0:0 and p 0:73) and
low-rate percentage (B 0:0 and p 0:89) are not significant. It is worth mentioning

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that these two coefficients are zero, and this may indicate that there is not enough
change in these two variables. Since the changes of high- and low-rate percentages are
not significant, there is no need to add more independent variables from the static
model for analysis.
The results in this section show that a higher sales ranking from the previous
period, a larger increase in average online review, a larger increase in the number of
online reviews, and a larger decrease in price will all improve the sales of the product.
However, Table IV also shows that a higher price and a lower total online review count
from the previous period also improve the sales in the current period. It looks like there
is a contradiction from the results in Tables I and II, where a higher price and lower
total online review count are associated with lower sales. After further consideration,
we conclude that these two observations are actually consistent: if a product has a
higher price and fewer online reviews, it normally means that the sales of the product
in this period are not good. However, if the retailer can decrease the price or boost the
online review count in the future, it has more potential to improve the sales in the
future.
There is another interesting finding: in the previous section using the static model,
the average user review is significant in influencing the products sales. However, in
the dynamic model, the recent change in user reviews is significant while the average
user review from the previous period is not significant. This may indicate that the
original average online review rating is similar to the product related properties, and is
essentially a fixed variable.
Discussion
These two studies used the sales ranking of digital cameras to investigate the influence
of online customer reviews on search goods sales and showed some important findings.
First, the products properties and its listing price affect the sales of search goods.
According to Huang et al. (2009), consumers tend to collect more search attributes
when purchasing search goods, and the product specifications and price play a role in
affecting customers purchase decision. Huang et al. (2009) therefore pointed out that
vendors of search goods may benefit from reducing the price, and this is probably not
valid for experience goods. Our finding confirmed this from two aspects: the sales of
one specific model are related to its price; when the price drops, the sales of that
product improve.
Second, our study clarifies an uncertainty about the influence of online user reviews
on search goods: online customer reviews affect the sales of search goods. Generally,
both the average online customer review ratings and the count of total online user
reviews influence the sales of search goods. This result is not exactly the same as the
results from experience goods research. Even though it has been widely agreed that
online user reviews help sales of experience goods, past research cannot agree on
which aspect of online reviews matters. For example, some research shows that the
average rating is important (Chevalier and Mayzlin, 2006), while others find that only
the total number of reviews helps (Clemons et al., 2006). The different findings between
our study and the literature studying experience goods are probably related to the
inherently distinct natures of search goods and experience goods. According to
Mudambi and Schuff (2010), reviews of search goods are more likely to address
objective aspects of the product, and both moderate and extreme reviews are credible;

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while reviews of experience goods normally carry subjective sentiments, extremely

positive and negative reviews are less helpful. As a result, all online reviews of search
goods count, and both the number and the average rating influence purchase decisions
and sales. On the other hand, not all the online reviews of experience goods are
important; research on different websites and products may yield different results.
Third, our study also shows that negative one-star reviews have more impact than
positive five-star reviews on sales. This asymmetric impact of one-star reviews and
five-star reviews can be interpreted in several aspects. First, a negative performance on
an attribute generally has a greater effect on purchase intentions than a positive
performance (Mittal et al., 1998). Considering that a larger percentage of one-star
reviews reflect the more negative aspects of the product performance, one-star
(negative) reviews should generate a more significant impact on future sales than the
five-star (positive) reviews. Second, the sellers may post some fake positive reviews to
promote the sales of their products. As a result, one-star reviews carry more credibility
and therefore can have more influence than five-star review does (Chevalier and
Mayzlin, 2006).
With previous sales as an independent variable, the product related properties and
average online review rating are not significant any more. Instead, the change in the
average online review rating, the change in the total online review count and the
change of price are significant predictors. The second study also revealed an
interesting finding: when we focus on a specific period, lower price and more online
reviews are positively associated with product sales. However, when we focus on a
dynamic transition, lowering the price and increasing the number of online reviews
positively influence product sales, and surprisingly, a higher price and less online
reviews in a previous period also boost sales in the current period. This interesting
finding may indicate a useful marketing strategy: during an early period of a products
release, the manufacturer can limit the available product quantity and sell the product
at a higher price. When necessary, the manufacturer can reduce the price to greatly
boost the sales in the following period.
Summary and limitation
To the best of our knowledge, this research is one of the first attempts to connect the
online consumer-generated reviews and the sales of search goods (digital cameras in
this research) and it has identified several significant findings.
Our research clearly reveals that there is a significant relationship between the
online user review and sales of search goods. This finding is important for both firms
and academics. It indicates that the retailers should provide channels for and
encourage customer online reviews for search goods to improve sales. It also suggests
the influence of online user reviews on search goods sales is different from that on
experience goods. For example, we find that negative reviews are more important than
positive reviews for search goods, while this is not consistently reported on experience
goods. Similarly, the average rating of reviews is significant in predicting sales of
search goods, while some research on experience goods found otherwise. These
differences might be attributed to the subjective nature of experience goods and the
objective nature of search goods. Future research can conduct a more content-based
investigation to find out whether this objective nature originates more from the
product or the reviews written about it. In other words, if a group of subjective online

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reviews and a group of objective reviews are associated with the same experience
goods or search goods, will they have different impacts on customers purchase
decisions?
Our study also recognizes that the product specifications influence the sales of
search goods. Therefore, it is beneficial for online retailers to provide detailed product
attributes to help their customers make the purchase decision. In addition, our research
on search goods shows that price at the specific time and price changes are significant
factors affecting sales. Therefore, carefully designed and executed price promotions
could be effective ways to improve sales of searchable goods. Again, this price
sensitivity might be much less for experience goods. Future research can explore this
difference with data from both experience and search goods.
Due to limited resources, this study is based on one specific type of search good,
future research may want to focus on additional types of search goods. Because all
products can be described along a continuum from pure search goods to pure
experience goods, it would be helpful if future research can cover more products at
various points on this spectrum and test the generalizability of the results of this
research.
Our dynamic model is based on only two sampling points. If additional samples are
collected, we could investigate whether and how the time delay between these samples
influences the sales ranking prediction. More data may even enable us to track how
online customer reviews influence product sales throughout the life cycle of search
products: for example, how sales are affected and how online user reviews are
generated when there are no existing online user reviews associated with a product.

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About the authors
Lin Zhang is an Assistant Professor of Marketing at Truman State University. Her research
interests include brand management, comparative advertising and unhealthy consumption
behavior.
Baolong Ma is an Associate Professor of Marketing at Beijing Institute of Technology and a
primary researcher of The Retailing Research Center at Tsinghua University. He works
primarily in the areas of customer relationship management, brand management and crisis
management and has written numerous scholarly articles on topics in these areas. Baolong Ma is
the corresponding author and can be contacted at: mabaolong@gmail.com
Debra K. Cartwright is a Professor of Marketing at Truman State University. Her research
interests include strategic responses to external environmental pressures, competitive business
strategies, assessment of student learning, brand management and services marketing.

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