Study of product ratings and reviews on e-commerce websites

Abstract

The aim of the study was to understand the utility of reviews and ratings in the purchase process for a customer shopping online through e-commerce website. For the purpose of study, we segmented customers based on their behavior and developed hypothesis to understand the relative importance of reviews and ratings for these segments. To test these hypotheses, we designed a research experiment with several factors like product category, nature of customer, effectiveness of reviews & ratings and behavior towards the e-commerce website. These were then translated to a survey to capture the response of customers during the buying process. The survey result was then analyzed with the help of statistical tools and the results were derived from this experiment. Several major findings were established as a part of this research. 1) Loyalty of customer for an e-commerce website will have an impact on the overall effectiveness of ratings & reviews. 2) For a search product, reviews are more important than ratings. 3) For a prevention focused customer, reviews are more important than ratings. 4) For a promotion focused customer, reviews are more important than ratings. 5) Hence, irrespective of the nature of the customer reviews will be more influential than ratings for the purchase of a search product on e-commerce website. E-commerce websites should start highlight reviews more on their platforms than ratings to enhance the purchase process. They should even try to build the loyalty towards platform to increase the overall effectiveness of reviews and ratings.