The Influence of Online Product Recommendations on Consumers' Online Choices

Topics: Electronic commerce, Online shopping, Retailing Pages: 26 (9018 words) Published: December 4, 2012
Journal of Retailing 80 (2004) 159–169

The influence of online product recommendations on consumers’ online choices Sylvain Senecal a,∗ , Jacques Nantel a,1
a

HEC Montreal, University of Montreal, 3000 Chemin de la Cote-Sainte-Catherine, Montreal, Que., Canada H3T 2A7

Abstract This study investigates consumers’ usage of online recommendation sources and their influence on online product choices. A 3 (websites) × 4 (recommendation sources) × 2 (products) online experiment was conducted with 487 subjects. Results indicate that subjects who consulted product recommendations selected recommended products twice as often as subjects who did not consult recommendations. The online recommendation source labeled “recommender system,” typical of the personalization possibilities offered by online retailing, was more influential than more traditional recommendation sources such as “human experts” and “other consumers”. The type of product also had a significant influence on the propensity to follow product recommendations. Theoretical and managerial implications of these findings are provided. © 2004 by New York University. Published by Elsevier. All rights reserved. Keywords: Online product; Recommendation; Consumers

Introduction Among all possible advantages offered by electronic commerce to retailers, the capacity to offer consumers a flexible and personalized relationship is probably one of the most important (Wind & Rangaswamy, 2001). Online personalization offers retailers two major benefits. It allows them to provide accurate and timely information to customers which, in turn, often generates additional sales (Postma & Brokke, 2002). Personalization has also been shown to increase the level of loyalty consumers hold toward a retailer (Cyber Dialogue, 2001; Srinivasan, Anderson, & Ponnavolu, 2002). While there are several ways to personalize an online relationship, the capacity for an online retailer to make recommendations is certainly among the most promising (The e-tailing Group, 2003). Online, recommendation sources range from traditional sources such as other consumers (e.g., testimonies of customers on retail websites such as Amazon.com) to personalized recommendations provided by recommender systems (West et al., 1999). To date, no study has specifically investigated and compared the relative influence of these online recommendation sources on Corresponding author. Tel.: +1 419 530 2422. E-mail addresses: sylvain.senecal@hec.ca (S. Senecal), jacques.nantel@hec.ca (J. Nantel). 1 Tel.: +1 514 340 6421. ∗

consumers’ product choices. Therefore, the main objective of this study is to investigate the influence of online product recommendations on consumers’ online product choices. In addition, we explore the moderating influence of variables related to recommendation sources and the purchase decision.

Literature review Research on the use and influence of recommendations on consumers has typically been subsumed under personal influence or word-of-mouth (WOM) research. In addition, as noted by Rosen and Olshavsky (1987), research on opinion leadership and reference groups also relates to the study of recommendations and to influence in general. Recommendation sources are considered primarily as information sources. Andreasen (1968) proposes the following typology of information sources: (1) Impersonal Advocate (e.g., mass media), (2) Impersonal Independent (e.g., Consumer Reports), (3) Personal Advocate (e.g., sales clerks), and (4) Personal Independent (e.g., friends). Although research on personal influence and WOM focuses on the latter two information sources, it is noteworthy that impersonal independent information sources such as Consumer Reports can also serve as recommendation sources. Moreover, the Internet can provide consumers with

0022-4359/$ – see front matter © 2004 by New York University. Published by Elsevier. All rights reserved. doi:10.1016/j.jretai.2004.04.001

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