Add Thesis

Analysis of Customer Behaviours on Customer Reviews and Ratings

Written by A. Yetis, E. Kavak

Paper category

Master Thesis

Subject

Business Administration>Management

Year

2020

Abstract

Master Thesis: E-commerce and customer behavior in e-commerce Over the past decade, Internet technology has profoundly changed people's lifestyles. In terms of online shopping, e-commerce has experienced rapid development, and online shopping has become a well-known strategy for purchasing commodities. Amazon offers a variety of products and services from its platform, one of which is e-commerce through its website called Amazon.com. In 2013, Amazon's sales reached 74.4 billion U.S. dollars (Yan, et al., 2016). E-commerce is often compared to the use of the Internet to perform business. The Web has proven to be at the forefront of the rapid development of e-commerce. Because it offers low cost, it is a universal tool for facilitating commercial transactions (Boyd & Bilegan, 2003). Although e-commerce was not popular in the early 1990s, it became very popular in the late 1990s as the World Wide Web flourished (Rosenbloom, 2003). From that year to the present, e-commerce has continued to develop in many aspects, and the use of e-commerce has also expanded dramatically. The expansion of e-commerce can be described by exponential speed (Gefen, 2000). A very important feature that makes the difference between online and offline shopping behavior is the low transportation cost required to visit the virtual store. The cost of visiting an online store is low, which has multiple effects on customer behavior. First of all, from the customer's point of view, it has a lower cost, and customers surfing the Internet may visit the store without any purchase purpose. From an offline perspective, if a customer spends time and energy to go to the store, he/she is less likely to not buy the product (Moe & Fader, 2004). Therefore, almost everyone has adopted the online purchase phenomenon (Abdul-Muhmin, 2010). Distinguishing and understanding the underlying drivers of online purchasing behavior eventually becomes an interesting research field, with multiple research fields and an increasing number of publications each year (Grant, Clarke, and Kyriazis, 2007). However, a systematic review has recognized that the scope of online customer behavior research is very wide and inconsistent. This may be due to calls for improvement of the new theory, but this effort has not been unanimously accepted. Researchers should try to investigate and construct their own online customer behavior theory, rather than applying existing theories (Chan, Cheung, Kwong, Limayem, and Zhu, 2003). Ganesh, Reynolds, Luckett, and Pomirleanu (2010) pointed out that the basic principles of online shopping have not changed over time. 2.2 Customer reviews and ratings “Customer reviews have become an important part of the daily business of most e-commerce platforms on the Internet” (Trnz & Berger, 2013, p. 2). Mudambi and Schuff (2010) define customer reviews in the following way: OCR is defined as a peer review of products uploaded to a company or third-party website. In addition, retail websites give customers the opportunity to upload product reviews in the form of star ratings (usually between 1 and 5) and open reviews. Customer reviews created by consumers provide additional knowledge, including descriptions of products offered, reviews created by professionals, and personal recommendations generated by automated recommendation systems. For many years, companies like Amazon.com have provided their customers with the opportunity to upload product reviews. Other smaller companies prefer to purchase customer reviews from Amazon.com and then upload those reviews to their e-store. Therefore, this review provides a further source of revenue for Amazon.com (Mudambi & Schuff, 2010). With the increase in OCRs, deciding which reviews should be read among the various reviews posted online has become a very important strategic issue for customers who want to shop online. For example, in July 2012, more than 1,300 reviews were uploaded on Amazon.com for the Apple product category iPod Nano 16GB 6th Generation Media Player. Therefore, customers who decide to buy an iPod must consider which reviews to read among the large number of uploaded reviews, because in practice it is impossible to read every review (Lee, 2013). Dellarocas (2003) believes that the OCR framework is one of the most important channels for creating online WOM. With the help of the Internet, not only can access to professional organizations of their audiences, individuals can also share their personal opinions and reactions, and the global online customer community can obtain these opinions effortlessly (Dellarocas, 2003). Explain the development of new channels developed by customer reviews; Bounie, Bourreau, Gensollen, and Waelbroeck (2008) believe that OCR opens up new channels for collecting knowledge. Leading companies like Amazon give their customers the opportunity to read and/or write reviews about the products they buy, and get knowledge and advice on the products they plan to buy. This helps other customers gain comprehensive knowledge about the reviewer’s preferences. Therefore, customers can compare the products they like with the opinions of reviewers, and collect knowledge about the horizontal and vertical aspects of the products they will like (Bounie et al., 2008). Read Less