Social Media as e-Word of Mouth & its Impact on Online Consumer Behaviour

Human Interaction has been increasing over the past decade, a phenomenon that has been synchronous with the advent of Social Media. Social Media (SM) is a term constructed out of two words. “Media” means to advertise and communicate information and ideas through channels or publications, while the word “Social” means interaction among a group of people or a community.

The rapid growth of online SM platforms has shifted the crux of real-world social interactions to the virtual world. This shift in preference of interaction modes has led to the creation of a vast online community that brings people together from all across the globe. With the ever increasing penetration of SM, a different form of word-of-mouth has sprouted into significance, i.e. electronic Word of Mouth (e-WOM).

E-WOM has emerged as one of the major forms of marketing communication among consumers. The online community of millions of people ensures that there is a constant flow of opinions, information and feedback on products, services, and/or organizations. E-WOM is defined by Hennig-Thurau et al (2004) as “any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet”.

E-WOM is of particular significance in the purview of e-commerce and online shopping sites. In most cases, a potential online shopper will have their own set of beliefs and preconceived notions of a product or service he intends to purchase. However, owing to the perceived risk involved in online shopping, they tend to observe and survey experiences of others, preferably within their immediate SM network.  A study conducted by Archak, Ghose and Ipeirotis showed that though the reviews generated through e-WOM by SM users are subjective and unverifiable, consumers often consider them as more believable and trustworthy than official descriptions or propositions.

 A study by Park, Lee and Han discussed the role that reviews played in online shopping decisions. According to them, a product or service will usually have either a positive or a negative review. Each of these can be further segregated into an Attribute-based (Informative) or Simple Recommendation review. Another factor for a consumer to consider is the number of reviews for a product / service.  For a low-involvement consumer, a higher number of reviews give them an inkling of the perceived popularity of the product, positive or negative. Irrespective of the quality or quantity of the information, the overall sentiment of the reviews is usually echoed by the consumer, i.e. recommendation is of a bigger significance than information.

For a high-involvement consumer, informativeness of a review holds greater significance than its overall perceived popularity. Fewer attribute-based reviews that detail the elements of the product / service have a higher chance of influencing the purchase, relative to a high number of simple recommendation reviews. This may hold true for both positive, as well as negative reviews.

Given the connectivity of Internet, increasing penetration of online shopping websites, and the ever evolving SM ecology, consumers have the platform to easily discuss and exchange online shopping experiences and information with each other. This holds the power to influence not just the brand, but also the website of choice for a potential consumer to make his/her purchase. Such peer communication through SM is a developing form of Consumer Socialization, and has profound impacts on consumer behaviour.

Further research is warranted to understand the impact of information overload caused by the plethora of reviews. Another key issue for research in the future could be how consumers view reviews, with respect to its credibility. Organizations are known to remove or hide negative reviews, hence increasing the possibility of a consumer potentially doubting the excess of positive reviews. E-Word of Mouth on Social Media and reviews on e-commerce websites have truly recreated and evolved the shopping experience of consumers.   

  Jegannath Ramanathan