Prof. Shuba Srinivasan, Ph.D. (Boston University):
"The impact of online product reviews on product returns and net sales"
(with Nachiketa Sahoo and Chris Dellarocas)
Thursday, Feburary 06, 11:00am – 12:30pm (WiSo Modulbau, Seminar Room3)
Although many researchers in Information Systems and Marketing have studied the effect of product reviews on sales, few have looked at their effect on return of such purchases, i.e. on the net sales. We motivate the idea that product reviews could affect the quality of purchase decisions, hence the probability of the eventual return of the purchased products. To explore this we obtain a transaction level dataset from a multi-channel multi-brand specialty retailer operating in North America. We study the impact of product, customer, marketing, and customer-generated review variables on the probability of a purchase being returned. We find that the availability of online product reviews is associated with a lower probability of return after controlling for customer, product and channel related factors. The findings form the basis of our current work on modeling the purchase and return activities in terms of uncertainty around customer's anticipated utility and the latent cost of return.