Examining the Awareness and Persuasive Effects of Online WOM

This study addresses a growing trend in how consumers obtain and use information prior to making their online purchasing decisions. Specifically, the authors investigate the relationship between online word-of-mouth WOM, i.e., customer reviews and ratings and sales as measured by Amazon "ranks" for different product categories. Using data collected from Amazon, the authors find that online WOM metrics and social media impact consumer purchase decisions through awareness and persuasion. From a managerial standpoint, these findings suggest that businesses should use ratings, reviews, and social media to build awareness about their products and influence purchase decisions. Future research in online WOM and sales outcomes for product categories should control for advertising and product heterogeneity within categories, as well as incorporate social media metrics, review text, and review length.