Harnessing the Influence of Social Proof in Online Shopping: The Effect of Electronic Word of Mouth on Sales of Digital Microproducts

Abstract

Social commerce has taken the e-tailing world by storm. Business-to-consumer sites and, more important, intermediaries that facilitate shopping experience, continue to offer more and more innovative technologies to support social interaction among like-minded community members or friends who share the same shopping interests. Among these technologies, reviews, ratings, and recommendation systems have become some of the most popular social shopping platforms due to their ease of use and simplicity in sharing buying experience and aggregating evaluations. This paper studies the effect of electronic word of mouth (eWOM) communication among a closed community of book readers. We studied the entire market of Amazon Shorts e-books, which are digital microproducts sold at a low and uniform price. With the minimal role of price in the buying decision, social discussion via eWOM becomes a collective signal of reputation, and ultimately a significant demand driver. Our empirical study suggests that eWOM can be used to convey the reputation of the product (e.g., the book), the reputation of the brand (i.e., the author), and the reputation of complementary goods (e.g., books in the same category). Until newer social shopping technologies gain acceptance, eWOM technologies should be considered by both e-tailers and shoppers as the first and perhaps primary source of social buying experience.