Using the Social Influence of Electronic Word-of-Mouth for Predicting Product Sales: The Moderating Effect of Review or Reviewer Helpfulness and Product Type

Abstract

The social engagement of eWOM (electronic word-of-mouth) can reduce the threat of adverse selection in e-commerce. As studies that examine the social influence of eWOM are rare, the present work suggests the moderating effect of review or reviewer helpfulness and product type (experience or search goods) on the relationship between eWOM and product sales. The volume of eWOM, which is defined as the multiplication of the average length by the number of reviews, is shown to be moderated by review and reviewer helpfulness and search goods to affect product sales. Review ratings are moderated by reviewer helpfulness, and review extremity is positively (negatively) moderated by search (experience) goods and review helpfulness to affect product sales. As previous studies of differentiated sampling strategies that consider review helpfulness for predicting product sales using eWOM are lacking, this study compares the prediction power of business intelligence methods for different subsamples of products created according to high or low review and reviewer helpfulness levels. The subsample with high review or reviewer helpfulness demonstrates greater prediction performance than the subsample with low review or reviewer helpfulness when eWOM variables are used as predictors of product sales. Hence, preliminary filtering data preprocessing should consider review or reviewer helpfulness as a crucial criterion of the data quality. This will contribute to the sampling or preprocessing strategy used to predict product sales using eWOM.