We are very grateful to a Spanish grocery chain for providing us with the data for this study and to the Kilts Center at the Booth School of Business, University of Chicago for financial assistance. We thank Journal of Interactive Marketing editor Dr. Venkatesh Shankar and three anonymous reviewers for their valuable comments and suggestions. The usual disclaimer applies.
When studying the impact of online reviews on product sales, previous scholars have usually assumed that every review for a product has the same probability of being viewed by consumers. However, decision-making and information processing theories underline that the accessibility of information plays a role in consumer decision-making. We incorporate the notion of review visibility to study the relationship between online reviews and product sales, which is proxied by sales rank information, studying three different cases: (1) when every online review is assumed to have the same probability of being viewed; (2) when we assume that consumers sort online reviews by the most helpful mechanism; and (3) when we assume that consumers sort online reviews by the most recent mechanism. Review non-textual and textual variables are analyzed. The empirical analysis is conducted using a panel of 119 cosmetic products over a period of nine weeks. Using the system generalized method of moments (system GMM) method for dynamic models of panel data, our findings reveal that review variables influence product sales, but the magnitude, and even the direction of the effect, vary amongst visibility cases. Overall, the characteristics of the most helpful reviews have a higher impact on sales.
PurposeThe aim is to present a novel, empirical analysis of the competitive battle between retailer‐owned private labels (also known as store brands) and national brands (manufacturer‐owned) in the online retail market.Design/methodology/approachThe authors investigate competition between private labels (PL) and national brands (NB) across online and offline retail channels using data supplied by a multichannel supermarket chain describing a full year's purchase records for 2,742 households in 36 product categories. They analyse competition between these two types of brands by estimating the following competition indicators: market share, loyalty and conquesting power (a measure of the ability of a brand to attract new customers).FindingsThe results indicate that, whereas both PL and NB increase their loyalty online (versus offline), only the PL increases market share and conquesting power online. Several specific category‐level effects are also found.Research limitations/implicationsThe analysis is restricted to a specific retailer and to grocery products.Practical implicationsGiven the general improvement found for the PL in the online retail channel, together with the growing importance of online retailing, manufacturers should expect increasing retailer bargaining power. Since this improvement is not equal across categories, however, some manufacturers will have harder times than others.Originality/valueTo the best of the authors' knowledge, this is the first empirical paper to examine competition between PL and NB in the online channel. The database used is also highly unique in the sense that it is very unusual to obtain real purchase data for the same set of purchasers in both the offline and online retail channels.
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