Many retailers have to deal with the problem of fake product reviews. Some,… (Amazon.com )
Consumers often turn to the Internet to research a product before buying. Fake reviews are always a concern, and the problem may be bigger than previously thought.
There have long been reports and rumors of businesses posting negative reviews of their competitors' products or companies that pay or reward users to write glowing reviews (known as cyber-shilling).
But new research shows that loyal customers are writing extremely negative reviews about products they never purchased.
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Duncan Simester, a marketing professor at MIT, and Eric Anderson of Northwestern University did a study based on reviews posted on the website of a major private-label apparel company that generates hundreds of thousands of reviews.
The duo found that about 5% of the product reviews were written by customers with no record of actually purchasing the item. Those reviews were "significantly more negative" than the remaining reviews.
Those bogus reviews have consequences, Simester said. Low ratings result in significantly less demand for the item, which persists for at least 12 months.
"We have some evidence that these negative reviews do drive purchasing decisions and can reduce sales," he said.
Simester and Anderson said they were also able to replicate the effect using book reviews on Amazon.com.
It's unclear why customers would post negative reviews about products they didn't buy. Consumers might be acting as self-appointed brand managers that see the reviews as a way to give feedback to a company about products, regardless of whether they purchased them. Or they might be seeking to raise their online social status by posting with great frequency or detail, assuming that doing so increases their level of expertise, the study said.
All told, very few customers write reviews. For the private-label apparel brand, fewer than 2% of the company's customers wrote reviews. People who write reviews generally purchase more items, are more likely to buy at a discount, are more likely to return items and are more likely to purchase new or niche items.
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