Abstract
The rapid digital transformation, especially on the internet, has provided businesses with unprecedented opportunities for global expansion. This shift has revolutionized marketing, replacing costly and labour-intensive efforts with cost-effective digital strategies. E-commerce platforms facilitate this process by offering an interactive interface for users to post reviews, comments, and questions, thus enhancing the decision-making experience. Understanding customer purchase intention is vital in this digital age, as it's shaped by various antecedent factors, with digital word-of-mouth (eWOM) being a significant influencer. However, the relationship between eWOM and purchase intention remains underexplored. This chapter reviews 60 previous studies, shedding light on the factors affecting online customers' purchase intentions. The study identifies research gaps, setting a clear direction for future investigations.
TopIntroduction
The last one and half decade has witnessed a remarkable growth in digital infrastructure and its easy accessibility to the masses. Customers’ lifestyles and their purchasing pattern have been drastically influenced by this growth. Prior to the online ecommerce era, customers’ purchase decisions were majorly influenced by the news, advertisements, or through personal experiences shared by friends and relatives. During the initial period of internet evolution, it just acted as the source of some information with limited business value to customers as well as business. The affordability and accessibility of the internet ensured technological growth in digital infrastructure and arrival of ecommerce platforms. Ecommerce platform provided a common ground for both customers and business to buy or sell products and services. Seller can post their products on the platform and buyer can navigate over the product and make a purchase decision just sitting at the comfort of their home at any time or place of their choice. These platforms fulfil the order with the help of their digital supply chain mechanism and fast delivery system and thereby abstracting the pain of underlying issues in demand and supply from business and customer. To increase the confidence level of customers towards online shopping, ecommerce platforms also provide innovative solutions in the form of online review systems. Customers find other customers’ words as more trustworthy than the information advertised by the seller on the platform. The customer purchase behavior is impacted by fellow users’ experiences. Online shopping and purchase intention are closely intertwined, and various factors influence a customers’ purchase decisions. By understanding these factors and tailoring their strategies accordingly, businesses can enhance the customers’ online shopping experience and increase their purchase intent.
When someone shares some information to other person or group of persons and the other person or group of persons pass on the information to more group of people, then it is simply referred to as word-of-mouth communication. In marketing and online ecommerce platform, word of mouth makes it easier for people to converse about the product brand and services. It actively seeks to build mutually beneficial consumer-to-marketer and consumer-to-consumer relationships. As per Mark Zuckerberg, “Nothing influences people more than a recommendation from a trusted friend”. 80% of consumers are more inclined to buy a good or service that has word of mouth recommendations from family members or friends. Today, people trust more on people recommendations and less on brand advertisement campaigns. The success or failure of a product or service lies not with marketers or advertisers but with what people recommends. The conversation drives the growth story. 51 percent of marketers presume Word of Mouth marketing outmatches any brand-created content (Team Lapaas, 2020).
For the physical and digital channels, word of mouth is an important factor and plays vital role for the success of these channels. The advancement of technology ensured WOM remains the most influential element for customers and their conveyance of information about product or service (Smart Insights, 2016).
Word of mouth is considered more trusted, credible and persuasive than commercial information shared by marketers. The availability and ease of usage of technology has enabled customers to share updates and experiences on encountered brand, product or service with much ease which makes the information viral (Morrison, Cheong, & McMillan, 2013). Customers make purchases with confidence when they have faith in eWOM communications. As a result, the majority of online retailers now show favourable customer ratings next to their product listings. Ku, Wei, & Hsiao (2012) showed that eWOM encourages users to spend longer time on these websites, increasing the chance that they would make a purchase. Furthermore, Chen, Teng, Yu, and Yu (2016), discovered that consumers gauge a product's usefulness by looking at relevant internet content. With reference to hotels, Xie, Zhang, Zhang, Singh, and Lee (2016), found in their study that hotels receive an increase in customer ratings and reservations when managers replied to the online customer feedback. This is one example of how eWOM may occasionally directly affect the sale of products or services.
Key Terms in this Chapter
Purchase Intention: Purchase intention represents an individual's inclination or readiness to buy a particular product or service in the future. It is a key factor in consumer behavior and decision-making processes.
Antecedent Factors: Antecedent factors are the precursor elements or variables that precede or influence a particular outcome or behavior. In the context of purchase intention, antecedent factors could include various aspects such as product quality, price, brand reputation, and social influences.
Customer Behavior: Customer behavior encompasses the actions, decisions, preferences, and reactions of individuals as they engage in the process of purchasing products or services. It includes various factors that influence consumer choices and actions.
Electronic Word of Mouth (eWOM): Electronic word of mouth refers to the spread of information, opinions, or recommendations about products or services through online platforms, such as social media, forums, blogs, or review websites. It encompasses the digital sharing of experiences and perceptions by consumers.
Information Acceptance Model (IACM): Is a theoretical framework used to explain how individuals accept or process information. This model typically includes various factors influencing the acceptance of information, such as perceived usefulness, perceived ease of use, trust, credibility, and the relevance of information.
E-Commerce: Electronic commerce, commonly known as e-commerce, refers to the buying and selling of goods or services over the internet. It involves online transactions between businesses and consumers (B2C), between businesses (B2B), or between consumers (C2C).
Online Reviews: Online reviews are evaluations or feedback provided by customers about products, services, or experiences they have encountered. These reviews are typically posted on e-commerce platforms, social media, or dedicated review websites and play a significant role in influencing purchase decisions.