Do we trust product reviews? Acceptance factors behind electronic word-of-mouth (eWOM)

The modern world of consumption is characterized by the steadily growing e-commerce sector and a large variety of shops, brands and providers. According to figures from the Federal Statistical Office (2019), 84% of Germans have already ordered something online and almost a third of users make at least one online purchase per week (Statista, 2019). These numbers have grown since the pandemic, as 36% of Germans indicate that they now purchase more products online (Bitkom, 2020). In order to make the right purchase decision in this unmanageable variety of offers, consumers are increasingly orienting themselves towards recommendations from other customers who have already bought a product and who share their experiences with other users (Lis & Korchmar, 2013). While in the past buyers were mainly influenced by advertising and personal sales advice, studies have shown that today many consumers not only proactively seek digital recommendations, but also prefer them over traditional information sources (Bickart & Schindler, 2001; Heckathorne, 2010; Mourali et al., 2005). This digital communication between consumers is known as electronic word-of-mouth (eWOM) and the most relevant form are online product reviews (Lis & Korchmar, 2013).

Consumers see online product reviews as a relevant source of information and orientation, which is tailored to the specific product or service of interest. They are usually regarded as independent and objective. However, due to the high reach, many companies have recognized that product reviews are an inexpensive and at the same time effective instrument in order to increase sales (Lis, 2013). This leads to the issue that some companies have started to manipulate product reviews or even defame competitors with negative reviews. These corporate actions can deceive consumers in their perception and lead them to biased purchase decisions (He et al., 2020). In view of the questionable authenticity and objectivity of some contributions, the perceived credibility of a review plays a decisive role in its impact on consumers.

In his research, Jan Klenk from the Stuttgart University of Applied Sciences investigated the determinants and implications of online product reviews based on the classical Hovland-Yale-approach for persuasive messages (Hovland et al., 1953), which considers the sender of the message, the message itself and the recipient of the message as relevant aspects of persuasion. It is of interest to see, how these three aspects interact and determine the credibility of a product review. The central research question was, which determinants (sender, message, recipient) significantly promote the credibility of online product reviews?

In an online survey, 244 consumers were asked to evaluate fictional reviews, which were manipulated regarding the influencing variables described above. Half of the participants stated that they had already written product reviews themselves. Besides, 66% of participants indicated that they use product reviews often or always and 78% stated that they have a positive attitude towards product reviews. The study revealed that product reviews have a great importance for consumption decisions. Credibility of these reviews is largely determined by sender and message-specific characteristics. In addition to the perceived expertise of the sender and the quality of the arguments used in the review, the trustworthiness of the sender is particularly important. It has the highest degree of effectiveness of all factors and should therefore be the focus of possible measures to increase the credibility of online product reviews. In comparison, recipient characteristics were found to be of little relevance in this study.

To sum up, both, the characteristics of the sender as well as of the message, are relevant for credibility and, thus, acceptance of an online product review. Additionally, independence is the basis for sustainable added value from product reviews. Therefore, Klenk suggests that companies should take care to preserve the independence of the reviewers and to present their qualities in a modern and meaningful review system. This is the only way product reviews are accepted by consumers and can create long-term added value for companies, online retailers and consumers.

What are your thoughts on product reviews? Do you rely on them or are you rather skeptical? We are happy to hear your opinion.

 

References:

Bickart, B. & Schindler, R. (2001). Internet Forums As Influential Sources of Consumer Information. Journal of Interactive Marketing, 15(3), 31–40.

Bitkom. (2020). E-Commerce Trends 2020. Accessed on April 12, 2021, retrieved from https://www.bitkom.org/sites/default/files/2020-11/bitkompkcharts_ecommerce2020.pdf

He, S., Hollenbeck, B. & Proserpio, D. (2020). The Market for Fake Reviews. Accessed on May 30, 2020, retrieved from https://ssrn.com/abstract=3664992

Heckathorne. (2010). Speak Now or Forever Hold Your Tweets – The Harris Poll. Accessed on May 30, 2020, retrieved from https://theharrispoll.com/new-york-n-y-june-3-2010-as-of-last-week- twitters-105-million-users-had-collectively-sent-15-billion-tweets-earlier- this-year-facebook-reached-over-400-million-active-users-more-members- tha/

Hovland, C. I., Janis, I. L. & Kelley, H. H. (1953). Communication and persuasion. Yale University Press.

Lis, B. (2013). In eWOM We Trust. Wirtschaftsinformatik, 55(3), 121–134. https://doi.org/10.1007/s11576-013-0360-8

Lis, B. & Korchmar, S. (2013). Digitales Empfehlungsmarketing: Konzeption, Theorien und Determinanten zur Glaubwürdigkeit des Electronic Word-of-Mouth (EWOM). Springer.

Mourali, M., Laroche, M. & Pons, F. (2005). Antecedents of Consumer Relative Preference for Interpersonal Information Sources in Pre-Purchase Search. Journal of Consumer Behaviour, 4(5), 307–318. https://doi.org/10.1002/cb.16

Statista. (2019). E-Commerce in Deutschland. Accessed on May 30, 2020, retrieved from https://de.statista.com/statistik/studie/id/6387/dokument/e- commerce-statista-dossier/

Statistisches Bundesamt. (2019). Private Haushalte in der Informationsgesellschaft: Nutzung von Informations- und Kommunikations- technologien. Accessed on May 30, 2020, retrieved from https://www.destatis.de/DE/Themen/Gesellschaft-Umwelt/Einkommen- Konsum-Lebensbedingungen/IT-Nutzung/Publikationen/Downloads-IT- Nutzung/private-haushalte-ikt-2150400197004.pdf?__blob=publicationFile

Successful Call for Innovation: How WRS and HFT supported six companies from the Stuttgart region to improve their innovative projects

With their „Call for Innovation“, the Wirtschaftsförderung Region Stuttgart (WRS) and the Stuttgart University of Applied Sciences (HFT) have supported six regional companies in improving innovative projects with acceptance research. Participants included the department store Breuninger, Daimler, Stuttgarter Straßenbahnen AG (SSB), the software company space one, Rho Data GmbH and Pilz GmbH & Co. KG for automation technology.

The projects were wide-ranging in terms of content: From the development of internal or customer-oriented apps to tools for digital collaboration or the question of how artificial intelligence (AI) can optimize the service offering for customers. For example, Daimler AG tested its corporate health management app “My Health” and space one improved it’s “Vispa” collaboration app, which is a virtual workshop room used with the help of avatars. On the other hand, SSB tweaked their „polygo“ app, offering digital access to mobility services in the Stuttgart region and Breuninger submitted the “Instore View” app, showing offers and services of specific stores. Pilz GmbH & Co. KG investigated the worldwide acceptance of chatbots that provide customers with targeted information and Rho Data GmbH created a cloud-based solution that analyzes elements of internal communication such as emails and calendar entries to improve collaboration.

The different companies‘ ideas, products and services were analyzed and optimized by selected students of business psychology at HFT for one semester from fall 2020 to Januaray 2021. The students developed individual approaches and solutions for the individual projects and investigated whether the planned products and services would be accepted by the respective customers.

Click here for further information on the call for innovation. Feel free to contact us if you are interested in working with us or in case you have any questions!

The „Call for Innovation“ is an initiative of WRS and HFT. It took place as part of the M4_LAB project. M4_LAB stands for „Metropolregion 4.0 – Innovation and transfer from transdisciplinary research for energy-efficient urban development, sustainable management and production in the Stuttgart Metropolitan Region „. This transfer project at HFT Stuttgart is funded by the federal-state initiative „Innovative Hochschule „. The „Call for Innovation“ is planned again for fall 2021.

How can we make cycling in big cities safer? Here’s the answer

Riding a bike can be an easy, fun, sustainable and healthy way of transportation. Considering these positive aspects of cycling, cities should focus on becoming more bicycle-friendly. While there are cycle enthusiasts that have used their bike for as long as they can remember and use it to go almost everywhere, 40% of cyclists in Germany do not feel safe when riding a bike (BMVBS & ADFC, 2019).

Looking at these suboptimal conditions for a sustainable future with increased bicycle usage, we decided that we wanted to change something. There must be a solution that makes riding a bike safer and is relatively easy and quick to implement. We wanted to make a sustainable impact on the bicycle infrastructure in cities. We found a way to do so.

Let us introduce you to ROUTEMESAFE.

ROUTEMESAFE is an upcoming smartphone app which aims at making cycling safer. With this crowdsourcing app, places perceived as unsafe by individual cyclists can be marked on an interactive map and therefore made visible to all users, offering an overview of especially unsafe spots in the area. So, before heading out with your bike, you can always check the conditions of your route, and see e.g. if there are any construction sites or other obstacles. By using ROUTEMESAFE, you are better prepared for your bike route. It is also a great way to check the route for your kids. Additionally, you can also add dangerous spots while you ride past them. In order to do so, you simply have to tap the screen and describe the hazard after your journey. Thereby, you can help your fellow bikers to stay safe. By using a thumbs-up voting function we ensure with the help of our users, that only valid and up-to-date danger spots are displayed.

You might think that the smartphone app is enough because it already fulfills your own needs and those of your fellow cyclists. But we wanted to cycle the extra mile and include the local authorities. One key feature of our ideal vision of ROUTEMESAFE is the connection to urban planners in the city administration. The responsible department receives all dangerous spots that are marked by users in the app in order to get real-time feedback on the status of the road conditions for cyclists. Authorities are encouraged to use this information as a basis for decision making regarding the future bicycle infrastructure in your city. If a dangerous spot gets marked over and over again by several cyclists and receives lots of traffic, this can pose a trigger for infrastructural measures, e.g. fixing holes in the street or installing a bike lane.

By combining a crowdsourcing app with the power of local authorities we are confident to see a change in bicycle safety through ROUTEMESAFE – and hopefully an increase in cycling activities in the near future.

 

Want to come for a ride?

What do you think about bike safety in metropolitan areas in general and our app in particular? Let us know!

ROUTEMESAFE is currently available as a prototype. Want to become a Beta tester? Contact us!

We conducted several studies during the process to ensure that the users’ needs are met. Click here to read our research on cycling safety and feel free to reach out to get more information on our target group and user experience research. In case you have any feedback, feel free to contact us. We’re more than happy to hear it.

For safer cycling in metropolitan areas.

 

References:

BMVBS; ADFC, 2019, Fahrrad-Monitor Deutschland 2019, Erhebung durch polis+sinus

Veröffentlicht durch BMVBS, https://www.bmvi.de/SharedDocs/DE/Anlage/K/fahrradmonitor-2019-ergebnisse.pdf?__blob=publicationFile

 

How can (electric) Carsharing work in rural areas?

The concept of carsharing is pretty straightforward. Instead of owning a vehicle yourself and being attached to the acquisition costs, insurance, repairs and other running costs, you just pay for a vehicle whenever you need one (c.f. mobility on demand). Depending on the provider, costs are usually calculated as a mix between mileage and time. Carsharing offers you the benefits of using a car without the strings attached to owning a car. According to an analysis by Roland Berger (2014) private cars stay idle for 23 hours every day. Thus, carsharing is an environmentally friendly way to increase the efficiency of car usage.

 

The number of carsharing users is continuously rising. In Germany, over 96% of big cities with more than 100,000 habitants offer carsharing. However, only 5% of municipalities with less than 20.000 habitants provide a carsharing service (Bundesverband Carsharing, 2020). Carsharing in rural areas is facing bigger challenges than in urban areas. For instance, rural areas have a higher level of car ownership and are less densely populated. Additionally, there is a great availability of parking spaces and the public transport system is not as well-developed, making it hard to get to a carsharing vehicle. However, despite these unfavorable conditions, previous research shows that residents in rural areas are just as open towards a carsharing system as their urban counterparts (Wappelhorst et al., 2014).

 But, how exactly can we make carsharing work in rural areas?

This is a target research question in our Smart2Charge project. The goal is to implement an electric carsharing system in Wüstenrot, a municipality with 6,613 habitants in the southwest of Germany. In 2020, we conducted three preceding steps to get detailed insights into the needs as well as the acceptance of the habitants of Wüstenrot: a survey (n=190), qualitative interviews (n=21) and organized a workshop (n=17). In the survey and interviews, we presented to participants a station-based carsharing system with one station in the center of the municipality and two electric vehicles, using a short written paragraph. During the workshop, participants were able to modify the presented carsharing concept or develop a new one.

Here are our preliminary findings:

  • Overall, 15% of the survey sample indicated high interest in the e-carsharing service. Even though this value seems low at first, it is slightly above the German national average (13%) of people being interested in carsharing (IfD Allensbach, 2019).

  • The qualitative interviews revealed that the majority of respondents would like to test the electric carsharing system once it has been implemented. However, 10 out of 13 find it hard to reach and 7 out of 13 perceive it as not flexible enough.

  • In the workshop, the participants created their own preferred carsharing model for Wüstenrot. The favoured carsharing model is a free-floating model that includes carsharing stations in all districts of the municipality, making the carsharing accessible to more residents. If the vehicles are not left at a designated station, a service provider should make sure the vehicles are distributed correctly. Additionally, participants suggested to include a ridesharing feature in the app, making it possible to lower the environmental impact and foster social connections in the community.

These findings are consistent with previous research. It shows that an electric carsharing in rural areas is desirable. Compared to urban carsharing, it is important that it involves a greater sense of community. Successful carsharing systems in rural areas are found in Schleswig Holstein and Spain for example.

The implementation of the carsharing in Wüstenrot will take place in the first half of 2021. Stay tuned to see how it performs.

Click here to receive more information about the Smart2Charge project and contact us in case you have any questions or comments.

 

References:

Bundesverband CarSharing (2020). Aktuelle Zahlen und Fakten zum CarSharing in Deutschland. Bundesverband CarSharing e.V. Available online at https://carsharing.de/alles-ueber-carsharing/carsharing-zahlen/aktuelle-zahlen-fakten-zum-carsharing-deutschland

IfD Allensbach. (2019). Anzahl der Personen in Deutschland, die Carsharing nutzen oder sich dafür interessieren, in den Jahren 2015 bis 2019 (in Millionen) [Graph]. In Statista. Zugriff am 16. Juni 2020, von https://de.statista.com/statistik/daten/studie/257867/umfrage/carsharing-interesse-und-nutzung-in-deutschland/

Roland Berger (2014, September 1). Shared Mobility – Wie neue Geschäftsmodelle die Spielregeln für den Personenverkehr ändern, Available online at https://www.presseportal.de/pm/32053/2819936

Wappelhorst, S., Sauer, M., Hinkeldein, D., Bocherding, A., Glaß, T. (2014). Potential of Electric Carsharing in Urban and Rural Areas. In Transportation Research Procedia 4, 374–386. https://doi.org/10.1016/j.trpro.2014.11.028/

Home, Smart Home – What do customers expect from smart home systems?

 

The corona virus made a lot of us stay at home more than ever before. A natural reaction to this is trying to make staying at home as nice as possible. An opportunity to make life at home more convenient and efficient are so called smart home systems. Smart home describes a set of technological innovations that aim at improving the living environment of a user by adapting it to his or her individual needs (Abicht et al., 2010). Smart home systems offer various options such as dimming the lights using your phone or automatically shutting the blinds, depending on the time of the day to ensure energy efficiency.

What do user expect from such systems?

In order to answer this question, we must first look at the different types of smart home systems. Overall, there are two general smart home concepts. The first one is a single-brand solution. As the name implies, all necessary technology for smart home is holistically provided by one manufacturer. This ensures full compatibility and data security as well as good customer service. On the other hand, there are standalone open-source solutions. In this case, technology from several different brands can be connected with the control unit via a common operational framework. This offers endless possibilities for the customer to individually assemble the desired smart home solution. However, the user is responsible for checking the compatibility of all devices and has to make sure they really work together.

While 40% of Germans are currently using smart home devices, only 18% of them are true users with connected solutions. 82% of users own single or multiple devices but did not incorporate them into a coherent system. Besides, 28% are interested in smart home solutions but do not own any and 26% reject smart home solutions in general. This implies that there may be a lack of acceptance (Splendid Research, 2021). In 2019, Gabriela Salomon and Prof. Dr. Patrick Müller from the Stuttgart University of Applied Sciences investigated the acceptance factors of smart home technology based on the widely used framework (UTAUT model, Venkatesh et al., 2003). In their online survey, users (n=496) were either asked about their insights regarding the single brand solution or the standalone open-source solution. Therefore, it is not only possible to find out what best predicts acceptance of a smart home system but also compare the two system types.

The following four success factors for smart home technology acceptance were identified:

  • Performance Expectancy is the most important success factor for smart home technology acceptance: The more people expect to save time, money and to increase security, the more they tend to use smart home technology.

  • The second relevant factor is Effort Expectancy: If smart home systems are expected to be effortless, inexpensive and easy to get, people are more likely to use it.

  • Additionally, people’s interest in the technology also depends on what they think their social environment likes the technology or not (Social Influence) and how well suited their living situation (e.g. rented flat, new house) is for the technology (Facilitating Conditions).

  • Overall, no differences in these success factors between the two smart home systems were found. However, users expected a higher performance of the single brand solution but at the same time had the feeling that standalone open-source solutions are more suited to their living situation.

What can companies learn from these results?

This research implies that the cost and time saving benefits should be communicated clearly to consumers. Additionally, there needs to be a focus on simplicity of the installation of smart home in order to decrease the expectation that such systems are difficult to install and maintain. To achieve a positive social influence, manufacturers can promote successful group interactions and communication through and with the system. Last but not least, users need information about compatibility with other technologies and the suitability for different living environments.

By focusing on the clear communication of benefits and necessary requirements, a positive image for smart home solutions can be created.

Is there a winner?

The study by Salomon and Müller (2019) showed that users do not necessarily think that one system is better than the other. They expect more performance of the single-brand solution but at the same time expect that standalone open-source solutions to be more suited to their living situation. So, it looks like we will see very different approaches to smart home solutions for the time coming. It is going to be interesting to see which features companies develop in order to tie customers to their systems and how these systems evolve.

What are your thoughts on smart home? Do you already have something in place? Or are you thinking about getting it installed? What information and solutions should companies provide? We’d be happy to hear your opinion.

You can access the full article here.

 

References:

Abicht, L., Brand, L., Freigang, S., Freikamp, H., & Hoffknecht, A. (2010). Internet der Dinge im Bereich Smart House. Retrieved from http://www.frequenz.net/uploads/tx_freqpro- jerg/Abschlussbericht_Id__im_Smart_House_final.pdf.

Salomon, G., & Müller, P. (2019). Success Factors for the Acceptance of Smart Home Technology Concepts. In A. Lochmahr, P. Müller, P. Planing, & T. Popovic (Eds.), Digitalen Wandel gestalten – Transdisziplinäre Ansätze aus Wissenschaft und Wirtschaft (pp. 205-215). Springer Gabler.

Splendid Research (2021). Smart Home Monitor 2021. Retrieved from https://www.splendid-research.com/de/smarthome.html

Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: Toward a unified view. MIS quarterly, 27, 425–478.