With the progress that information technology has made so
far, consumers have more opportunities to share their experience and learn
about other’s experiences. In the past, consumers mostly bought what looked
good and convincing in the advertisement or sales speech. Before information
was so easily available, consumers believed that expensive items have better
quality and hence the quote “ what you pay is what you get” became a norm.
Reviews are beneficial to both customers and sellers. While
reviews give customers better idea about whether the product will fit their
expectations, they give sellers valuable information such as whether they are
using the right strategy, at a faster rate and cheaper price. One cannot even
get such valuable information after spending hundreds of thousand of dollars on
surveys. So overall online reviews provide learning to both customers and
sellers.
Before online reviews, companies needed to establish their
brands in order to be able to get customers. Online reviews have made brands
less important compared to performance and experience. Small businesses have
benefited the most from online customer reviews because they know that the negative
reviews are not going to hurt their brand as much as they do a well known
brands. Reviews also don’t help or hurt products that are preferred and for
which customers know what to expect. For example, products like milk, subway,
toothpaste etc do not need to have reviews because customer have their preferred
brand/flavor and they know what to expect from it. More expensive the product
is, more do customers rely on reviews to aid in their research. For example,
people would try to get opinions and reviews for product like cars, houses, TVs
and electronics.
