Title Page

Measuring the Impact of Online Reviews on Consumer Purchase

Decisions – A Scale Development Study

Semila Fernandes
Symbiosis Institute of Business Management, Bengaluru,
Symbiosis International (Deemed University), Pune, India
semila123@gmail.com

Rajesh Panda
Xavier Institute of Management, XIM University, Bhubaneswar, India
rajeshpanda.80@gmail.com

V.G.Venkatesh
EM Normandie Business School, METIS Lab, France
vgv1976@gmail.com

Biranchi Narain Swar

Management Development Institute, Murshidabad, India
drbiranchi.marketing@gmail.com

Yangyan Shi,
Department of Management, Macquarie School of Management, Macquarie
University, Australia
ys102@gmail.com

Electronic copy available at: https://ssrn.com/abstract=4045914

 Measuring the Impact of Online Reviews on Consumer Purchase

Decisions – A Scale Development Study

Abstract

Consumers’ exposure to online reviews influences their online retail shopping

behavior. They search for reviews while evaluating products for purchase decisions.

Past studies have indicated that online reviews affect the credibility and trust of the

sellers and the products they sell on online platforms. Keeping this in view, the current

paper aims at developing and validating a scale to understand the impact of online

reviews on consumer purchase decisions. Data were collected from 431 young online

shoppers from the developing country for this research. The initial exploratory factor

analysis (EFA) results helped identify four factors, viz. source credibility, volume,

language and comprehension, and relevance constitute the scale. The scale was

validated by confirmatory factor analysis (CFA). The study's findings fill the gap of

having a standardized scale that online retailers can use as indicators to assist

consumers in their online decision-making. The discussions and implications support

consumers' susceptibility to online reviews, an essential source for product and brand

information in facilitating online consumers’ purchase decisions.

Keywords: consumer psychology, retailing, scale development, purchase decision.

online reviews, word-of-mouth.

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1.Introduction

In October 2020, research by Wall Street Journal revealed surprising factual statistics

every business would want to know and the importance of online reviews (The Wall

Street Journal, 2020). Firms need to capitalize on their understanding of online reviews

as online shoppers consider online reviews as channels of getting product information

while making purchase decisions (Fu, Manogaran, Wu, Cao, Jiang, & Yang, 2020).

Newspaper articles viz. business news daily in November 2021 also guided firms

towards the dynamics of responding to an online review (Business News Daily, 2021).

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Unlike offline purchases, customers cannot touch or feel the product online and

depend on consumer reviews (Schneider & Zielke, 2020). A Google study based on 57

million online customer reviews indicated that these reviews influenced consumers'

purchase choices (Morrison, 2015). A ‘sales assistant’ assists a consumer by searching

for product-attribute information; similarly, online customer reviews help consumers

identify information about a product that best matches their needs (Schneider &

Zielke, 2020). Most consumers like to go through other consumers’ opinions about

retailers’ products or services before finalizing their purchase decisions.

The study is motivated by a specific behavior of consumers in the online environment

- consumers spend more on products with excellent online reviews indicating the

economic value of online reviews (Thakur, 2018). Extant literature underpins the

importance of online reviews and identifies a few variables that consumers rely on

while making online purchases (Li, Chen & Zhang, 2020). Additionally, the context of

this study is India which is an emerging market. India is the second-largest online

market globally, with 622 million internet users, and it is projected that this number

will increase to 900 million by 2025 (IAMAI-Kantar, 2021). This shows that India will

be a lucrative market for online retailers to sell their products and services with the

growing online population.

Besides, 70 percent of customers refer to online reviews before finalizing their

purchase decisions, and 63 per cent of customers are more likely to buy the product if

it has higher product ratings and positive reviews (Rauschnabel et al., 2019;

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MacDonald, 2018). Young shoppers are the predominant group who buy online

(Lissitsa & Kol, 2016; Singh, Chaudhuri, & Verma, 2019). A recent study posited that a

younger group of consumers looked for online reviews and agreed that online shopping

was more convenient. Customers considered ‘reviews’ and ‘ratings’ as two essential

sources of information (Shin & Darpy, 2020). Such reviews and opinions on the web

and e-commerce portals have been referred to as e-WOM (electronic Word of Mouth).

Extant literature has attempted to identify individual constructs and variables that

enhance e-WOM (Augusto et al., 2018). Researchers have separately analyzed the

variables that explain the usefulness of online reviews, viz. quality, quantity, star

ratings, credibility, reviewer identity, etc., have been separately analyzed by

researchers (Filieri et al., 2020; Nieto-Garcia et al., 2019). However, at a macro level,

the key challenge for retailers is to examine the relevant factors in purchase decisions.

Marketing research has not comprehensively assessed online customer reviews

empirically through a standardized measure (Kim & Song, 2018). So, to plug this gap,

the current study tries to respond to the following research question: Which are the

reliable and valid indicators to diagnose the assessment and influence of online

customer reviews? This research answers the question in three steps: analyzing extant

literature and identifying the research gaps. Employing focus group discussions

(FGDs) to generate and validate items identified through literature. Through

Exploratory Factor Analysis (EFA) followed by Confirmatory Factor Analysis (CFA), the

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authors systematically purify and validate factor structure using SPSS and AMOS to

develop the measurement model. To the best of our knowledge, there is no such

measurement scale that measures online reviews.

The work contributes to the retailing domain in multiple ways. Firstly, it develops a

comprehensive scale to propose a measurement scale to measure online reviews.

Secondly, this pioneering work in consumer retailing proposes new items such as

‘trusting the reviews from a verified customer’ and ‘the style of writing reviews’ that

impact customers' product purchase journeys. This will improve the measurement of

online reviews in marketing. By doing so, this robust, validated scale helps analyze too

broad items and fine-tune the indicators o recognize customer-specific outcomes. This

scale will enable new theoretical underpinnings and help researchers compare the

scale across cultures and markets.

The paper has six sections. Section 1 includes the introduction; the second 2 includes

the theoretical and literature background. Section 3 elucidates the methodology and

the scale development procedure. Our empirical scale development and validation

process comprises three studies that confirm the reliability and validity of the

instrument. Finally, we present how marketers can apply for online reviews in our

relevant discussions in section 4. Section 5 contributes to the study, including

theoretical and managerial implications. Section 6 concludes with limitations and

future research agenda.

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2. Theoretical and Literature Background

Electronic-word of mouth and online reviews

Word-of-Mouth (WOM) is a dominant force in influencing consumers’ decisions. These

days, Electronic-WOM (e-WOM) is gaining prominence and is recognized as the new

communication medium (Choi & Maasberg, 2021). e-WOM refers to informal means of

communication directed towards consumers adopting internet-based technology,

which comprehends various websites and media forms, including online customer

reviews (Gottschalk & Mafael, 2017). These consumer-generated online reviews for

products and services are increasing in importance and popularity (Lee & Choeh,

2018). Research has indicated that e-WOM is frequently generated through social

media and online shopping platforms. Research scholars have confirmed that these

platforms of e-WOM influence purchase decisions (Duarte, Silva & Ferreira, 2018). e-

WOM in online shopping platforms is generated through online reviews by existing

buyers. These online customer reviews are recognized as one of the pivotal forms of

e-WOM. It has also been seen that when consumers are making product decisions,

they rely more on online reviews (Choi & Maasberg, 2021). Moreover, consumers look

for the total number of online reviews as qualifying items, reflecting upon the

popularity and awareness of that product or service (Chen, Hong & Li, 2017).

Consumer-generated online reviews gauge the persuasion of e-WOM with a specific

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focus on the perceived effectiveness and trustworthiness of reviews (Srivastava &

Kalro, 2019).

Attributes of Online Reviews and consumer purchase decisions

Online content in the form of online reviews is becoming increasingly popular in the

context of Internet-Based Marketing (Choi & Maasberg, 2021). Reviews usually reflect

upon arguments that the consumers categorize into pros and cons or positive

arguments and opposing arguments (Risselada, de Vries & Verstappen, 2018).

Negative reviews disconfirmation has more significant and stronger effects than

positive reviews disconfirmation (Li, Meng & Pan, 2020). In addition to the number of

online reviews, the type of reviews also matters for consumers, potentially yielding

better purchase intention results. Studies showed that online reviews generated

through internet forums are perceived to be much more credible and trustworthy than

the corporate websites generated by the marketer. Consumers go through online

reviews across multiple sites and internet forums (Thakur, 2019). The

number/quantity of reviews and the types/quality of reviews positively influence the

credibility and trust of the seller/product (Ismagilova et al., 2020). As the number of

reviews increases in the online environment, obtaining specific information becomes

difficult, and hence consumers look out for heuristic cues like the star ratings to

simplify their search and evaluation process (Yi & Oh, 2022; El-Said, 2020).

Recent/current reviews reflect upon the evidence about the products and services,

thereby showcasing higher credibility (Shareef et al., 2019). The study conducted by

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Shaheen, Zeba, Chatterjee & Krishankutty (2019) found that the usefulness of online

customer reviews and credibility induces the adoption of reviews and propensity to

trust online retailers. Similarly, consumers believe negative reviews to be much more

authentic than positive reviews, even in online buying behavior. Negative reviews have

a more substantial influence on consumers’ assessment of services or products and

purchase intention against a positive message (Weisstein et al., 2017). Research has

also indicated that the attributes of online reviews such as the richness of the review,

review ratings, their relevance (Nieto-Garcia et al., 2019), and the reviewers’ identity

disclosures and their level of expertise (Munzel, 2016; Chen et al. 2017) depict positive

influence towards an online purchase decision. Researchers have also discovered that

consumers value the online generated reviews only when the reviewer has an

experience of using the product or service (Stein et al., 2016). Empirical studies have

also posited how online reviews are written, which subtly affects consumers' purchase

decisions (Dixit et al., 2019). The semantic content, language, and style of writing

consumer reviews influence online consumer sales. Linguistic style and Content are

inseparable and reinforce the impact of online reviews, thereby making the review

clearer and more unambiguous and appealing to the reader (Stein et al., 2016).

Consumers can evaluate better when reviewers indicate their personal identity/real

name with a photo (Kim, 2020; Mariani & Predvoditeleva, 2019). It has thus been

important for reviewers to fully identify their individuality while posting online content

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to qualify the source as credible, although it is not mandatory to do so (Ismagilova et

al., 2020). Profile photos of the reviewers also help improve the credibility of their

reviews (Kim, Kim & Key, 2020). Thus, consumers' purchase decisions are influenced

when there is an interaction between the facial expression of the reviewer and the

content of online reviews, which provides strength of intention to purchase the product

(Heng et al., 2018).

Table 1: Summary of recent notable works

Sl. Authors/Year Concept Key Findings

No

1 Choi & Effects of product Online reviews had a persuasive impact on

Maasberg, reviews consumers' processing of information.
(2021)

2 Hsieh & Li Susceptibility Trustworthiness, fairness, and justifiability

(2020) towards Source of the source were significant.
Credibility

3 Mariani. & Online reviewers' Review ratings, review comments, helpful

Predvoditeleva behavior votes, and length of the textual review
(2019)

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 positively impact review continuity and
frequency.

4 Mariani & Type of Reviewers Helpful reviewers are those who post
Predvoditeleva reviews actively travel more.
(2019)

5 Nieto-Garcia, Reputation and Message and messenger determine review

Resce, expertise of the usefulness.
Ishizaka, Reviewer, star
Occhiocupo, & ratings, and length
Viglia, 2019 of reviews

6 Heng et al. Social media Results indicated that review quality and
(2018) platform as a source source were essential items influencing the
for knowledge on credibility of the consumer towards
brands assessment of online review.

7 Hajli, N. (2018) Information Online WOM was found to be a credible and

credibility helpful piece of information.

8 Chen et al. Identity of reviewers Quantitative variables of reviews viz. overall

(2017) on the social media review ratings, hotel stars, reviewer identity,
platform etc., are helpful on social media.

9 Chen, Hong, & e-WOM and When e-WOM valence was positive,
Li (2017) association-based corporate posting on consumers’ CSR
strategy for associations was established to be
corporate posting on significant.
social media

10

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 10 Hsu, Yu, & Online reviews on Lower purchase intention was observed
Chang (2017) purchase intention when subjects were exposed to harmful
online customer reviews.

11 Zhao et al. Online textual Length of the reviews reduces customer

(2019) reviews satisfaction levels.

12 Weisstein et al. Negative online Consensus in online negative WOM

(2017) WOM communication impacts potential
communication evaluations of the firm.

13 El-Said (2020) Responding to single A complaint framework was developed for

star reviews lower-star rating reviews.

To summarize, the literature review recognizes that online reviews (a prominent form

of e-WOM) are an essential force that influences consumers’ online purchases.

Consumers frequently refer to online reviews and are primarily dependent on the type

of responses shared by the reviewers. The researchers indicated that the reviewer’s

expertise, star ratings, length of reviews, the credibility of information, reviewers’

behavior, and the reviewer’s identity are the key factors that impact potential

evaluations of consumers’ purchase journey. However, such variables have not yet

been grouped to constitute a scale for measuring online reviews. This study identifies

relevant variables and develops a measurement model to propose a scale for online

reviews based on the literature review.

3. Research Methodology

3.1. Scale Development Procedure

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The research article adopts recognized procedures of Churchill, 1979 and Brod, Tesler

& Christensen, 2009 to construct the measurement scale: a qualitative and

quantitative study involving a consumer survey followed by a purification study and

data validation. Figure 1 below depicts the research scheme adopted for the scale

development procedure.

Purification Validation

Exploratory Factor Replication of

Qualitative Study Analysis Confirmatory
Item Generation Confirmatory Factor Analysis
Factor Analysis Study of
Study of Reliability, Reliability,
Convergent and Convergent and
Divergent Validity Divergent Validity

Figure 1. Research Scheme for Scale development

To develop generalizability and improve the scale's validity, several inquiries are

necessary to be performed for the study (Spake et al., 2003). For the present inquiry,

we conducted three studies which are provided as below:

The first phase – Qualitative Study: Variables to be part of the study were

identified through literature. This was followed by Four mixed-sex Focus Group

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 Discussions (FGDs) with 10-12 shoppers each, which helped explore variables

and check the applicability of variables identified through literature.

The second phase – Purification: Exploratory Factor Analysis (EFA), was

conducted with 380 respondents, which resulted in four-dimensional factors –

Source Credibility, Volume, Language, and Comprehension and Relevance. The

same factor structure was confirmed through Confirmatory Factor Analysis

(CFA)

Third phase– Validation: CFA was administered with a new set of 278

participants, and the 17-item scale termed ‘Online Review’ was validated.

3.2. Qualitative inquiry approach

The qualitative inquiry approach was followed by reviewing extant literature and

involving focus group discussions (FGD). This approach helped in item generation. The

item pools generated through literature are reflected in the statements below: Studies

have indicated that consumers give importance and attention to online customer

reviews (Kim & Song, 2018). These online generated reviews reflect upon the

arguments that shoppers categorize into positive and negative arguments based on

the pros and cons of the reviews (Risselada H. et al. 2018). Additionally, the number

of reviews is considered anchored by consumers who provide aggregate review

content rather than individual reviews (Grewal et al., 2020). It is not only about the

number of reviews, but consumers search for heuristic cues in the form of star ratings

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that will simplify their search and evaluation process (El-Said, 2020; Herhausen et al.,

2015).

On another side, extreme views depicted through ratings (5-star or 1-star) matter to

the shopper while evaluating their choices (El-Said, 2020). In the process of

comparing, recent or current reviews are valued as being more credible in terms of

providing evidence about the products they search for (Shareef et al., 2019). Research

has posited that consumers value those online-generated reviews reviewed based on

their product use and experience (Ahani et al., 2019). Studies have reported that when

reviewers reveal their identity or their real name and photo, consumers are better

positioned to evaluate their product and service choice as they get connected and

relate to the overall experience (Munzel, 2016). These attributes of online customer

reviews where reviewers’ identity disclosures and level of expertise are revealed,

consumers get positively influenced (Mariani & Predvoditeleva, 2019). Literature has

depicted that consumer weighs negative messages much more than positive

messages in their evaluation criteria (Weisstein et al., 2017). Hence, the sellers and

managers need to respond immediately, effectively, and authentic to these negative

messages to generate positive customer loyalty (El-Adly., 2019). Researchers have

argued that in addition to the semantic content of the messages, linguistic styles also

shape shoppers’ choice decisions (Tran et al., 2020).

Further, clear and unambiguous reviews appeal to the readers, reinforcing the

influence of the reviews (Stein et al., 2016). Finally, shoppers go through online

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customer reviews across multiple websites, chats, and internet forums to support their

purchase decisions (Goes et al., 2014). As prompted by extant studies, the factors that

influence consumers’ online shopping environment are stated below:

1. I look for reviews that describe the benefit/problem of the product (Kawaf et al.,

2019).

2. I look for reviews at multiple sites to confirm the review scores (Goes et al.,

2014).

3. The average score/ star rating is essential for a product (El-Said, 2020).

4. I prefer that the reviews included are appealing and straightforward (Tran et al.,

2020).

5. I prefer that reviews supported by relevant arguments are critical (Risselada H.

et al. 2018).

6. If the numbers of reviews are less, I hesitate to consider the reviews while

buying the product (Grewal et al., 2020).

7. Negative reviews influence more than positive reviews (Weisstein et al., 2017).

8. I trust the information more where I believe the reviewer has adequate

knowledge/ expertise for the product (Vermeulen & Seegers, 2009).

9. I look for extreme views (5-star or 1-star) while evaluating a product (Sen and

Lerman, 2007).

10. The reviews are more credible if the name/image of the reviewer is available

(Munzel, 2016).

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 11. I believe reviews impact my decision to purchase or not to purchase a product

(Kim & Song, 2018; Hsu, Yu & Chang, 2017).

12. I look for the seller's response instead of the customers’ reviews (Munzel, 2016).

13. The review is more helpful if the message is clear and unambiguous (Lu, Wu &

Tseng, 2018).

14. Recent reviews are more important than older ones (Lee et al., 2017).

15. I believe the review is more credible when the reviewer is the product's user

(gender/age-specific products) (Mariani & Predvoditeleva, 2019).

3.3. Assessment of Face Validity

The suitability of the initial pool of 15 items was judged by a panel of experts

comprising industry and academic fraternity from a relevant field of experience. Face

validity is an extensively recognized practice for generating and editing items where

the expert panel validates the correctness of each item before getting into the content

validity stage (Hardesty & Bearden, 2004). To gain more insights and examine the

content validity, FGDs were conducted (Malbon, 2013).

3.4. Focus Group Discussions (FGDs) – Overview, Characteristics of participants and

Methodology

Four mixed-sex FGDs were held with 10-12 shoppers each. These FGDs helped deeper

understand the research topic and identify variables not addressed in the literature.

The members for the FGDs were selected using the convenience sampling method by

visits to universities, shopping complexes, and housing associations after taking

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appropriate consent from the establishments of these sites. Each focus group had the

basic parameters defined based on gender, education, marital status, and occupation

covering a good mix of students, business professionals, and those in service (blue-

collar and white-collar jobs) aged 18 and 45 years. This young segment was chosen

because it is the critical audience for e-tailers to understand online shopping behavior

(Arul Rajan, 2020). The total participants were 44, of which 25 were female, and 19

were male. The group members provided broad concerns over the underlying online

reviews, their desires, and interests and suggested strategies they would recommend

or would avoid when purchasing goods and services in the online shopping channel.

The generation of such thoughts and ideas gave the authors a reality of the consumers’

viewpoints and identified four specific items. Through this exploratory phase, the

following four items/variables were recognized and were appended to the list of 15

items identified through literature:

16. I believe the style of writing reviews should be unbiased or impartial.

17. The information or message in the topmost negative reviews and topmost

positive reviews are helpful in my purchase decision.

18. I trust the review only if it comes from a verified customer (The online retailer

mentions he/she is a verified customer).

19. The language style of reviews must be precise rather than metaphorical.

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In the next stage, these 19 items generated through extant literature and substantiated

by FGDs were administered using a survey instrument involving a 5-point

agree/disagree Likert scale among the study respondents to assess the dimensionality

of the items identified.

3.5. Scale Purification Approach

A scale-purification framework is a widely accepted approach in empirical consumer

behavior studies that distinguishes the dimensionality of the constructs and item

levels using statistical criteria (Wieland, Durach, Kembro & Treiblmaier, 2017). Those

criteria assess the quantitative data involving standardized techniques, including

exploratory factor analysis and comparing the cut-off values of alpha coefficient; and

confirmatory factor analysis (Wieland et al., 2017).

3.6. Stage 1: Exploratory Factor Analysis (EFA)

EFA data was collected from 431 consumers in the age group of 18 to 45 years in India.

Out of 431 responses, 380 were retained for the final analysis; 51 missing and

inconsistent responses were eliminated. The sample size of 380 was identified to be

appropriate, especially for EFA with factor loadings greater than equal to 0.50 and no

cross-loadings and reliability of greater than equals 0.70. Convenience samples were

identified through housing complexes, shopping malls, and educational campuses. The

qualifying question to the respondents was: “What forms of online customer reviews

do consumers rely on during product purchase decisions?”. This confirmed that the

sample has knowledge and awareness of online reviews and identifies the variables

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related to online customer reviews in the consumer decision-making journey. The

same approach was adopted for selecting and approaching respondents online. A self-

administered questionnaire collected the data for both offline (310) and online

participants (121). The questionnaire contained 19 items, and the participants

appraised the items on a 5-point Likert-type, i.e., agree/disagree response scale,

which was deemed suitable for self-administered online questionnaire studies (Hair

et al., 2010). This Likert-scale design ranges from agreement or disagreement with

level of quality 5 = Strongly Agree, 4 = Agree, 3 = Neutral, 2 = Disagree and 1 =

Strongly Disagree. The 5-point response scale is the simplest of all, which allows the

interviewer to complete reading the statements or collecting information on all the

scale descriptors in a short period and provides flexibility to respondents for the

midpoint (option 3) if they are unsure of the response. A 5-point Likert-scale design is

also claimed to be a good measurement model with significantly higher reliability

(Adelson & McCoach, 2010). The demographic profile of the respondents is mentioned

in Table 2.

Table 2. Demographic Profile of the Respondents

Sl. No Description Frequency %

1 Gender Male 241 63.42

Female 139 36.57

2 Marital Status Married 248 65.2

Unmarried 132 34.7

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 3 Age (in years) 18-22 63 16.58

23-27 135 35.53

28-32 87 22.90

32-36 61 16.05

>36* 34 8.9

4 **Monthly Income USD, 334 88 23.2

(USD = United USD, 669 111 29.2

States dollars) USD, 1,338 130 34.2

>USD, 1,338 51 13.4

5 Occupation Student 53 13.94

Business 27 7.10
Service 259 68.15

Others 41 10.79
6 Education Graduate 112 29.47

Post-Graduate 234 61.58

Postgraduate & above 34 8.95

* less than or equal to 45 years ** USD equivalent of Indian Rupee

The data received on the 19 items from the participants were analyzed through

exploratory factor analysis (EFA). They were verified for reliability using the

established principal axis factoring procedure with varimax rotation and the eigenvalue

method, which helped determine the list of factors (Hair et al., 2010). Varimax rotation,

a common form of Principal component analysis or factor analysis, resulted in four

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factors with factor loadings of 0.5 and higher being considered practical and

acceptable for the analysis (Hair et al., 2010). Upon evaluation, the items with loadings

less than 0.5 and did not adequately load on either of the factors were removed. Two

items, the information or message in the top positive and top negative reviews, are

helpful in my purchase decision (Item 17), and the language style of reviews must be

precise rather than metaphorical (Item 19) were dropped from the study because of

low factor loading in EFA (with factor loadings 0.5 and lower). The results of EFA

analysis involving the 17 items led to the identification of a four-factor structure. The

four extracted factors can be named Source Credibility, Volume, Language

Comprehension, and Relevance. The item-factor relationship resulted in forming factor

1 having items viz. I trust the information more where I believe the reviewer has

adequate knowledge/ expertise for the product (Item 8); I believe the review is more

credible when the reviewer is the user of the product (gender/age-specific products)

(Item 15); I trust the review only if it comes from a verified customer (The online retailer

mentions he/she is a verified customer) (Item 18); The reviews are more credible if

the name/image of the reviewer is available (Item 10); I look for reviews at multiple

sites to confirm the review scores (Item 2); I believe the reviews that are supported by

relevant arguments are critical (Item 5) and I look for reviews those describe the

benefit/problem of the product (Item 1).

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Further, the above items indicate that online customer reviews are perceived to be

much more credible and trustworthy; hence the construct is Source Credibility. The

item-factor relationship resulted in factor 2 having items viz. If numbers of reviews are

less, I hesitate to consider the reviews while buying the product (Item 6); I look for

extreme views (5-star or 1-star) while evaluating a product (Item 9), and the average

score/star rating is essential for a product (Item 3). As these items validate that the

numbers of customer reviews/star ratings of online reviews are the qualifying criteria

that simplify consumer's search and evaluation process, the authors chose to identify

this factor as Volume. The item-factor relationship resulted in containing factor 3

having items viz. The review is more useful if the language of reviews is simple and

appealing (Item 4); The review is more helpful if the message is clear and unambiguous

(Item 13), and I believe the style of writing reviews should be unbiased or impartial

(Item 16). These items provided evidence that the language and the semantic content

of reviews appeal to the user towards online consumer sales, and hence we chose to

recognize the factor as Language and Comprehension. The item-factor relationship

resulted in forming factor 4 having items viz. I look for the response of the seller in lieu

of the customers' reviews (Item 12); Negative reviews influence more than positive

reviews (Item 7); I believe reviews impact my decision to purchase or not to purchase

a product (Item 11) and Recent reviews are more important than older ones (Item 14).

These items indicate that consumers relied on the positive/negative type of customer

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reviews to reinforce their online purchase choice, and therefore the authors decided

to term this factor as Relevance.

3.7. Stage 2: Confirmatory Factor Analysis (CFA)

In Stage 2, the empirical results of EFA were confirmed using an iterative process

involving Confirmatory Factor Analysis (CFA) fit indices (Anderson and Gerbing, 1988)

and chi-square testing (Voss et al., 2003). CFA for the 17 items was conducted using

the IBM SPSS AMOS program which tests the factorial validity of the measuring

instrument (Gallagher, Ting & Palmer, 2008; Kline, 2015).

Empirical measures of the model estimation were evaluated through internal

consistency reliability, convergent and discriminant validity as proposed by Hair et al.,

2010 in their book Multivariate Data Analysis. The factor loadings having values

greater than 0.5 are considered practical and acceptable for the analysis (Hair et al.,

2010). The results of CFA and reliability values are depicted in Table 3. The reliability

of the seven items of the scale dimension that were loaded on factor 1 (Source

Credibility) has a Cronbach’s α(alpha) value of 0.962. The three items loading on

factor 2 (Volume) have a Cronbach’s α (alpha) value of 0.959. The three items loading

on factor 3 (Language and Comprehension) have a Cronbach’s α (alpha) value of

0.977, and the four items loading on factor 4 (Relevance) have a Cronbach’s α value

of 0.959 (additional information is illustrated in Table 3), which were considered

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acceptable (α>0.70) (Nunnally, 1978; Kline, 2011) and hence confirming the reliability

of scale dimensions.

Table 3: Confirmatory Factor Analysis (CFA)

Standard Reliability
Sl.N Mean Factor
Items/Variables Sources* Deviation (Cronbac
o. score Loadings
(SD) h alpha)
Factor 1: 0.962
Source Credibility
1 I trust the information more Hsieh & Li, 2020 3.2895 1.00678 0.846
where I believe the
reviewer has adequate
knowledge/ expertise for
the product.

2 The review is more credible Mariani & 3.3974 1.10527 0.788

when the reviewer is a Predvoditeleva, 2019
product user (gender/age-
specific products).

3 I trust the review only if it Exploratory Study 3.3211 0.96212 0.964

comes from a verified
customer (The online
retailer mentions he/she is
a verified customer).

4 The reviews are more Munzel, 2016 3.3237 1.01854 0.879

credible if the name/image
of the reviewer is available.
5 I look for reviews at multiple Goes et al., 2014 3.2763 1.03244 0.882
sites to confirm the review
scores.

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 6 I believe the reviews that are Risselada H. et al., 3.2289 1.06650 0.888
supported by relevant 2018
arguments are important.
7 I look for reviews that Munzel, 2016 3.3500 0.96979 0.976
describe the
benefit/problem of the
product.
Factor 2: 0.959
Volume
8 If the reviews are less, I Grewal et al., 2020 3.5842 0.89606 0.907
hesitate to consider the
reviews while buying the
product.
9 I look for extreme views (5- Sen & Lerman, 2007 3.5474 0.92766 0.933
star or 1-star) while
evaluating a product.
10 The average score/star El-Said, 2020 3.6000 0.93481 0.986
rating is important for a
product.
Factor 3: 0.977
Language and
Comprehension
11 The review is more useful if Tran et al., 2020 3.3263 1.09874 0.952
the language of reviews is
simple and appealing.
12 The review is more helpful if Stein et al., 2016 3.3447 1.11104 0.969
the message is
unambiguous.
13 I believe the style of writing Exploratory Study 3.3500 1.11886 0.980
reviews should be unbiased
or impartial.
Factor 4: 0.959
Relevance

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 14 I look for the seller's Munzel, 2016 3.4816 0.92584 0.798
response in lieu of the
customers' reviews.
15 Negative reviews influence Weisstein et al., 3.5184 0.93152 0.962
more than positive reviews. 2017
16 I believe reviews impact my Kim & Song, 2018; 3.5816 0.92241 0.958
decision to purchase or not Hsu, Yu & Chang,
to purchase a product. 2017
17 Recent reviews are more Lee et al., 2017 3.5289 0.93972 0.979
important than older ones.
(*The items/variables have been aptly modified based on a qualitative study, which involved
discussions with the industry/subject matter experts and participants of the study)

Source: Contribution by authors

The validity on the construct level was statistically examined by computing

discriminant validity and convergent validity (Fornell & Larcker, 1981). Convergent

validity was assessed, and the reliability at a level greater than 0.7 was identified as

significant (as depicted in Table 4) for all items of the measurement model. Model

evaluation was also conducted through discriminant validity where the correlation

between the factors was measured, and all the conditions were met as per the

recommendations for use by Fornell and Larcker criteria, 1981 (as depicted in Table

5). Discriminant validity procedure has been applied by research scholars in reputed

research journals viz. Journal of Marketing Research (JMR), Journal of the Academy of

Marketing Science (JAMS), Journal of Business Research (JBR), and Journal of

Marketing (JM) (Shiu et al., 2011). Our research supports this guiding principle for

discriminant validity.

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The measurement model consisting of the 17 variables/items identified through the

item-generation stage offers an acceptable model-fit index as recommended by the

thresholds proposed by Hair et al., 2010 and Byrne 2010, 2013; Hu & Bentler, 1999 (as

depicted in Table 6). Thus, the authors finalized and proposed the Online Customer

Review (OCR) Scale as elucidated in Table 3.

Table 4. Convergent Validity Estimates (Purification phase: 1st stage

data collection)

Composite Convergent
Constructs AVE Reliability
Reliability (CR) Validity

SC 0.962 0.794 √ √

V 0.959 0.888 √ √

LC 0.977 0.935 √ √

R 0.959 0.860 √ √

Note: As per the recommended value for convergent validity, CR must be 0.70 or higher, the
Average Variance Explained (AVE) must have the cut-off value 0.50 or higher, and the
CR value must be greater than AVE (Hair et al., 2010).

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 Table 5. Discriminant Validity Estimates (Purification Phase: 1st stage data

collection)

Latent AVE SC V LC R
Constructs
SC 0.794 0.891
V 0.888 0.186 0.943
LC 0.935 0.309 0.351 0.967
R 0.860 0.205 0.303 0.765 0.927
Note: The values/elements across the diagonal, indicated in bold, are the √AVE, and the

off-diagonals are the correlations between constructs.

Table 6. CFA Results: Measuring Model Fit (Purification Phase)

Threshold
Indicators *CFA Results Source
Value
CMIN/df 2.181 Three or Hair et al. (2010); Byrne (2010)

lower

GFI 0.934 0.90 or higher Somer et al. (2003)

NFI 0.972 0.90 or higher Hair et. al. (2010, 2012); Hu & Bentler

(1999)

SRMR 0.0259 0.08 or lower Kline (2011)

RMSEA 0.056 0.08 or lower Brannick (2003)

CFI 0.985 0.90 or higher Hu & Bentler (1999)

NNFI (TLI) 0.982 0.90 or higher Hu & Bentler (1999)

AGFI 0.910 0.80 or higher Byrne (2010, 2013)

* The model fit indicators are within the acceptable threshold values

3.8. Scale Validation Approach

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The measurement model was validated using the same procedure involving the CFA

technique on an independent and new data set comprising 278 respondents. The

loadings of the factors for the purification and validation phase are summarized in

Table 7. The scale's reliability was assessed through the coefficients of Cronbach’s

alpha. The coefficients of the measurement scale were computed as 0.951 for factor

1 (Source Credibility), 0.953 for factor 2 (Volume), 0.955 for factor 3 (Language and

Comprehension), and 0.936 for factor 4 (Relevance) (as indicated in Table 8), which

met the acceptable level of being more significant than 0.70. This established the

reliability of the scale dimensions. The measurement scale also showed acceptable

convergent validity (see Table 8) and discriminant validity threshold values (see Table

9). The empirical findings of CFA confirmed the four-factor structure validation of the

proposed. The goodness of fit statistic fit provided a good fit (see Table 10). The

results of the validation structure conducted using the CFA technique indicated that

the model fit was adequate and has achieved a satisfied model fit with field data

(Somers et al., 2003).

Table 7. A comparison of Factor Loadings in Purification and Validation

Phases

Purificatio Validatio

n phase n phase

SC1  SC 0.846 0.828

SC2  SC 0.788 0.735

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 SC3  SC 0.964 0. 950

SC4  SC 0.879 0. 836

SC5  SC 0.882 0. 872

SC6  SC 0.888 0. 856

SC7  SC 0.976 0. 966

V1  V 0.907 0. 911

V2  V 0.933 0. 903

V3  V 0.986 0. 984

LC1  LC 0.952 0. 954

LC2  LC 0.969 0. 939

LC3  LC 0.980 0. 914

R1  R 0. 798 0. 701

R2  R 0. 962 0. 946

R3  R 0. 958 0. 939

R4  R 0. 979 0. 970

Table 8. Convergent Validity Estimates (Validation Phase: 2nd stage data collection)

Latent Composite Convergent

AVE Reliability
Constructs Reliability (CR) Validity
SC 0.951 0.750 √ √

V 0.953 0.871 √ √

LC 0.955 0.876 √ √

R 0.936 0.802 √ √

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 Table 9. Discriminant Validity Estimates (Validation Phase)

Latent AVE SC V LC R
Constructs
SC 0.750 0.866
V 0.871 0.216 0.933
LC 0.876 0.295 0.369 0.936
R 0.802 0.222 0.348 0.733 0.896
Note: The values indicated across the diagonals (identified in bold) are the √AVE, and

the off-diagonals are the correlations between the constructs.

Table 10. CFA Results: Measuring Model Fit (Validation Phase)

Cut off
Indicators *CFA Results
Criteria

AGFI 0.886 0.80 or higher

CMIN/df 2.096 Three or lower

NFI 0. 957 0.90 or higher

GFI 0.916 0.90 or higher

RMSEA 0.063 0.08 or lower

NNFI (TLI) 0. 972 0.90 or higher

SRMR .0335 0.08 or lower

CFI 0. 977 0.93 or higher

(* All the model fit indicators are as per the acceptable threshold/cut off values)

4. Discussion

The present study aims to propose a structured scale for online reviews. Such a scale

is necessary as online reviews have significantly influenced product and brand sales

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(Li, Chen & Zhang, 2020). With the advent of online retailing and various shopping

platforms, consumers are now shopping online and looking for opinions of other

shoppers posted on online shopping sites, platforms, and blogs (Fernandes et al.,

2021; Micu, Bouzaabia, Bouzaabia, Micu, & Capatina, 2019). These reviews' exposure

and subsequent influence have also been referred to as e-WOM (Shankar et al., 2020).

In the absence of face-to-face interaction, customers evaluate the reviews based on

their perceived credibility (Heng et al., 2018). Literature suggests that consumer-

generated online reviews are gaining importance and popularity (Lee & Choeh, 2018)

and influencing purchase decisions (Duarte, e Silva & Ferreira, 2018). Such consumer

endorsements in online platforms are trustworthy compared to seller-generated

information (Hajli, 2018). However, there are many factors relating to online reviews,

like contributing to writing online reviews (Thakur, 2018), several reviews (Grewal et

al., 2020), star ratings (Li et al., 2020), reviewer expertise (Vermeulen & Seegers,

2009), quality of reviews (Risselada et al., 2018) etc. that impact the review credibility.

Hence the current study establishes that customer reviews are pivotal in online

purchases by studying various variables that contribute to the reliability of the reviews

and proposes a scale to describe the elements of online reviews and their impact on

the consumer purchase decision. The research adopted the scientific and systematic

approach to developing the scale using 17 items. These 17 items were identified

through literature and refined through Focus Group Discussions and Factor Analysis.

Based on the CFA output and subsequent validation, the study proposes an Online

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Review Scale corroborating four constructs: Source Credibility with seven items,

Volume with three items, Language and Comprehension with three items, and

Relevance with four items.

Source credibility refers to the trust customers attach to the review's writer (Hsieh &

Li, 2020). Online shoppers trust a review if they believe the author of the review is an

actual user of the product and if she/he has mentioned the benefits or the problems

of the product (Ismagilova et al., 2020). Customers also check the reliability of the

reviewers whether she/he is verified customer by the e-retailer or the platform

(Mariani & Predvoditeleva, 2019). Consumers' reliance on online reviews is also based

on the reputation of the reviewer (Li et al., 2020). The reliability is higher if the reviewer

is a user of the product rather than merely the buyer (Thakur, 2018). Hence a review

for a product meant for women is more reliable if the reviewer is a woman rather than

a man.

In addition to reliable reviews, online shoppers also look for the Volume (number) of

reviews for a particular product on the site. The review length may or may not facilitate

consumers in their decision-making journey (Li et al., 2020). However, positive or

negative reviews do influence the conversion to product sales. Positive reviews evoke

active consumers purchase decisions (Weisstein et al., 2017). Even if the review is

positive or has emotional content (Guo et al., 2020), if the number of reviews is

perceived to be less, customers are averse to accepting it (Yi & Oh, 2022). While

evaluating reviews, it may be easy to look at the average score/rating to make an

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overall impression of the product (Rauschnabel et al., 2019). However, customers are

not persuaded by the average score, and they look for extreme positive and negative

views (Cao et al., 2011). A few extreme negative views can also dissuade a customer

from buying a product with an acceptable average rating (Li, Meng & Pan, 2020).

Consumers consider review ratings as anchors to minimize the risks associated with

choosing the right product (Yi & Oh, 2022). Consumers also find the number of reviews

being ‘helpful’ as they tend to derive aggregate information from all the reviews they

refer to (Grewal et al., 2020; Yi & Oh, 2022). In this respect, the third construct

identified in the scale is Language and Comprehension. Customers rely more on the

reviews where the language is simple and appealing. Customers tend to disbelieve a

review if they feel the customer is biased from the language used in the review. Hence

it seems customers can make out disgruntled and unjust customers if they have used

improper language and such reviews tend to be less authentic and reliable. Moreover,

if the rating by the reviewer does not support the description, customers tend to rely

less on such reviews. Clear and unambiguous reviews are perceived to be more reliable

and positively reinforce buying decisions (Lu, Wu, and Tseng, 2018).

Apart from Source Credibility, Volume of reviews, and the Language of the reviews,

what matters to a customer is the Relevance of the review to the customer and the

response of the seller/retailer to a negative review. Recent reviews are considered

more reliable than older reviews (Kawaf et al., 2019). Some e-retailers also display the

recent reviews at the top or give options to customers to select a period to access the

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reviews. Like negative word of mouth in the physical place, negative online reviews

dissuade a customer more than a positive review can influence (Li, Meng & Pan, 2020).

Hence negative reviews are more relevant to customers than positive ones. Moreover,

deceptive or fake reviews may also lead to negative WOM and dissuade consumers

from purchasing (Munzel, 2016). This means a lot to e-retailers and online platforms

in strategizing their response towards negative reviews and solving customer

complaints to reduce customer attrition.

In summary, customers checking the credibility of the source of the reviews looks for

a higher number of reviews to trust the rating/score during the online purchase. These

two act as vital influencing factors while evaluating reviews on online platforms.

Simultaneously, the language and relevance of the review also influence the consumer

purchase decision.

5. Contributions

5.1. Theoretical Contributions

The study has notable theoretical contributions. First, it is the pioneering work that

measures the effectiveness of online consumer reviews. This has contributed to

developing and validating an Online Review scale with 17 items and investigated the

impact of online customer reviews on the consumer purchase decision. The scale

measures the helpfulness of online reviews in consumer purchase behavior. The

study's empirical results indicated that the developed scale has a reliable

measurement model (Byrne, 2013; Hair, Sarstedt, Ringle, Mena, 2012). The study's

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outcomes contribute to developing a theoretical understanding of consumers'

purchase decisions by using the scale of the online review with new dimensions.

Second, it renews the focus on the importance of four factors such as source

credibility, relevance, volume, and language in analyzing consumer purchase decisions.

Third, the study provides new perspectives and directions to online reviews literature

by adding newer items.

5.2. Managerial Implications

Firms should actively weave their products, services, and brands into this online review

discourse. This study has various implications for managers. First, literature observes

that the attributes of online customer reviews such as review quality (richness),

reviews ratings, the relevance of the reviews (Nieto-Garcia et al., 2019), and the

reviewers’ identity disclosures and their level of expertise (Mariani & Predvoditeleva,

2019) depict positive influence towards consumer online purchase decision. This helps

both consumers in their decision-making and online retailers regarding product design,

display, and managing relationships. Secondly, online retailers and marketplaces can

use the ‘Online Review’ scale to get more customer insights into how customers gather

information, arrive at purchase decisions, and retailers/brands can manage online

services accordingly. The scale can segment consumers who are most likely to get

influenced by online reviews. Thirdly, it is observed that consumers decide their buying

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decisions based on various types of online information, such as positive or negative

types of online reviews and the number of online reviews. Before making their

purchase decisions, consumers check the information about the company and ratings

about the products on their respective websites (Stuppy, Mead, Van Osselaer, 2020).

Our result also showed that consumers look for extreme reviews (5-star or 1-star)

while evaluating a product or brand, consistent with the findings of Sen & Lerman

(2007). . Hence, the proposed scale will help retailers understand consumer

tendencies towards the susceptibility of online reviews and thereby their behavior can

be monitored and evaluated to devise appropriate programs. Fourthly, consumers are

generally influenced by the primacy effect, which might influence them if the online

information is negative. This research will enable online retailers to target the

segments that value negative reviews more than positive reviews in their purchase

decision.

6. Conclusion

The research investigates the dimensions that constitute online reviews and

establishes a scale for measuring the online reviews labeled as OR Scale (ORS). The

scale fills the research gap and will guide the stakeholders in measuring online

customer reviews. The measurement model developed is a reliable and valid tool that

drives online consumer purchase decisions. The empirically derived four-factor model

resulted in Source Credibility, Volume, Language Comprehension, and Relevance

dimensions. The items of factor 1 (Source Credibility) reflect upon consumer

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evaluations of online reviews through varied online sources whereby users examine

the source's trustworthiness along with reviewer expertise and credentials. The Factor

2 (Volume) items reflect the effect of online reviews, characterized by the number of

reviews, ratings of the reviews, etc. The items of factor 3 (Language and

Comprehension) reflect upon the content quality by evaluating texts of online reviews.

The items of factor 4 (Relevance) reflect upon the quality of the reviews, such as

positive and negative reviews, recent versus older reviews, or the seller's response to

customer reviews. The research scholars, academicians, practitioners can now

examine the applicability of these factors and to what extent they differ across cultures

and various demographics of the consumer segments. The authors stress building

trust between customers and sellers through the scale in online marketplaces. The

identified scale items can guide customers during their purchase journey and be

helpful to the online retailers to design their consumer response strategy. Online

Reviews are omnipresent and can act as an important feature of retailers’ websites

and provide customers with a comprehensive shopping experience.

Limitation and Further Scope of the Study

The study has used questionnaires to collect information. The authors propose that

future scholars conduct in-depth interviews to support or augment the research. The

study adopted convenience sampling, having samples between 18 – 45 years, so the

results cannot be generalized to consumers of varied age groups across different

cultures and geographical boundaries. It would rather be motivating for future scholars

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to study online customer reviews across generalized samples by widening the age

group and geographic scope and thereby comparing their customer purchase journey.

The current research checks the effect of OCR across consumers in a specific age

group, whereas future studies may focus their analysis only on variables like gender

effects. The influencing role of OCR across gender towards online shopping

environments and different product types can be verified.

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