Differential Effects of Multi-Dimensional Review Evaluations on Product Sales for Niche vs. Mainstream Products

To understand the effect of increasingly popular, multi-dimensional online reviews on product sales, we extend the overall-rating-based analysis by incorporating multi-dimensional ratings to examine how multi-dimensional review evaluations affect product sales for niche vs. mainstream products. We conduct complementary studies in two product categories (i.e., automobile and laptop) with different methods (three lab experiments, in addition to a panel data analysis of a unique proprietary data set). Our paper reveals three key insights to the emerging literature and phenomenon on multi-dimensional review systems: (a) the inter-dimensional rating variance is more negatively related to product sales for a mainstream product than for a niche product; (b) the intra-dimensional rating valence on the dominant dimension of a product is more positively related to product sales for a niche product than for a mainstream product; and (c) the intra-dimensional rating variance on the dominant dimension of a product is more negatively related to product sales for a niche product than for a mainstream product. Our research provides important managerial implications to the product providers and review platforms.