Do verified consumer reviews affect sales? An empirical analysis of mixed review systems in the film industry

Abstract

Consumers refer to reviews in online review systems to collect information for their purchasing decisions. Therefore, the introduction of 'verified purchase badges' in some review systems can make an interesting and dynamic impact on product sales. The main objective of this study is to find the differences in the effect of verified and non-verified purchase reviews on product sales from the perspective of WOM metrics (i.e., volume, valence, and helpfulness). Therefore, this study performs an empirical analysis by collecting 866,221 online movie reviews. The results show that volume and valence have a positive effect on the movie sale. However, two group analyses based on whether the 'verified purchase badge' or not show some contrasting results. Valence, helpfulness of verified reviews, and volume of non-verified reviews have positive effects on ticket sales. Furthermore, in terms of reviewers' rating patterns, as the ratio of clusters with a high ratings pattern in the verified group and the ratio of clusters with a varied ratings pattern in the mixed group increase, the effect on sales also increases. Our results break the preconception that all verified purchase reviews always affect sales.