\ Variables: Presence of Reviews and Price 2. Reviews Have a Greater Conversion HIGHER-PRICED PRODUCTS, HIGHER Impact for Higher-Priced Products CONVERSION IMPACT CONVERSION INCREASE FROM THE To better understand the conversion impact of reviews in various circum- INCLUSION OF REVIEWS stances, we looked at the impact of displaying reviews on higher-priced 400% versus lower-priced products. We found that reviews had a greater impact on purchase likelihood for higher-priced items than cheaper ones. 300% The data from the high-end gift retailer showed that this was true when 200% comparing high-priced vs. low-priced categories. And the research from 100% the lower-priced consumer products retailer showed that this was also true when looking at high-priced vs. low-priced options within categories 0% (e.g., regular cereal vs. organic cereal). ¢ Low-Priced Category ¢ High-Priced Category When the price is higher, there is more risk involved in the consumer’s decision. Having more information via reviews helps mitigate that risk. Based on data from the gift retailer, when reviews were displayed for a lower-priced product, the conversion rate increased 190%. However, for a higher-priced product, the conversion rate increased 380%. Askalidis, Y. and Malthouse, E.C.. “The Value of Online Customer Reviews.” RecSys ‘16 Proceedings of the 10th ACM Conference on Recommender Systems, 2016. Malthouse, E.C., Maslowska, E., and Viswanathan, V. “Do Customer Reviews Drive Purchase Decisions? The Moderating Roles of Review Exposure and Price.” Decision Support Systems, 2017. 7 \ How Online Reviews Influence Sales \ spiegel.medill.northwestern.edu