Electronic Word of Mouth in Retail: A Critical Analysis of Theory

This report provides a comprehensive analysis of electronic word of mouth (eWOM) in the retail sector. It explores the definition, advantages, and disadvantages of eWOM, highlighting its impact on consumer decision-making and the overall marketing landscape. The report delves into the role of online reviews, social media, and other digital platforms in shaping consumer perceptions. It also discusses the connectivism learning theory in the digital age and its relevance to eWOM. The analysis further identifies current trends in eWOM and their implications for digital marketers, emphasizing the importance of monitoring and managing online conversations to enhance brand reputation and customer engagement. The document concludes by stressing the significance of eWOM as a powerful tool for businesses to influence consumer behavior and drive sales in the retail industry.

Electronic Word of
Mouth in retail sector

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Electronic word of mouth ...........................................................................................................3
Advantage of electronic word of mouth......................................................................................4
Disadvantage of electronic word of mouth ................................................................................5
Connectivism: A Learning Theory for the Digital Age..............................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Electronic work of mouth can be described as positive as well as negative statement
which is made by former, potential or actual customers about products of a company that is
available to different people or institution and can be spread over internet (Chang and Wang,
2019). It is required by customers while buying a product as customers is looking for information
which was provided by other customers. This project report includes descriptive of electronic
word of mouth which is break into different description. It also consist discussion of theory
related to this area and support to this concept.
TASK
Electronic word of mouth
Electronic word of mouth can be described as positive as well as negative statement
which is made by different customers related to a company or any product that is available for
different people and can be spread over internet. It is a concept that is related to application of it
with different user generated content in context of digital advertising mix and can be overlapped
with viral advertising (Chu and Chen, 2019). It is used by customers while buying a product as
customers require these information that is written through other customers on internet. In this,
marketers are taking step in order to generate, support as well as amplify these Electronic Word
of Mouth in order to influence decision making process of customers. Electronic Word of Mouth
provide a road map which helps to marketers to understand working of organisation and also
allow them to enhance effectiveness. Electronic Word of Mouth play important role as it heavily
influence on internet and create impact on ways of a customers make decision related to
purchase of products and service. Customer are not only depended on information provided by
marketer instead they are looking for honest review of other customers (Chu and Kim, 2018).
For instance, while shopping online on a website like Amazon, customers is looking of review of
that products in order to make decision related to purchase of product. So, it is important for
marketer to focus on Electronic Word of Mouth as it create high influence on products and
service of customers. EWOM is consider as important market force for customers as people find
out these as most unbiased as well as trustworthy sources in order to made a decision.

Advantage of electronic word of mouth
EWOM is a creating buzz in field of market which provide various benefits various
benefit to organisation and goes viral if message of company is catchy and address in appropriate
manner in order to attract more attention of customers. It is considered as important factor at in
terms of physical as well as digital channels (García-de los Salmones, Herrero and Martínez,
2021). It provide different benefits to an organisation specially in retail sector as in order to buy a
product and allow customers remain loyal with them. Some of these benefits of EWOM for an
organisation is mentioned below:
Influence information search: People are allowed to share information and experience
on internet related to quality, information of products. EWOM is one of important concept which
is essential in order to eliminate ability of a person to judge to credibility of sender and their
message (Electronic Word-of-Mouth (eWOM) Marketing, 2016). Potential customers are less
interest in order to know the customer who as provided EWOM in e-commerce websites. In this
situation, receiver of EWOM will evaluate more attribute as per quality, authority, attractiveness
and authenticity of information.
Share with people: Reviews website, social media are getting g success in market as it
allow people to share information. People share information on social media due to various
reason as they are interested in expressing experience and also love to networking which allow
them to helps other people. There are some other reason for sharing these information as it allow
people to made connection with people (Hwang and Zhang, 2018). EWOM can be worked as
chain as it allow one person to share information with their friends and also allow their friends to
share information with their other friends (The Importance of Electronic Word-of-Mouth
Marketing, 2022). It make EWOM more important for an retail organisation. For instance, in
order to buy a product from H&M from its online store, a customers is seeing review of it on
social media and also ask to their friends about reviews of products of company. It increase more
positive situation when customers see their friends to wear that brands and also make decision to
buy that products from a specific organisation.
Increase reach of company: EWOM helps an organisation to increase reach of products
and service in many ways. For instance, there are 5 blogger who has network with around 1000
people. That blogger is passionate about a product of company, will share abut company to their
network of people which increase awareness of products of company among thousands of people

which increase reach of products and service of company. It can be also considered as affiliate or
referral strategy of market which is important for an organisation specially in retail industry.
People while buying products on retail industry are daily consumable products and for which
they are depended on information provided by other people. EWOM is a strategy which is more
time consuming in compare to advertising. It is more depended on information shared by people
and also how they are taking it.
Make people feel safer to buy: Advertisement is developed by companies in order to
make their product look foods and also to increase awareness of products and service of people
in minds of consumer. Information related to a products and service comes from different source
like from friends and family (Krishnamurthy and Kumar, 2018). These source provide complete
and straight points related to a products and service and also customers are more believing on
their information. It create influence over decision of customers and make them feel secure while
purchasing of products and service.
Disadvantage of electronic word of mouth
EWOM is creating various advantage for an organisation as it allow them to increase
reach of products and also to attract more new customers on basis of positive reviews. But
sometimes it create negative impact over operation of company which are mentioned below:
Potential negative impact: EWOM is one of component which create negative impact
over image of company. These electronic word of mouth is visible to different customers which
can create awareness of products but sometimes, there are negative review given by some
customers which can create negative impact on decision making process of company. Review
related to a product and service create huge influence over decision making of company
(Loureiro, Gorgus and Kaufmann, 2017). Negative review of a customers about a product create
negative impact over other customers while they are making decision related to purchase of
products and service.
Uncontrollable nature: EWOM are of uncontrollable nature as any person is free to give
their review related to a product. These EWOM cannot be under control of an organisation which
sometimes results in negative impact for a company (Electronic Word-of-Mouth (eWOM)
Marketing, 2016). Sometimes, there is not mistake on side of company but customers are giving
negative for their personal benefit like claiming for refund. It is essential in this situation for a
company to control these activities but there is no control of a business over these EWOM.

Difficult to measure: It is difficult to measure authenticity of a review of a customers
while making decision related to purchase of products and service. It create confusion for
customers while making decision and sometimes also misguide them. It create problems for
potential buyer of products and service.
Opportunity for using EWOM:
EWOM can be stays on interest for a long period of time and can be seen by customer as
well as other companies and competitors. It provide opportunity to companies as it allow them to
monitor as well as analysing buzz on interest that is important for them to identify what is feel by
potential as well as existing customers (Septianto and Chiew, 2018). These feedback can be
negative and provide good opportunity to them for purpose of intensifying mistakes and also to
make improvement in products. There are various companies who are using digital marketing but
does not have any tracking of third part on their websites. If these companies have tracking of
third part they are still making mistakes in order to read data in a right manner and also does not
allow them to take right decision.
EWOM provide opportunity to company to create buzz about their product which
creating and developing marketing campaign in a right manner which helps to get response from
people. It helps them for monitoring and analysing image of buzz and also to use data in order to
improve products and service of company (Sijoria, Mukherjee and Datta, 2019). With presenting
products and service at online platform, company can create influence over present and potential
customers. EWOM allow them to provide quick response with commenting which increase faith
of other people. It create and provide more control for customers.
Connectivism: A Learning Theory for the Digital Age
Connectivism is one of theory which is related to learner that is linked with cognitive
practices and allow user for purpose of acquiring knowledge through study, experience as well as
receiving instruction. It allow a person to incorporate electronic devices for purpose of off-site
storage of information, treating role of memory differently prior to learning theories. It is a
theory that is permitted to technology for purpose of becoming part of internal learning process
of student (Connectivism: A Learning Theory for the Digital Age, 2018). There are various old
theory of learning which are related communicant for a knowledge, instruction and also allow
them to embrace for connectivism and also improving knowledge of a person. It is a theory

which consist sharing of information and knowledge and other things with use of digital
platform.
This theory can be sued by business in retail industry where they can use it for purpose of
providing information related to products. It is important as it includes use of digital technology
for purpose of sharing information. There is increasing trend of technology in competitive world
that increase demand of technology in business (Yang, Park and Hu, 2018). This technology play
important role in growth and success of business as it reduce their cost and also increase
effectiveness of function of business. Companies are using technology for purpose of marketing
of products and service which increase awareness of their products and also increase their reach.
EWOM is an approach used by business that provide platform to customers to share their honest
review of products and service which can be useful for other customers while making decision
related to purchase of products and service.
CONCLUSION
From above mentioned project report, it can be concluded that EWOM is one of
important component for business as it create influence over customers. It is important as it allow
customers to provide their review on online platform about a product or a company which can be
seen by other people. It assist and guide other people while using that products and motivate
them to buy a product. Customers is more depended on information while making decision and
these information can be obtained from different source like friends, family and other online
platform. These platform provide authentic and useful information to customers. It provide
various advantage and disadvantage for a company. It create positive image of company and
increase their reach. It allow company to understand requirement and complainants of customers
related to products and also allow them to make necessary correction.

REFERENCES
Books and Journals
Chang, J.H. and Wang, S.H., 2019. Different levels of destination expectation: The effects of
online advertising and electronic word-of-mouth. Telematics and Informatics, 36,
pp.27-38.
Chu, S.C. and Chen, H.T., 2019. Impact of consumers' corporate social responsibility‐related
activities in social media on brand attitude, electronic word‐of‐mouth intention, and
purchase intention: A study of Chinese consumer behavior. Journal of Consumer
Behaviour, 18(6), pp.453-462.
Chu, S.C. and Kim, J., 2018. The current state of knowledge on electronic word-of-mouth in
advertising research. International Journal of Advertising, 37(1), pp.1-13.
García-de los Salmones, M., Herrero, A. and Martínez, P., 2021. Determinants of electronic
word-of-mouth on social networking sites about negative news on CSR. Journal of
Business Ethics, 171(3), pp.583-597.
Hwang, K. and Zhang, Q., 2018. Influence of parasocial relationship between digital celebrities
and their followers on followers’ purchase and electronic word-of-mouth intentions, and
persuasion knowledge. Computers in Human Behavior, 87, pp.155-173.
Krishnamurthy, A. and Kumar, S.R., 2018. Electronic word-of-mouth and the brand image:
Exploring the moderating role of involvement through a consumer expectations
lens. Journal of Retailing and Consumer Services, 43, pp.149-156.
Loureiro, S.M.C., Gorgus, T. and Kaufmann, H.R., 2017. Antecedents and outcomes of online
brand engagement: The role of brand love on enhancing electronic-word-of-
mouth. Online Information Review.
Septianto, F. and Chiew, T.M., 2018. The effects of different, discrete positive emotions on
electronic word-of-mouth. Journal of Retailing and Consumer Services, 44, pp.1-10.
Sijoria, C., Mukherjee, S. and Datta, B., 2019. Impact of the antecedents of electronic word of
mouth on consumer based brand equity: a study on the hotel industry. Journal of
Hospitality Marketing & Management, 28(1), pp.1-27.
Yang, Y., Park, S. and Hu, X., 2018. Electronic word of mouth and hotel performance: A meta-
analysis. Tourism management, 67, pp.248-260.
Online
Electronic Word-of-Mouth (eWOM) Marketing, 2016. [Online], Available through:
<https://blogs.brighton.ac.uk/plablog/2016/04/18/electronic-word-of-mouth-ewom-
marketing/>
The Importance of Electronic Word-of-Mouth Marketing, 2022. [Online], Available through:
<https://www.learnworlds.com/the-importance-of-word-of-mouth-marketing/>
Electronic Word-of-Mouth (eWOM) Marketing, 2016. [Online], Available through:
<https://blogs.brighton.ac.uk/plablog/2016/04/18/electronic-word-of-mouth-ewom-
marketing/>

Connectivism: A Learning Theory for the Digital Age, 2018. [Online], Available through:
<https://focusedusolutions.com/2018/12/22/connectivism/>