Online Reviews and customers' purchasing decisions: Why it should matter in Nigeria's automobile market

4. 8. 2021
Štítky

The use of digital technologies in the marketplace continues to inspire diverse customer experiences. Consumers can now utilise the ubiquitous e-commerce platforms and the ever-increasing social media influence to critically spotlight a brand's products and services using consumer reviews and ratings. This, in turn, informed this paper especially as it relates to the potential benefits consumers’ online reviews can bring to Nigeria's automobile dealership. This paper was exploratory in its context as the intention is to present outcomes that can be replicated in Nigeria's automobile sector. While e-commerce has expanded in Nigeria, the use of online customers’ reviews as a vital component of marketing strategies remains low and this is even less so in the automobile sector. Thus, this paper concluded by presenting the usefulness customers online reviews can bring to the robust marketing offerings of car dealerships in Nigeria's automobile sector.

Introduction

The marketplace has evolved significantly with digitisation accelerating the increasing deployment of cross-channel strategies by businesses to stimulate and improve their customer's experiences. This has given much leverage to the utilisation of digitization to render customer-centric product and service information to a vast consumer audience in an agile and seamless way (Charlton, 2015; Ghasemaghaei, Eslami, Deal, & Hassanein, 2018). Accordingly, businesses seeking to stay competitive and also outperform competitors are creating multichannel customer engagement encompassing physical and virtual environments (Weathers, Swain, & Grover, 2015). Thus, even as the consumer decision journey becomes increasingly influenced by the internet of things and big data analytics, multiplatform marketing efforts may need to be pursued and sustained. This is because the customer journey has become sophisticated and businesses will be more relevant if they can effectively manage the interaction points across multiple channels by taking advantage of the speed of digitisation (Purnawirawan, Pelsmacker, & Dens, 2012).

Therefore, the ability of a business to attract and retain its customers in an increasingly competitive marketplace is vital to boosting and sustaining revenue generation. The negative impact of customer defection, lost sales and weak brand image on organizational wellbeing is not in doubt devastating and constitutes a reality a business does not want to experience (Jia, & Liu, 2018). However, this negative scenario has been the experience of many businesses who have perhaps taken for granted the customer experience. This is in contrast with businesses that continuously stimulate the customer journey with experiences that increases customer satisfaction, and in turn, improves sales and retention, lower end-to-end service cost, and bolster the company’s overall customer satisfaction metrics (Willemsen, Neijens, Bronner, & De Ridder, 2011).

The place of market research data is crucial to quickly address poor service and treatment of customers over time. Thus, the use of online reviews to create a synergistic relationship between a business entity and its customers may be effective in ensuring a better customer experience. As such, this paper seeks to present the potential benefits of online reviews as competitive research data that vehicle dealerships in Nigeria can leverage to boost market performance. In turn, the paper comprises theoretical underpinning, the dynamics of consumers’ online reviews, a brief overview of Nigeria's consumers’ online review, the potential benefits online reviews can offer and conclusion.

 Theoretical Foundation

The technology acceptance model (TAM) is employed to underscore the relevance of consumer online reviews in an increasingly ubiquitous online marketplace. TAM as an information technology theory focuses on users’ acceptance or adoption of new technologies which often than not is motivated by the relative ease of using them and the usefulness they offer to the end-users (Wu, Chen, Chen, & Cheng, 2014). Thus, an individual will be willing to adopt new technology when it is easy to use and valuable at the same time. Therefore, the TAM suggests that the perceived ease of use (PEU) and the perceived usefulness (PU) of technology represent the primary factors that stimulate the behavioural intention of the user to demonstrate acceptance (Davis, 1989). The relative ease of using e-commerce and the benefits of flexibility and variety it brings to the consumer continue to elicit its widespread adoption (Yang, Sarathy, & Lee, 2016). Perhaps, the TAM can explain the growing influence of consumers’ online reviews as more businesses adopt an online marketplace. This is as a significant number of consumers rely on online reviews for price, aesthetic and product/service quality comparisons or to make an informed decision before making a purchase (Zhao, & Cui, 2015).

Online Reviews

As e-commerce gain even more significant momentum in the marketplace, consumers are more than before leveraging online search such as consumers' products reviews to decide before purchasing new products and services (Wu, et al, 2014). Thus, it may be inferred that consumers are increasingly accepting online reviews as a vital source of product or service information. The digital space continues to represent a framework with a considerable impact on big data including ample consumer data (Ghasemaghaei, et al, 2018).

Consumers' reviews describe the feedbacks they provide after consuming a product or service sold by a company (Weathers, Swain, & Grover, 2015). Thus, consumers, online reviews represent the feedback they provide across different digital channels which includes the company's website, social media platforms and other independent platforms offering the review of products and services (Aragoncillo, & Orus, 2018). Therefore, consumer online reviews have become widely recognized especially as they can be viewed across the world even in real-time (Charlton, 2015). According to the studies of Yang, Sarathy, & Lee, (2016) and Jia, & Liu, (2018) indicated that online reviews are capable of influencing consumers' purchasing behaviour and preferences, as well as perceptions regarding the products and services. This is because often than not when consumers review a product or service, they also rate its quality, durability or price (Zhang, Zhao, Cheung, & Lee, 2014).

In a meta-analytic study conducted by Weathers, Swain, & Grover, (2015), the findings suggest that the predominant pattern of consumers’ reviews can influence sales and attitudes. As such, more positive reviews boost sales and attitudes, while more negative reviews decrease sales and increase negative attitude to a brand (Zhao, & Cui, 2015). Thus, customers, online reviews have become one of the critical sources of brand competitiveness (Aragoncillo, & Orus, 2018). A review exposure can be far-reaching especially when it is done by notable personalities or on platforms deemed authoritative. While both positive and negative reviews are significantly important to market competitiveness, negative reviews are more impactful on consumers’ attitudes and purchasing decisions (Purnawirawan, et al. 2012).

This is because negative reviews tend to have a decisive effect on consumers' attitudes and suggesting they carry more influence than positive reviews (Jia, & Liu, 2018) and this resonates with the findings of (Yang, Sarathy, & Lee, 2016) which indicates that negative reviews even when they are few can still be damaging to a brand. However, the study conducted by Zhao, & Cui, (2015) contends that hedonic goods and services are more negatively impacted by negative consumer reviews than utilitarian or functional goods and services.

This may not be discounted from the emotional context of hedonic goods and services rarely present in functional or utilitarian goods and services purchased by the everyday consumer. Wu, et al, (2014) made an argument that may be compelling when the researchers argue that negative online consumers reviews receive more mileage than positive reviews because negative reviews are considered as a more useful source of information that can help the consumer make an informed purchasing decision. However, it may be argued that since the consumer purchasing behaviour respond to different stimuli, both positive and negative reviews will influence the consumer one way or the other (Ghasemaghaei, et al, 2018). Again, it has been argued that aside from the prevailing patterns of the review, the information they convey matters to the intending consumers (Jia, & Liu, 2018). This is because consumers' online reviews and ratings have significant consequences on consumers purchasing decisions important (Aragoncillo, & Orus, 2018).

Also, consumers’ online reviews consist of both heuristic and systematic features. The heuristic features illustrate components such as price and average star rating, whereas, the systematic components describes product quality, aesthetic and other descriptive features (Yang, Sarathy, & Lee, 2016). The consumer may decide to focus only on the heuristic features that are quick to digest or only on the systematic features that require a more focused approach to digest. Again, the consumer may focus on both heuristic and systematic features of a product or service reviews (Yin (Zhang, et al, 2014). Thus, online reviews present the most accessible word of mouth (WOM) product or brand information and maintaining a positive online reputation has become critical to businesses seeking to leverage the internet of things to boost competitive advantage and the customer experience in a dynamic marketplace (Weathers, Swain, & Grover, 2015).

Online Reviews: Nigeria's Experience

Nigeria has a thriving e-commerce market that is poised for significant growth as internet penetration in the country becomes even more widespread. Notable e-commerce platforms such as Jumia, Konga and Jiji have gained prominence in recent years for their significant number of users (Ayo, et al, 2011; Olusoji, et al, 2015).

Nigeria's automobile sector has also seen the increasing use of e-commerce with Autochek, Betacar, Cars45 and Naijauto amongst becoming a vital market for used cars. However, new automobile dealerships in Nigeria have no significant e-commerce presence like the used cars dealerships. In the same vein, consumer online reviews amongst Nigeria's e-commerce have not been investigated for their impact on consumers purchasing decisions. In the automobile sector, the used car e-commerce platforms have consumer reviews in the drop-down menu. However, the new car e-commerce market has no significant customers review portfolio on their websites. A visit to the websites of Nigeria's biggest new car dealerships RT Brisco Motors, Elizade Motors, Coscharis Motors, and Lanre Shittu Motors did not indicate any robust customer reviews portfolio. While these car dealerships have customer care units to respond to customers e-mail and phone inquiries, customer reviews are rarely amplified. However, Lanre Shittu Motors has a chatbot that responds to customers' inquiries 24hrs and 7days a week. The company also has an active Facebook page which is perhaps its only platform with customers’ reviews. While it may be argued that Nigeria's e-commerce sector does not possess the sophistication as seen in high-income countries (HICs) where consumer online reviews have been indicated to be significant to the consumers, Nigeria's vehicle dealerships can achieve even more robust customer engagement by encouraging considerable online reviews.

Conclusion

Customer online reviews represent a vital source of big data that businesses continue to leverage using data analytics to better respond to their customer needs (Aragoncillo, & Orus, 2018). In HICs, car dealerships have a vast online presence whereby customers’ reviews play a significant role in the customer purchasing decision. The online marketplace will continue to expand and more customers will rely on customer reviews to guide their purchase of goods and services Ghasemaghaei, et al, 2018). This also applies to the automobile market where customers are increasingly seeking information to guide their first vehicle purchase or to replace their old cars with new cars. Customers reviews have become this vital source of information and Nigeria's automobile dealerships can better serve their existing and new customers using this crucial source of customers’ data.

However, Nigeria's car dealerships will need to improve their online customer interactions to generate text-based data in the form of customers’ reviews that potential customers can utilize. Customers should be able to access previous customers’ reviews when they visit the websites of the car dealerships. It is important to state that customers’ reviews are also manipulated by brands to influence customer behaviour (Jia, & Liu, 2018); as such, Nigeria’s car dealerships will need to demonstrate transparency with their customers' reviews.

Negative customers’ reviews can serve the purpose of customer improvement if thoroughly addressed by a company. Thus, the marketing and sales units of Nigeria's car dealerships should put in place mechanisms to harvest customers' online reviews as part of their business process improvements. The benefits to brand development and customer satisfaction can be huge; as such, it needs to be exploited for its growth potentials.

Author: EGUAIKHIDE A. OLORUNFEMI

Bibliography (standard format of citations according to international standards):

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Ayo, C.K.,  Adewoye,  J.O. & Oni,  A.A.  (2011). Business-to-consumer e-commerce in Nigeria:  Prospects and challenges.  African Journal of Business Management, 5, 5109-5117.

Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13, 3, 318–340.

Charlton, G. 2015. Ecommerce consumer reviews: Why you need them and how to use them. https://econsultancy.com/blog/9366-ecommerce-consumer-reviews-why-you-need-them-and-how-to-use-them

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