Thumbs Up, Sales Up? The Contingent Effect of Facebook Likes on Sales Performance in Social Commerce

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In this study we investigate whether social reference systems, such as Facebook "likes" (FBLs), promote sales in social commerce, wherein adverse selection and quality uncertainty often severely damage consumer trust and impede efforts to achieve sustainable growth. We also examine the extent to which product characteristics (product uncertainty and product franchising) and deal characteristics (tipping points, discount rates, and deal durations) moderate the social selling stimulated by FBLs. On the basis of 1,327 samples collected from a major social commerce platform provider, we identify several interesting empirical regularities regarding the relationship between FBLs and social commerce sales. The findings suggest that FBLs drive traffic and increase sales. Information technology artifacts and social technologies, such as FBLs, can endow a consumer's shopping experience with a socialization component and induce social selling in collective buying platforms. Nevertheless, significant variations occur across products and deals. For example, consumers who purchase experience goods more frequently depend on FBLs than do those who buy search goods. FBLs exert a far greater influence on the sales of goods from independent stores than those from franchise chains. Social commerce consumers are unaffected by heavy discount rates as they make purchase decisions, but they extensively rely on FBLs, particularly when purchasing products that have low tipping points. Our results suggest that social commerce can be a powerful marketplace when the economic utility that is driven by price incentives is further strengthened and protected by the social utility that originates from trust and sharing.
Publisher
ROUTLEDGE JOURNALS
Issue Date
2015
Language
English
Article Type
Article
Keywords

WORD-OF-MOUTH; ONLINE PRODUCT REVIEWS; ELECTRONIC MARKETS; EMPIRICAL-ANALYSIS; EXPERIENCE GOODS; PROPENSITY SCORE; CONSUMER REVIEWS; BEHAVIOR; PRICE; UNCERTAINTY

Citation

JOURNAL OF MANAGEMENT INFORMATION SYSTEMS, v.32, no.4, pp.109 - 143

ISSN
0742-1222
DOI
10.1080/07421222.2015.1138372
URI
http://hdl.handle.net/10203/208516
Appears in Collection
MT-Journal Papers(저널논문)
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