A study of the effect of social shopping deals on online reviews

The purpose of this paper is to investigate social shopping deals and their impacts on review metrics at an online review site, Yelp and to compare the review metrics of the restaurant businesses and the health and wellness businesses to understand how social shopping deals affects them.

This study adopts a multiple regression model to analyse the effect of seven independent variables on the dependent variable, the growth rate of reviews which is a proxy of sales growth. This sample consisted of the review data of 134 merchants which offered social shopping deals at Groupon in 2011. The online review data of these merchants were collected in 2015 to analyse the relationship between the deals and the grow rate of the reviews.

For the restaurant businesses, there is a positive persuasive effect of Groupon customers’ review score on the growth rate of the reviews and consequently on the sale growth. For the health and wellness businesses, there are a positive persuasive effect of the regular customers’ review score on the growth rate of the reviews and a negative awareness effect of the number of Groupon reviews on the growth rate of the reviews. The review data also show that the Groupon customers of the health and wellness businesses are three times more likely to post their reviews than those of the restaurant businesses.

First, while the author limited the study to the seven independent variables, additional variables may exist. These additional variables may also influence the number of reviews, too. Future research needs to identify such variables to build a comprehensive model. Second, future research needs to address other types of businesses, such as education and entertainment, and compare differences between them. Third, while the study focussed on the review score and the number of reviews, a more in-depth analysis of the comments using sentiment analysis and social network analysis may shed additional insights on their review activities.

Despite the potential significance of customers’ reviews about social shopping deals, the critical mass of empirical studies still lacks in this area. The study contributes to the literature of this field by investigating the effect of social shopping deals on the customers’ online reviews. This study provides practical guidance for the improvement of online reviews about social shopping deals.