How Do Consumers Evaluate Identical Products at Different Retailers? A Text Mining Approach Using Product Reviews

Abstract

We examine consumers’ evaluations of identical products at different types of retailers using Amazon’s launch of its fashion division. Drawing on product reviews of brand items carried by Amazon (the general merchandise online retailer) and Macy’s (the traditional fashion-oriented department store), we compare the topics in the reviews as important product attributes of consumer evaluations and examine the effects of these topics on ratings. We show that the product topics mentioned for identical products are generally different between Amazon and Macy’s in terms of their proportions and tone. Also, the different topics discussed at the retailers lead to different ratings, with lower evaluations for Amazon. By demonstrating the significant characteristics of the retailers, we provide managers with insights on developing and maintaining competitive advantages for the general retailer and specialty retailers.