Social interaction-based consumer decision-making model in social commerce: The role of word of mouth and observational learning

Abstract

Social commerce mediated by social media and social network platforms has led to the development of new business models in e-commerce and digitized the consumer decision journey. Social interaction is considered as a prerequisite for successful social commerce since consumers now expect an interactive and social experience while making purchase decisions. Drawing on word of mouth (WOM) and observational learning theories, we conceptualize social interactions in social commerce environments into two forms: WOM communication and observing other consumers’ purchases, and examine their impact on consumer purchase intention and actual purchase behavior. Analyzing primary data (n=217) collected from surveyed active consumers within social commerce sites at two stages (pre-purchase and post-purchase), we found that positive and negative valence WOM, WOM content, and observing other consumers’ purchases significantly affect consumers’ intention to buy a product, thereby increasing the likelihood of actual buying and sharing product information with others on social commerce sites.