The Impact of Observational Learning and Electronic Word of Mouth on Consumer Purchase Decisions: The Moderating Role of Consumer Expertise and Consumer Involvement

Abstract

The social media revolution has created a dynamic shift in the digital marketing landscape. The voice of influence is moving from traditional marketers towards consumers through online social interactions. In this study, we focus on two types of online social interactions, namely, electronic word of mouth (eWOM) and observational learning (OL), and explore how they influence consumer purchase decisions. We also examine how receiver characteristics, consumer expertise and consumer involvement, moderate consumer purchase decision process. Analyzing panel data collected from a popular online beauty forum, we found that consumer purchase decisions are influenced by their online social interactions with others and that action-based OL information is more influential than opinion-based eWOM. Further, our results show that both consumer expertise and consumer involvement play an important moderating role, albeit in opposite direction: Whereas consumer expertise exerts a negative moderating effect, consumer involvement is found to have a positive moderating effect. The study makes important contributions to research and practice.