The growth of rental proptech: hybridisation and data risk

By Thomas Wainwright

What’s the issue?

UK homeownership rates peaked in 2003 at 70.9%, before falling to 63.9% in 20181. A combination of precarious work, stagnant pay and increasing property prices have seen more households find themselves within the private rental sector (PRS). In contrast to other countries, the UK’s rental market is fragmented, consisting of many small scale landlords and a smaller, but increasing proportion of institutional landlords. For example, MHCLG’s last private landlord survey in 2018 revealed that 45% of private landlords in England own just one property, with 38% owning between 2-4 properties2. While the PRS remains an important part of UK accommodation provision, it has faced criticism, focussing on ‘rogue’ landlords, unprofessional management and high costs, partly resulting in the Tenant Fees Act (2019), which banned tenant fees3 and inadvertently boosted demand for rental proptech – to which we will return later. Further calls have been made for mandatory landlord registration to combat issues concerning low quality accommodation4 and while demand for PRS accommodation continues, so will calls for change. One set of actors responding to these calls are the entrepreneurs behind rental proptech platforms who are seeking to disrupt and re-shape the PRS for renters, landlords and letting agents.

What’s going on?

Property technology, or proptech, refers broadly to a diverse range of new entrepreneurial start-ups that focus on the increased use of data, interconnectivity, automation, and technologies such as artificial intelligence (AI), algorithms and blockchain, to solve a variety of issues related to property management. As a sub-sector, rental proptech focusses exclusively on – unsurprisingly – the rental sector.

Rental proptech has grown rapidly since the 2008 GFC. The start-ups are diverse, but generally seek to digitally mediate the relationship between landlords, tenants, letting agents and other suppliers, capturing fees and access to new sources of data for marketing, analysis, and to calculate risk. Rental proptech seeks to make the market easier to navigate for tenants. For example, making it easier to remotely book and undertake viewings, or to manage the check-in and out of property through apps, rather than a series of paper forms. Some platforms provide added transparency too, seeking to bar ‘rogue’ landlords and to reward outstanding landlords with greater market visibility and ratings. Landlords are able to access a broader market of renters through online-only letting agents, for example, cutting costs and enabling them to self-service administrative work through automated technology. For letting agents, the technology has also removed much of the administrative back office work. For some, this has been a lifesaver, following the Tenant Fees Act and the loss of application fees, as it enabled high-street agents to adopt rental proptech and to automate their processes, cutting costs.

The UK’s proptech market is arguably world-leading, given the scale of its creativity and innovation, with access to venture capital funds providing considerable potential for growth. In mediating relationships between letting agents and tenants, for example, rental proptech platforms have the opportunity to charge fees and profit from both types of client in this multi-sided market, while cross-selling other products and earning commissions. While tenancy durations vary across different markets within the UK, estimates suggest households stay at a property on average between 18 months5 and 4.1 years6. Towards the shorter end of tenancies, this mobility or churn creates more regular revenue earning opportunities, when compared to property sales, for example.

Given the size of the PRS and its fragmentation, there are opportunities to structure and organise the market through these platforms. In recognising the potential of rental proptech, considerable flows of investment are moving into the sector fuelling its growth, with specialist investment from Pi Labs, Round Hill Ventures and A/O Proptech, for example, with many deals detailed on Unissu.

Digital disruption in the PRS

Rental proptech start-ups are diverse. For example, they include apps that seek to compete with and directly challenge high-street letting agents (Howsy), digital management for letting agents (AskPorter), provide regulatory and compliance support for landlords (Kamma), tenant bill splitting (The Bunch), digital referencing and passporting (Goodlord) and managing the departure of tenants and return of their deposits (The Depositary).

In curating multi-sided markets, rental proptech promises solutions to all parties. Lower costs for landlords, which can mitigate pressures from tax changes regarding SDLT and mortgage interest tax relief. Rental proptech has enabled letting agents to reduce their administrative workload, enabling them to focus their efforts and time on negotiating tenancies and finding new business. For small and medium-sized agencies who simply do not have the capacity to develop their own in-house tech solutions, refocussing their business and outsourcing routine time-consuming tasks provides a considerable benefit.

Renters are able to benefit from a series of improvements, focussed mainly on convenience, For example, through automated check-in and out processes on their phone including deposit reclaim, setting-up and splitting utility bills, and reassurance on some platforms that landlords have been more thoroughly vetted. While rental proptech has not made renting directly cheaper for tenants, following the Tenant Fee Act, in using proptech to reduce costs, this has, in some cases, mitigated the need for agents to increase management fees for landlords, which in turn would be passed into tenants in the form of higher rents.

Sector maturity, hybridisation and consolidation

Rental proptech businesses initially could be seen as pure disruptors to the PRS, seeking to act as direct competitors to high-street estate agents. However, as highlighted above, they are increasingly partnering with established high-street agents, seeing the latter become hybridised – not proptech agencies, but increasingly heavier uses of data-driven tech. Routine and unprofitable functions are being unbundled from agency business models, replaced with rental proptech as it enters the mainstream.

The market is also beginning to consolidate. While rental proptech began with businesses focussing on one problem or difficulty in the PRS, as identified or experienced by the venture teams, they have begun to diversify their product offering. First, to develop additional revenues, for example, through AI driven tenant management or digital referencing, but also as the rental proptech sector focusses on convenience and ease of use. Using several different products from several different firms each with a particular focus is not convenient to clients. As such, rental proptech start-up product portfolios have begun to increasingly overlap, leading to greater competition.

This has seen the development of mergers and acquisitions in the sector. For example, Goodlord acquired Vouch in 2020 to gain tenant referencing capabilities and Acasa in 2021 to gain its tenant bill splitting applications7. Partnerships will no doubt become more important, but the result in the foreseeable future may well be a smaller number of larger and more comprehensive rental proptech firms seeking to cover all parts of the rental value chain. As they provide more comprehensive solutions to high-street agents, the latter may be hollowed out further to focus exclusively on relationship management as hybridisation becomes the norm. While Rightmove and Zoopla may be the property search engines of the sector, new competitors may well come to dominate the market, but in servicing a digital PRS and facilitating the moves of renters.

Emerging digital risks

Rental proptech is underpinned by the novel use of new technologies. However, this raises a series of new risks and issues that could impact on businesses, tenants and the wider market. These risks should be considered, and where necessary, mitigated. As start-ups expand for survival, they focus on client acquisition and revenue growth and it is unsurprising that data risks are not fully considered. From the research, some key risks are apparent – their mitigations are examined in more detail in the accompanying ‘think piece’ [here].

Rental proptech is drawing on ever more detailed personal data through APIs, particularly through open banking. Some of the ways in which this data could be used poses ethical questions, particularly if it could lead to discrimination against particular groups of renters, even if this is unintentional. Not only does this pose ethical risks against tenants, but also reputational and revenue risks that can affect specific businesses, and the broader sector. Just because data is available for use, does not necessarily mean it should be used without thorough justification and an assessment of its potential impacts.

This can also extend to data that renters may self-input. Using apps, tenants can be encouraged to provide more data than perhaps they would provide on paper forms, as the processes is much easier. However, tenants may not fully understand how the data will be used, and may not be comfortable with its function if they knew. More transparency is needed over why data is required, as while consent may be given, it may not necessarily be fully informed.

There are also emerging issues of data equity. For example, some types of data sources may be used in algorithms, which is not available for all renters. For instance, some local authorities provide data on noise complaints in tenant referencing, but not all. This creates a data asymmetry in that some tenants, using a nation-wide rental proptech platform, may be penalised, while others are not, based on the availability/absence of data, rather than actual activity.

Moving from data and turning to the analytical technologies, AI is known for replicating racism, sexism and ableism, based on biases within the data from which they learn8. While this reflects discrimination and bias within society, decisions made using flawed AI can reinforce, replicate and expand discrimination. Similarly, the design of algorithms can encode and replicate unintended results that reinforce discrimination. This creates substantial ethical issues that translate into business risk. While the discrimination may be unintentional, flawed technology can be problematic if left unchecked.

Finally, rental proptech platforms often appear to focus on a particular target market, often of young, urban, professional and mobile renters. While this issue is not technological in itself, products are designed around the needs of these particular renters, which may exclude other types of renter, or may accommodate their needs less effectively. As rental proptech continues to expand and be adopted by more high-street agents, it may be at the detriment of different renter demographics. As such, further work needs to be undertaken to understand how rental proptech affects, is used and adopted by different renter types.

What next – new opportunities?

So far, rental proptech start-ups are focussing on working with smaller landlords and letting agents within the UK’s PRS ecosystem. It’s likely that this trend will continue, with the technology becoming more mainstream amongst high-street agents. Potential opportunities may emerge through coordinated M&A activity to create more full-service rental proptech groups. This could be driven by venture capital funding, or by larger national agencies seeking to develop their own tech platforms and move further into the digital space.

Rental proptech activity is currently limited in the institutional build-to-rent (BTR) sector. However, the BTR arms of pension funds and vertically integrated developers are growing. In addition to housing associations, these landlords could prove to be a new market. The operations of institutional investors are driven by interest around yield. To date, there appears to have been limited interest in rental proptech by institutional BTR sector as is not seen as being able to add sufficient value to the rental experience, or in cutting operational costs, to increase yields. It may be that rental proptech is introduced to these landlords through managing agents and facilities managers, rather than by the landlords themselves.

In the US, proptech has been used to streamline the valuation, surveying, acquisition and management of single family home rentals, to be bundled directly into private equity-backed investment portfolios. Proptech is used to manage asset maintenance, but to also outsource management work from agents and landlords onto tenants using technology, to reduce costs further. While these models and practices have not yet emerged in the UK, existing rental proptech technologies may be deployed for new uses.

As highlighted earlier, while the propositions of rental proptech have the potential to disrupt and enhance the PRS, driving convenience, efficiency and profitability, risks surrounding the use of data at the centre of these technologies remain. These risks need to be considered carefully by the sector and some suggestions and mitigations are outlined in the associated think piece.

Further information

Methodology: The data collected to underpin this research project consisted of expert interviews with 30 prominent actors within the UK’s rental proptech and real estate sector. This was supported through secondary resources and publically available materials.

Resources: RED think piece – What could a Tenant Data Charter look like in the rental proptech sector?

Funding: British Academy – Tackling the UK’s International Challenges

Acknowledgements: Comments from reviewers are much appreciated in clarifying and augmenting the key points raised in earlier drafts

Dr Thomas Wainwright is Reader in Strategy and Entrepreneurship. Tom completed his first degree at the University of Leicester and holds an MSc from the University of Nottingham. He completed his ESRC funded PhD in 2009 (University of Nottingham) where he investigated the development of new strategies and innovations in the financial services sector. Tom then worked at the University of Nottingham on projects that examined wholesale-retail bank linkages and wealth management. In 2010, he began a Postdoctoral Fellowship in the Small Business Research Centre at Kingston University, where he worked on consultancy projects for Barclays Bank and other stakeholders, such as Eurofound. Tom joined the University of Southampton in 2012 and became Senior Lecturer in 2014, before becoming Associate Professor and Director of the Centre for Innovation and Enterprise.

Footnotes

[1] https://www.brookings.edu/essay/uk-rental-housing-markets/

[2] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/775002/EPLS_main_report.pdf

[3] https://www.gov.uk/government/collections/tenant-fees-act

[4] https://www.landlordtoday.co.uk/breaking-news/2020/10/mandatory-landlord-register-is-latest-goal-for-generation-rent-activists

[5] https://www.estateagenttoday.co.uk/estate-and-letting-agent-discussions/2016/5/how-long-does-the-average-tenancy-last

[6] https://www.lettingagenttoday.co.uk/breaking-news/2019/1/tenants-stay-an-average-4-1-years-says-governments-own-figures

[7] https://www.altfi.com/article/8407_rising-proptech-star-goodlord-makes-second-acquisition-with-acasa

[8] https://www.brookings.edu/research/detecting-and-mitigating-bias-in-natural-language-processing/#:~:text=Unsupervised%20artificial%20intelligence%20(AI)%20models,racism%2C%20sexism%2C%20and%20ableism.&text=Billions%20of%20people%20using%20the,exposed%20to%20biased%20word%20embeddings

Crafting IT jobs through the Flexibility of Contracting: Opportunities for Female IT Professionals

By Niki Panteli

In a recently published study (Panteli and Urquhart, 2022),  we explore the job crafting experiences of women who left permanent employment for contracting positions in Information Technology (IT),  a sector widely considered male-dominated with limited career opportunities for women.  This qualitative study is based on interviews with 24 female IT contractors. Findings show that through the flexibility and autonomy that comes with contracting, numerous crafting practices are adopted by female IT contractors enabling them to gain empowerment in a male-dominated environment.  The study contributes in depth understanding of job crafting theory by showing a reflexive relationship between role and resource crafting for women in alternative forms of employment,  especially those with a high degree of autonomy.  By engaging directly with the experiences of these women IT contractors, we provide unique insights into what might drive women into IT contracting, and why they often stay with this option owing to the freedom and autonomy offered.  

The Infographic below captures the key findings of the study. Further Information can be found in:
Panteli N. and Urquhart C. (2022), Job Crafting among Female Contractors in a Male dominated Environment, New Technology, Work and Employment, 37, 1, 102-123, http://doi.org/10.1111/ntwe.12210

Niki Panteli (PhD) is a Professor of Digital Business at the School of Business and Management, Department of Digital Innovation and Management & co-Director of DOS (Digital Organisations and Society) Research Centre at Royal Holloway, University of London. She can be contacted by email: niki.panteli@rhul.ac.uk

Consumer interactions with artificial intelligence – enabled chatbots in retail shopping experiences

By Xiaoxia Cao

Supervisors:   Dr Nisreen Ameen and Professor Chris Hackley
Royal Holloway, University of London

Companies are increasingly relying on artificial intelligence to automate marketing tasks. For example, chatbots are frequently mentioned to be beneficial for the retail industry regarding customer service (about 95%), sales/marketing (about 55%), and order processing (about 48%) (Rese, Ganster and Baier, 2020). “A chatbot is software that simulates human-like conversations with users via text messages on chat” (ChatBot.com, 2021). There are more than 300,000 active chatbots integrated on Facebook Messenger offering customer services (Nealon, 2018). The chatbots market is predicted to reach USD 7.5 billion by 2024 (Peart, 2020). Besides, more than 70% of chatbot conversations are expected to be with retail chatbots by 2023 (Dilmegani, 2020). It is undeniable that the interactions between consumers and AI-enabled chatbots in the retail industry were accessible and convenient, and these interactions will continue to grow in the future. Thus, we need to figure out what consumers gained from previous experiences with AI-enabled chatbots in the retail industry, and what is required further for the long-term relationship between them. Chatbots, once considered as “virtual idiot”, have gained popularity during the COVID-19 pandemic because of their immediacy (Miller, 2020; Ward, 2021). Consumers also became more tolerant of chatbots usage during 2020 (Ward, 2021). Thus, are there other issues we also need to consider when building such a long-term relationship? For example, emotions, privacy, and security issues.

Consumers’ perceptions of retail environments and their shopping behaviour outcomes have been significantly influenced by emotions (Herter, dos Santos and Pinto, 2014). As artificial intelligence technologies improve, digital agents transformed from merely providing information to being emotionally intelligent (Gelbrich, Hagel and Orsingher, 2021). However, the current research on the effects of consumers’ emotions in the interaction with AI-enabled chatbots in retail industry has not been done in depth. It is also unclear that whether the effects of emotions from other digital agents are similar to these AI-enabled chatbots because of their specific functions in the retail industry. Meanwhile, as Mogilner, Kamvar and Asker (2011) examined that participants’ perceptions of positive emotions, such as happiness, change with age. Thus, users of different ages and cultures may interact differently with AI-enabled chatbots.

The combination of artificial intelligence and big data gives retailers the capability to collect and store customer data from multichannel, which can be used to gain insights, and improve their products and customer experiences. While customers are willing to share their personal information in exchange for personalised services, they also express concerns about privacy (Davenport et al., 2020; Okazaki et al., 2020). Another factor that affects consumers’ perception of the online retailing environment is security, which mainly refers to online transactions (Mukherjee and Nath, 2007). Even though the retailers adhere technological solutions and legal guidelines to guarantee security and privacy. Consumers’ perceptions of privacy violations also rely on their knowledge and control (Wang, et al., 2020). In the face of so many ambiguous warnings and complicated advice, security awareness may be ineffective (Bada, Sasse and Nurse, 2019).

In conclusion, this research aims to fill the gap in knowledge on the long-term relationship between AI-enabled chatbots and consumers in the retail industry, and to provide a better understanding of concepts such as emotions, privacy and security in human-chatbots interactions. At present, this research is still at the early stage of the literature review, aims to get a solid understanding of all these concepts related to human-chatbots interactions. I am currently looking for opportunities to work with companies in this area or discuss with academics in the field.

Bio

Xiaoxia Cao
PhD student in Management
MSc International Management (Marketing)
Bachelor of Economics
E-Mail: xiaoxia.cao.2018@live.rhul.ac.uk
LinkedIn: https://www.linkedin.com/in/小霞-曹-bb241a113/

References

Bada, M., Sasse, A. M. and Nurse, J. R. (2019) ‘Cyber security awareness campaigns: Why do they fail to change behaviour?’. Available at: https://arxiv.org/pdf/1901.02672.pdf (Accessed: 14 October 2021).

ChatBot (2021) 2021Chatbot Guide. Available at: https://www.chatbot.com/chatbot-guide/  (Accessed: 6 October 2021).

Davenport, T., Guha, A., Grewal, D. and Bressgott, T. (2020) ‘How artificial intelligence will change the future of marketing’, Journal of the Academy of Marketing Science, 48, pp. 24-42. Available at: https://link.springer.com/content/pdf/10.1007/s11747-019-00696-0.pdf (Accessed: 14 October 2021).

Dilmegani, C. (2020) 85 + Chabot / Conversational AI Statistics: Market Size, Adoption. Available at: https://research.aimultiple.com/chatbot-stats/ (Accessed: 6 October 2021).

Gelbrich, K., Hagel, J. and Orsingher, C. (2021) ‘Emotional support from a digital assistant in technology-mediated services: Effects on customer satisfaction and behavioral persistence’, International Journal of Research in Marketing, 38, pp. 176-193. Available at: https://www.sciencedirect.com/science/article/pii/S0167811620300550 (Accessed: 14 October 2021).

Herter, M. M., dos Santos, C. P. and Pinto, D. C. (2014) ‘“Man, I shop like a woman!” The effects of gender and emotions on consumer shopping behaviour outcomes’, International Journal of Retail & Distribution Management, 42 (9), pp. 780-804. Available at: https://www.emerald.com/insight/content/doi/10.1108/IJRDM-03-2013-0066/full/pdf?title=man-i-shop-like-a-woman-the-effects-of-gender-and-emotions-on-consumer-shopping-behaviour-outcomes (Accessed: 14 October 2021).

Miller, E. (2020) How has COVID-19 Accelerated Trends in Customer Service? Available at: https://innovationmanagement.se/2020/10/26/how-has-covid-19-accelerated-trends-in-customer-service/ (Accessed: 14 October 2021).

Mogilner, C., Kamvar, S. D. and Asker, J. (2011) ‘The Shifting Meaning of Happiness’, Social Psychological and Personality Science, 2 (4), pp. 395-402. Available at: https://journals.sagepub.com/doi/pdf/10.1177/1948550610393987 (Accessed: 14 October 2021).

Mukherjee, A. and Nath, P. (2007) ‘Role of electronic trust in online retailing: A re-examination of the commitment-trust theory’, European Journal of Marketing, 41 (9-10), pp. 1173-1202. Available at: https://www.emerald.com/insight/content/doi/10.1108/03090560710773390/full/pdf?title=role-of-electronic-trust-in-online-retailing-a-reexamination-of-the-commitmenttrust-theory (Accessed: 14 October 2021).

Nealon, G. (2018) Using Facebook Messenger And Chatbots To Grow Your Audience. Available at: https://www.forbes.com/sites/forbesagencycouncil/2018/06/04/using-facebook-messenger-and-chatbots-to-grow-your-audience/?sh=46c6e485733b (Accessed: 14 October 2021).

Okazaki, S., Eisend, M., Plangger, K., de Ruyter, K. and Grewal, D. (2020) ‘Understanding the Strategic Consequences of Customer Privacy Concerns: A Meta-Analytic Review’, Journal of Retailing, 96 (4), pp. 458-473. Available at: https://www.sciencedirect.com/science/article/pii/S0022435920300361 (Accessed: 14 October 2021).

Peart, A. (2020) Chabot Statistics: 2020 & Beyond. Available at: https://www.linkedin.com/pulse/chatbot-statistics-2020-beyond-andy-peart (Accessed: 6 October 2021).

Rese, A., Ganster, L. and Baier, D. (2020) ‘Chatbots in retailers’ customer communication: How to measure their acceptance?’, Journal of Retailing and Consumer Services, 56, p. 102176. Available at: https://www.sciencedirect.com/science/article/pii/S0969698920308286 (Accessed: 14 October 2021).

Wang, X., Tajvidi, M., Lin, X. and Hajli, N. (2020) ‘Towards an ethical and trustworthy social commerce community for brand value co-creation: A trust-commitment perspective’, Journal of Business Ethics, pp. 137-152. Available at: https://link.springer.com/content/pdf/10.1007/s10551-019-04182-z.pdf (Accessed: 14 October 2021).

Ward, C. (2021) Chatbots after COVID-19: What does the future hold for the ‘virtual idiot’? Available at: https://www.mycustomer.com/service/channels/chatbots-after-covid-19-what-does-the-future-hold-for-the-virtual-idiot (Accessed: 14 October 2021).

Developing a Multi-focal Perspective for the study of Digital Transformation

As researchers within the field of Information Systems, we may bring the individual, organisations and/or societal perspectives to examine specific ICT-related phenomena. In this article, I focus on the emerging phenomenon of Digital Transformation  and argue that this can and should be studied from different perspectives.

I come into this debate with my research interest to understand who is leading Digital Transformation.  With my colleague Dr Jostein Engesmo at the Norwegian University of Science and Technology,  we developed  a newfound interest to understand new leadership roles that have been created as a result of the increased organisational interest in  Digital Transformation programmes.

For this we interviewed Chief Digital Officers (CDOs) across different organisations and industries and  related roles such as Heads of digital, Director of Digital Transformation, Heads of Digital Strategy etc. The study was motivated by a need to understand who has the responsibility for digital transformation, but not only in terms of skills and experience, but more importantly their relation to and influence on the executive board and senior management as well as IT and other functions of their respective organisation. We view CDOs as protagonists for digital transformation in their organisations. As leading figures, CDOs are expected to be on central stage, take decisions and follow these through to their implementation. 

So as you would expect, we brought the view of organisational managers into our study. However,  other choices we made influenced the study and helped in broadening up the theoretical perspective adopted. Though the voice of these digital leaders was important in informing our understanding of Digital Transformation we also took the decision to focus on specific types of organisations. 

Early on in our study we made the conscious decision to distinguish between pre-digital and post-digital organisations recognizing that the latter are born with and often because of digital technologies, but traditional pre-digital organisations (i.e. those that existed prior to the internet revolution) must seek ways of incorporating Digital Transformation into their operations and strategies while overcoming structural and cultural constraints. 

This aspect therefore of our research necessitated a ‘within the organisation’ approach where we sought to explore not just the role and characteristics of the CDO but also the wider transition that pre-digital organisations are going through in order to accommodate this newfound role and how this transition is managed. In our process of exploration, participants talked about their  relationships with CIOs and the IT department and about how the structures of the IT departments had to be modified to accommodate Digital Transformation. We identified four different organisational structures for the IT function in organisations that are undergoing Digital Transformation: one structure depicts the case where Digital Transformation is treated as a project, and this is managed by the IT manager notably the CIO; A second one, where a new digital function is introduced and this is led by the CDO’ this  remains separate to the IT department  which is managed by the CIO. In the third structure,  the IT and digital remain separate but are both integrated within the same wider umbrella what may be called digital function, and finally, a fourth structure where IT and digital are merged and the leader has an integrated title such as the Chief Digital Information Officer.

Despite their differences, these organisational structures collectively confirm the organisational need to adapt the IT function in order to accommodate the need for digital capability when they embrace Digital Transformation and more broadly, the findings contribute to the discourse on the impact of Digital Transformation and how it shapes organisations.

The findings also suggest that ‘digital’ is a nebulous word, associated with vagueness and confusion, and show that organisations go through a learning process in their attempt to unpack the  opportunities of digital transformation for themselves. In doing so, they are rethinking their strategies, structures, digital leadership, skills, digital capabilities and the role of the IT function. These findings contribute to a wider perspective on DIGITAL TRANSFORMATION, one that posits that even though digital has become pervasive, organisations are still going through a process of figuring out how to embrace digitalisation in their business activities and this  falls within the remits of the societal approach.

If I draw on the specific study I presented, I have to acknowledge that the study did not start with a multi-focal perspective. Instead, it was at its initial stage rather single-focused, in terms of what we wanted to examine and the kind of participants we sought to interview, and ultimately what we wanted to get out of the study. This on the outset looks like a limited perspective of a phenomenon that is both multi-dimensional and multifaceted.

Having this narrow focus, gave us the opportunity to be in control which was hugely important based on the resources we had available.  It gave us clarity as to what we were seeking to achieve and helped us to set up a reasonable timeframe for carrying out the study. It also gave us possibilities to access a range of very interesting organisations – some of which we got in touch via LinkedIn without having done any previous work with as we were asking to interview CDOS whilst not knowing much about the organisations they worked with.  In this process however of exploration, we discovered additional themes, in fact more fascinating than the initial question we had. So, we moved from the managerial view to the organisational view, and thereafter towards the societal perspective.  

So my position on how to move towards a multi-focal thinking for the study of Digital Transformation  is that as researchers we have to exhibit and demonstrate adaptability in what we study and allow the numerous possibilities that may come our way to influence our thinking and subsequently our research. It is fine to start small and single-focused. It is where you go from there that matters, and that perhaps is the way to a multifocal thinking.

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Niki Panteli (PhD) is a Professor of Digital Business at the School of Business and Management, Department of Digital Innovation and Management & co-Director of DOS (Digital Organisations and Society) Research Centre at Royal Holloway, University of London. She can be contacted by email: niki.panteli@rhul.ac.uk

Narratives of IT project failure in Government

Christopher Hall | PhD Student | School of Business Management, Royal Holloway, University of London.

One thing most readers will know about large Government IT projects is that many end up being labelled ‘failures’, leading to delays in the implementation of policy and write-offs of millions of pounds of taxpayers’ money. Much previous academic work has suggested that such failures are the result of weak management or poor application of technology (e.g.Nawi et al, 2011). Yet significant efforts have been made to rectify problems like these, especially within the UK Government. I was intrigued by this apparent paradox and wanted to understand the detail of how such projects played out and how we could account for this paradoxical situation. I interviewed project managers, project reviewers and auditors with responsibility for delivering and evaluating these projects and for compiling recommendations when projects were seen to fail. I also analysed audit reports (published by the National Audit Office) and project review reports (normally confidential but a few have been put in the public domain following Freedom-of-Information requests). By analyzing this material from a narrative perspective (Czarniawska, 2007), I was able to identify how and why project narratives were dynamically and interactively constructed in context to produce the label ‘success’ or ‘failure’ (Fincham, 2002) and how this label then became accepted ‘fact’. In this blog I provide an example of how this kind of analysis can account for the continuing failure of some Governmental IT projects.

“Digital by Default” and “Digital by Design”

The UK Government had the ambition to take the majority of interactions between the general public and Government on-line. In a world where you could bank, shop and even get therapy over the internet, why would you want to telephone a Government Department, or even worse, fill in a paper form? The proponents of ‘Digital by Default’ in the Government Digital Service (GDS) wanted to radically change the way that Government ran IT projects. Mostly recruited from outside Government, these ‘digital evangelists’ (Kanter, 2011) dressed differently, spoke differently and importantly behaved differently to ‘conventional’ civil servants. Their network of power relations included a senior Government Minister who acted as gatekeeper for project go-ahead.
Some new IT projects were designated ‘Digital exemplars’ and received special support. These included a project called Common Agricultural Payments-Delivery (CAP-D), which implemented a new regime of farm payments. Concerns were raised by users and policy owners that the new system would not work in practice. Farmers were not the most digitally literate constituency, and the poor connectivity offered by rural broadband was not conducive to the transmission and manipulation of digital maps. More prosaically, the new system would crash with a high workload. As the hard deadline (set by the EU) for deployment approached, the development was abandoned and a backup system was implemented by the Rural Payments Agency (RPA) using paper maps, which were posted to farmers, hand annotated and posted back. These were then interpreted by eye before subsidies were paid out.

Narratives of IT project failure in Government

The perceived failure of the digital project was the subject of a Public Accounts Committee inquiry. The senior GDS official involved was criticized for having “digital dreams” (PAC, 2015 Q 62). Analysis of competing narratives around this project reveal a long battle for its control. While GDS was developing the software, the RPA had complete control of communications with the users; farmers and rural landowners. In these communications the RPA made it clear that the new software was ‘owned’ by GDS and soon the farming press labelled “Digital by Default” as ‘Dogma. By promoting a counter-narrative “Digital by Design”, the RPA relabelled the CAP-D project as a success, as the backup system had saved the policy and farmers had been paid.

Conclusions

I interpret these narratives and counternarratives as tools in a system of power relations (Dawson and Buchanan, 2005) and indicative of a struggle for control of the project. Different parties used ‘success’ and ‘failure’ as rhetorical terms (Fincham, 2002) in order to justify different courses of action. The term ’project failure’ is frequently deployed when a struggle reaches a conclusion, and is used to justify a change in approach, a reduction in scope or a decrease in funding. In 2012 GDS used the ‘failure’ of previous Government IT projects as part of the rationale to introduce “Digital by Default”. In 2015 other actors used the ‘failure’ of CAP-D to discredit “Digital by Default” and regain control of the project, and later label their intervention as a ‘success’. The labelling of a project as ‘failed’ is an indicator of the intensity of the conflicts surrounding them. Yet formal reviews and audits of Government IT projects omit all mention of political activity. Projects are discussed as rational, objective engineering activities and the struggles for control over scope, funding and approach are glossed over. Until such a perspective can be overtly acknowledged, it is not possible to fully understand ‘failing’ Government IT projects or learn from them.

References

Dawson, P. and Buchanan, D., 2005. The way it really happened: Competing narratives in the political process of technological change. Human Relations, 58(7), pp.845-865.

Fincham, R. (2002) Narratives of Success and Failure in Systems Development. British Journal of Management, 13, 1–14. Available online at: http://doi.wiley.com/10.1111/1467-8551.00219.

Kanter, R. M. (2011) Kanter Evolve ( Again ). Harvard Business Review, 89(7–8), 36. Available online at: hbr.org.

Inequality of What?: Digital Inequality under Covid-19

Dr Yingqin Zheng | Senior Lecturer | School of Business Management, Royal Holloway, University of London.
Prof Geoff Walsham | Emeritus Professor | Judge Business School, University of Cambridge

*This blog is based on our short paper to be published in the journal Information and Organization.

The covid-19 pandemic has thrown a spotlight on deep seated inequalities across different societies. Under the pandemic, existing socio-technical discrepancies are magnified, and diverse forms of exclusion, marginalisation and vulnerabilities emerge. The prevalent notions of ‘digital divide’ or ‘digital inclusion’ tend to focus on the division between the ‘haves and have-nots’, and less attention is paid to the structural positioning of actors within the intersectionality of multiple “systems of power”. Extending on our previous discussion on social exclusion – “inequality of what”, we ask again: what do we talk about when we talk about digital inequality? In this blog we review the emerging evidence from Covid-19 observations and explore how digital technology is entangled in multiple fracture lines of social division, including but not limited to gender, race, education level, and geographical boundaries.

Digital inequality is rooted in deep-seated, existing structural inequalities. For example, while digital education has leapfrogged in response to school closures in most countries, vulnerable students on the wrong side of the digital divide are further disadvantaged, especially those living in poverty and with disabilities. Furthermore, schools often serve as a source of health, nutrition and social support for those from under privileged socio-economic classes. Even when some countries have provided free laptops for disadvantaged students, these students are still negatively impacted in terms of well-being and mental health. Similarly, cashless payment and the health-tracking apps implemented under Covid-19 could have excluding effects on the elderly and some low-income groups who may not own or have the knowhow to use a smart phone, and may be rejected to board public transport or enter a venue. In other words, digital inequality has roots in social disparities, digital connectivity is not automatically a remedy and could even exacerbate social exclusion.

The International Labour Organisation estimates that almost 1.6 billion informal economy workers have been significantly impacted by lockdown measures and/or working in the hardest-hit sectors. Among digital workers, platform gig workers were among the worst hit by the pandemic, with almost 70% losing their income, over half losing their jobs and more than a quarter seeing their hours cut. While gig work offers flexibility, the lack of unemployment benefits and sick pay entails significant vulnerabilities for workers. However, only 5 out of 120 platform companies have introduced some form of coronavirus financial assistance. In the Global South, gig workers have received hardly any financial support from either governments or platform companies.

Digital inequality is often gendered. For example 300 million fewer women than men use mobile internet across the globe. This digital gap has further undermined women’s capability to adapt to adversity under the pandemic, both in terms of work and household labour. Based on data from 104 countries, 67% of health workers are women. In addition, women bear greater responsibility than men in taking care of the family and household during the pandemic (e.g. extra housework, home schooling, caring for the elderly and the ill) thus further undermining women’s earnings.

However, the experiences of women under covid-19 are divergent depending on their different socio-economic status and their surrounding social and cultural norms. Women in disadvantaged groups carry the double burden of wage-earning and caring for family members, yet they are also more likely to have lower digital capacity to find relevant information about the pandemic, to support home schooling for their
children, or even to fill in online application forms for economic relief.

Further ‘invisible’ gender inequality is reflected in the ‘male gaze’ from digital surveillance, as Yu (2020) discusses in the context of China’s track and trace system. During a cluster outbreak in northern China, the identity of a young woman was revealed in media reports and her private information further exposed by netizens, because a speculative affair between her and a neighbour was suspected to have triggered the cluster outbreak. In this imaginary ‘love story’, she was described as ‘pretty’, ‘unemployed’, but ‘rich’, and accused of cheating on her boyfriend with the neighbour; later the neighbour was revealed to be a woman as well – at which point the plot turned into a lesbian relationship. In fact, the two did not even know each other and the transmission of the virus was likely to have occurred in an elevator. Thus, even with an assumption that the technology was not designed to discriminate, gendered discourses, social norms and power systems that value monitoring and control over individual integrity and wellbeing are inevitably entangled in the enactment of surveillance systems, and in this case, interact with intersectional identities to produce oppressive social consequences.

So what do we talk about when we talk about digital inequality? The pandemic may bring out new instantiations and shed light on what was less visible before, but the roots of inequalities are deeply entrenched in systems of power and social orders. The examples above reveal the complexity and intersectionality of digital inequality which occurs not along one singular axis of power but along multiple fracture lines and differences. As digital researchers, we need to examine digital technology not only as ‘solutions’ and ‘innovations’, but also how it is intertwined and implicated in producing and reproducing social orders and stratifications.

Dr. Yingqin Zheng is a Senior Lecturer at the School of Business and Management, RHUL

Prof. Geoff Walsham is Emeritus Professor at Judge Business School, University of Cambridge

Virtual Spiritual Agency in Times of Covid

Dr Chloe Preece | Senior Lecturer | School of Business Management, Royal Holloway, University of London.
Dr Victoria Rodner | Lecturer | University of Edinburgh Business School, University of Edinburgh

Zoom made my life much easier,” explains Mãe (mother) Fernanda, an Afro-Brazilian priestess from the coastal city of Santos (Brazil). 

Like many of us, facing an indefinite lockdown, Mãe Fernanda was forced to move her work online. Zoom, along with other video-conferencing platforms that mushroomed in the wake of Covid-19, may have made Mãe Fernanda’s life ‘easier,’ but the service she is providing is no typical consultation.

As an Afro-Brazilian priestess – or mãe de santo – Mãe Fernanda works as a medium, meaning that her faith centres on the practice of spirit possession and the channelling of spirit forces for the good of humanity. As a form of mediumship, we understand spirit possession to be the displacement of our conscious self by a ‘powerful, immaterial being’ be it a spirit, ancestor, or god, that temporarily takes control of our bodies and our minds (Seligman, 2014: 5). During these incorporations, the medium – who acts as a physical vessel for the spiritual entity – channels energies and offers counselling from the spiritual plane to our material world, sharing important oracular messages with official members of the temple (i.e. the ‘spiritual children’ who are initiated into the faith) and regular congregants alike.

Being momentarily stripped of her sacred space and in person contact with the congregation due to new, unforgiving social distancing measures, how does Mãe Fernanda – and other religious leaders – carry out her work as a medium and spiritual consultant? What does this new digitised faith look like and how does spiritual healing work in our ‘new normal’? Thanks to a small seedcorn grant from DOS, we set out to examine how spiritual leaders in Brazil – through their use of digital platforms – recreate the sacred space of their temple over the internet; how followers of the faith materialise healing rituals in their home environments; and how the embodied ritual of spirit possession is distributed across multiple planes, from the spiritual, to the physical to the digital. To do so we undertook 14 interviews with spiritual leaders and followers of Afro-Brazilian temples.

Although Afro-Brazilian services (or giras) may differ in format to other, more ‘traditional’ church services, this move toward a digitisation of faith is shared among many places of worship, including Christian denominations in the UK, as ongoing pandemic measures push religious leaders across the globe to go virtual. In her use of digital platforms, we see how Mãe Fernanda – like other Afro-Brazilian spiritual leaders – aims to recreate the rich, auspicious atmosphere and healing qualities of her terreiro (temple) sharing through our screens the highly adorned altars, the colour-coordinated candles, the smoky ambience of burning incense and sage, the luscious offerings to the entities, and – when there is live-streaming available – the rhythmic drumming, singing, and dancing that make up the spirit possession ritual.

Figure 1. Afro-Brazilian priests and priestesses use social media to connect with the faithful: Instagram posts of elaborate altars (left) and Facebook live-streaming (right) of a gira (weekly service)

As well as inviting followers virtually into their now-empty temples, spiritual leaders also show the faithful how they can recreate shrines and spiritual offerings (or firmezas) in the safety of their own homes.

Not unlike influencers, priests and priestesses of Brazil’s Afro-denominations use different digital platforms for different spiritual purposes: live-streaming through invitation-only Zoom sessions, private YouTube channels, or closed FB groups are geared specifically to the ‘spiritual children’ and mediums-in-training. During these private services, live spirit possession is common as spiritual leaders and their ‘children’ incorporate synchronously the various entities that are called upon during the ritual. Pai Fausto – of a downtown São Paulo temple – explains how simultaneous possession is possible – even via the web – because of the ‘spiritual (umbilical) chord that ties us together.’

It is during spirit possession that messages from the spiritual world are shared with the faithful. These spiritual messages can be of hope, patience, healing, love or even sense-making, especially significant in such uncertain times. A recent message from Mãe Fernanda’s guiding spirit – the Gypsy temptress Pomba Gira – explains how energy has “limitless” and “atemporal qualities” meaning that it can be accumulated and transferred when needed. Very much on trend with post-human theorising, Pomba Gira’s message encourages Mãe Fernanda to record her services so as to allow her ‘spiritual children’ to ‘play them back’ at their convenience and seamlessly tap into the spiritual agency captured online.

Figure 2. Live-streaming tarot reading on FB with a Pai de Santo (Afro-Brazilian priest).

Beyond these private sessions, other live-streaming sessions via FB, Instagram, or Telegram, in which spiritual leaders recreate the temple’s ambience but refrain from spirit possession, are more public and accessible, encouraging anyone to ‘like’, share and take part in the lively commentary online. Oracular consultations, including the popular tarot card-reading, can either be very public via FB live-streaming, or closed through individual Skype or Zoom calls. Online mediumship courses are run via Zoom or other video conferencing platforms and people are asked to sign up in advance. But it is WhatsApp that becomes instrumental for direct contact between the faithful and their spiritual leader. Like a real-time Agony Aunt, WhatsApp enables the faithful to share their troubles with the priest or priestess and receive instantaneous feedback via the ever-popular feature of voice messages. Noting how her WhatsApp became ‘very heavy’ since lockdown, Mãe Fernanda explains how it is ‘through this platform that people were able to overcome the lack of physical touch, the lack of hugs, the lack of face to face contact’.

Although mediatised religious services are nothing new, our interests lie not only in a new wave of mediatised faith (through the digital) but how consumers engage with their faith not merely through ‘likes’, shares or live commentary, but in an active co-construction of the healing on offer, from the recreation of shrines to the possession of spirits, all from the safety of their homes. It is through the digital, that spiritual leaders (temporarily) overcome the physical obstacles of life with Covid, distributing through the web the spiritual agency made available to them through the phenomenon of spirit possession, forming a hybrid constellation of a heterogenous network of activities, subjects and objects shaped by different forms of interagency. In a global pandemic where consumers find their agency constrained, they can use these digitised services to re-embed themselves in their faith through this distributed agency. 

Dr Chloe Preece is Senior Lecturer in Marketing at Royal Holloway, University of London. Her research focuses on marketing within the arts and creative industries and how this translates into social, cultural and economic value.

Dr Victoria Rodner is Lecturer in Marketing at the University of Edinburgh Business School (UEBS) and her research main interests are in value creation in the arts, religious and spiritual consumption, brand narratives and institutional theory.

The new DOS interdisciplinary research cluster on Cybersecurity, Design and Human Behaviour

On 6th November 2020, a new research cluster within RHUL’s DOS Research Centre was launched. The new research cluster on ‘Cybersecurity, Design and Human Behaviour’ aims to offer a welcoming environment for idea exchange, a platform for researchers from different research areas at RHUL and beyond to connect and work together on interdisciplinary projects, and an opportunity for collaborations on interdisciplinary funding applications. The new cluster is led by Dr. Nisreen Ameen, Lecturer in Marketing in the School of Business and Management, and Dr. Elizabeth Quaglia, Senior Lecturer in the Department of Information Security , who have reached out to researchers at RHUL from various disciplines to discuss ideas in developing the interdisciplinary area of research.

The identified areas of interest include:

  • Technology design and human interaction
  • Security and privacy in the digital society
  • Design narratives and narratives of security
  • User experience and advanced digital technologies
  • Accountability and ethics in the digital experience

The launch event

The launch event had a great attendance and started with an introduction from Dr. Nisreen Ameen, Dr. Elizabeth Quaglia and the Co-Director of DOS, Professor Gillian Symon. The main part of the event consists of two fascinating keynotes from Professor Jason Bennet Thatcher and Professor Ivan Visconti.

We heard first from Professor Jason Bennet Thatcher, Temple University, delivering the talk ‘Protecting a whale in a sea of fish: cybersecurity and top executives.

Professor Jason Bennet Thatcher, Temple University

Professor Thatcher explained that whaling is one of the most financially damaging, well-known, effective cyberattacks employed by sophisticated cybercriminals but yet there is little research on this phenomenon.He explained how important it is for researchers to consider the industry and context when conducting research on cybersecurity. In particular he argued for the importance of focusing on top executives in such research as they play a significant role in increasing cybersecurity awareness in organisations. Professor Thatcher highlighted the need for different types of research such as econometrics and qualitative research in this area to understand the drivers and problems, in addition to archival work on vulnerabilities and breaches. Such issues have arguably become even more important after the major shock of the COVID-19 pandemic, which caused a significant increase in the number of cybersecurity threats and attacks. It is vital to build further collaborations between academics and industry practitioners when planning and providing cybersecurity training. Such steps are important to protect data, jobs, people and society as a whole.

Professor Ivan Visconti, University of Salerno delivered a talk on ‘Blockchain Technology and Decentralized Contact Tracing: The Good, the Bad and the Ugly’.

Professor Ivan Visconti, University of Salerno

In a very interesting journey through the promises and shortcomings of each technology, we learned that blockchain has not yet managed to find the right balance between transparency and confidentiality, and that creating a digital twin of a physical asset is still a challenge. As for digital contact tracing, a plethora of issues were identified (from the imprecision of distance measuring to the false alarms such systems can cause), and the reactions of the security, big tech and policy communities, demonstrating how truly interdisciplinary real-world technological solutions are.

The two keynotes generated connections to some of the themes covered by the new DOS cluster. After the talks, Dr. Elizabeth Quaglia and Dr. Nisreen Ameen presented some of the topics of research interests on which the research cluster is focusing on in more depth and the importance of these areas. Examples include: challenging traditional narratives of security; balancing the requirements of user privacy and accountability in the digital experience; security and privacy issues that arise in a post-COVID-19 world; and ethical concerns in the adoption of advanced technologies.

The new DOS cluster will remain active for the rest of the academic year. Upcoming events in the planning include a round table meeting for members of the cluster and a workshop on interdisciplinary research projects and funding.  Researchers who are working on related areas and wish to join the research cluster please email the cluster co-leaders Dr. Nisreen Ameen and Dr. Elizabeth Quaglia to express their interest. We are very much looking forward to the next steps of this cluster!

Gig-work and spatiotemporal (in)justice: Auto-ethnographic study of food delivery platforms

Shyam Krishna| PhD Candidate| School of Business and Management at Royal Holloway, University of London.

In recent months amidst the uncertainty of COVID-19, food delivery workers in India have faced a tightening of their working conditions. The main contention voiced by the workers in strikes and protests is that digital platforms have lowered effective wages by changing the payment structure and its underlying algorithmic calculations. My research seeks to understand the uncertainties in how wages and other work conditions are affected by algorithms. As part of a research project (Investigators: Dr. Yingqin Zheng / Shyam Krishna ) I queried such algorithmic ‘social justice’ implications of digital platforms. Set in the south Indian city of Chennai, I conducted several  interviews with food delivery workers (called ‘riders’) and engaged in the work myself in a form of auto-ethnography. I created as many opportunities as possible to observe first-hand the algorithmic control of work, the customers, the digital platforms, and its processes, and also the restaurants using these platforms. I worked on two different food-delivery platforms.  I found that a steep learning curve faced me which entailed learning to navigate the digital platform, gaining local knowledge of the city and even knowing the local cuisine.

Working as a rider over a period of five weeks just as the COVID19 crises was blooming globally and in continuing engagement with other riders during the pandemic I gained some useful insights into the ‘gig-work’ practices with some being specific to the Indian context.  Mirroring recent work on ‘spatiotemporalities’, the main contestation as found in my research is between workers and the platform in how their ‘space’ and ‘time’ are algorithmically controlled and manipulated.

An aspect of spatiotemporal negotiation emanated from the first order I delivered. The order was assigned to me with a rather resounding buzz on my phone

A ‘New order’ of food delivery : Loud alarm and vibrating buzz alert on workers phone.

All platforms use haptic feedback and a loud alarm on the smartphones designed to grab attention and ultimately control rider behaviour to attend to orders quickly. I had about 30 to 60 seconds to accept the orders assigned to me without clear information of the distance to be driven or the address for delivery. The only information I saw on screen was the estimated time taken to reach the restaurant. Features such as alarms and partial information shown are ostensibly designed to add pressure and even panic at many points during the food delivery work process. These temporal pressures play out during riding on the road which itself posed significant challenges specific to an Indian urban context. The risks on road due to traffic were compounded by near constant exposure to air pollution or difficult weather conditions during the hot and humid days in Chennai. Such risks are transferred from the customer to the rider as is inherent to the gig-work practice and become a common expectation of work conditions that workers navigate.

Risk on road during gig-work: Food delivery workers crossing a road in Chennai .

I barely juggled such vagaries of working alongside the technical issues I faced – such as using mapping services as location-based-services were often imprecise. Extra but unpaid effort was required to sort out the erroneous approximations automatically generated by the digital platform or manual errors made by customers in marking locations on a map. Moreover, it was repeatedly reinforced in training that the closest rider to a restaurant (in theory at least) is assigned the next order. So, there was a quite a lot of effort in figuring out the correct and the most optimised location. Luckily – or as is probably the way in which many new riders learn this – I was helped along by other experienced riders. Some of these riders even took the time to escort me to specific places and gave me tips on the time of the day to arrive there.

Moreover, algorithmically defined but imperfect estimates of waiting times or delivery times were a constant issue faced by workers and are referenced by the restaurants and the customers even when we met face to face. Power and information are privileged to customer and restaurants, the platforms use the riders in their subordinated position to negotiate difficult physical conditions arising within the digitised food delivery process. This happens under the close control and manipulation of workers’ space and time even when such extra efforts are unpaid and unaccounted for in how wages are determined.

The findings from this research suggest that riders face unfair conditions and intensive control of work broadly brought about by time-controlled and location-driven algorithmic elements.  There are clearly intimate and individual spatiotemporal machinations within gig-work under the mostly opaque nature of platforms and algorithms. These have been conceptualised as ‘spatiotemporal (in)justice’  to probe the aspects of (un)fairness and (in)equity faced by gig-workers.  Centring on spatiotemporal justice then would help establish what ‘fair’ pay and practices, standards, and metrics for food delivery gig-workers might look like – which forms the basis of the ongoing collective efforts within India and beyond. The research project itself has resulted in a report on unfair practices in food-delivery work shared with riders, labour leaders and community organisations in Chennai, to assist in ongoing efforts. A further academic paper is forthcoming in the IFIPJWC 2020 conference proceedings.


Why Amazon Reviewers Review (and How to Deal with Fake Reviews)

Dr Philip Wu | Senior LecturerDepartment of Digital Innovation and Management at Royal Holloway, University of London.

Online reviews have become an important phenomenon in this so-called reputation economy. Headlines such as “online reviews impact purchasing decisions for over 93% of consumers” seem exaggerated but not entirely surprising. On the surface, online reviews are simply after-sales opinions shared online by average consumers; yet, a close look would reveal that it’s a complex phenomenon influencing, and being influenced by, commercial activities. Most research about online reviews, including two of my own (1 & 2), focused on the value (e.g., “helpfulness”) and impact (e.g., sales) of the reviews, whereas the people who contributed those reviews have largely been overlooked. After all, who are these reviewers and why are they writing product reviews?

These are important questions not only for social scientists who are interested in studying the reviewing behaviour, but also for today’s e-commerce platforms where fake reviews are rampaging. Thus, in a more recent paper, I turned my attention to reviewers on Amazon to explore how a mix of, and the interaction between, different types of motivation shape the reviewers’ behaviours. The theoretical foundation of the work was the theory of motivation crowding, which posits that the motivational interaction in performing a task can result in motivation moving toward the extrinsic side (crowding-out) or the intrinsic side (crowding-in).

I conducted in-depth interviews with 27 reviewers on Amazon.co.uk, including four Top 10 reviewers at the time and six reviewers in the “Hall of Fame”, plus a six-month observation of the Amazon reviewer forums (in writing this blog post, I discovered that these forums have now disappeared! I think I know why.). I use the interviewees’ own words to explain the four dominant motives for writing product reviews on Amazon:

  • enjoyment (intrinsic) – “I enjoy reviewing”
  • material reward (extrinsic) – “I write reviews so I can get freebies”
  • reputation/recognition (extrinsic) – “I need some kind of recognition”
  • direct reciprocity (extrinsic) – “You got the obligation coz you agreed to review”

More interestingly, there is a crowding-in effect where reputation (commensurated as reviewer league table ranking) reinforces the enjoyment of reviewing, and a crowding-out effect where the obligation of reciprocating material reward undermines the enjoyment.  I also found that the reviewers’ motivation mix could evolve as their rankings change. Many prolific reviewers started reviewing with an intrinsic motivation of “fun” or enjoyment. As the reviewing activity is being rewarded by status recognition and unsolicited freebies, extrinsic elements become more prominent in the motivation mix. After a while, however, the reviewers begin to feel a loss of self-determination due to external influences and decide to “take a step back” from pursuing extrinsic rewards, which result in intrinsic interest taking centre stage again.

The motivation crowding effects and the evolution of motivation mix have important implications for e-commerce platforms like Amazon.  For example, for novice reviewers, positive feedback (in the form of “helpful” votes) can create a powerful “recognition-enjoyment” crowding-in effect. Hence, the platforms need proper presentation and sorting mechanisms to ensure visibility of new reviewer’s contribution so as to curb the detrimental Matthew effect.

The study also raises questions about e-commerce platforms’ strategies in dealing with “fake reviews”. Some claim that they have solved the problem through automated fake review detecting (e.g., Fakespot). Fake reviews are generally understood as reviews written by people who did not actually purchase the product or service. However, as review writing is driven by a whole range of interacting motives, we need to have a more nuanced view of what fake reviews really are. Many of the prolific reviewers I interviewed had accepted “freebies” but also produced honest and high-quality reviews.

Perhaps one way to combat fake reviews is through some sort of grassroots review moderation.  I was fascinated when a seasoned reviewer told me that he acted like a “warrior” to fight against fake reviews and he knew which reviews were fake at first glance. He would vote the fake review “unhelpful”, report it to Amazon, or even write a review pointing out why the other review was fake. These “warriors” seem motivated either by a commitment to the platform or a moral duty of “making things right.” Leveraging the motivation of this small group of individuals, coupled with an automated detection system, could be the key to solving the fake review problem.

Dr Philip Wu is a Senior Lecturer in the Department of Digital Innovation and Management at Royal Holloway. His research lies at the intersection of social psychology, technology design, and information management.