Impact of Negative Online Reviews on Brand Trust: The Moderating Role of Online Company Response in the Sri Lankan Clothing Industry

Abstract

Negative online reviews can significantly impact brand trust, particularly in consumer-driven industries like clothing, where purchasing decisions are heavily influenced by digital perceptions. This study examines the relationship between negative online reviews and brand trust in the Sri Lankan clothing industry, with a particular focus on the moderating role of online company responses. Addressing a key gap in the existing literature, this research explores how proactive and strategic responses to negative feedback can mitigate potential damage to brand trust and help brands maintain strong consumer relationships. A quantitative research approach was employed, utilizing a positivist research paradigm and a deductive methodology. Primary data were collected through a structured questionnaire with 15 questions, distributed to a sample of 394 respondents aged 18 to 60 years who have interacted with Sri Lankan clothing brands online. Data analysis was conducted using IBM SPSS Statistics, applying descriptive statistics, correlation analysis, and regression modeling to examine the relationships between negative online reviews, brand trust, and the moderating effect of online company responses. Findings reveal a strong negative correlation between negative online reviews and brand trust, indicating that customer trust in a brand significantly declines when exposed to unfavorable feedback. However, the study confirms that online company responses play a crucial moderating role in mitigating the adverse effects of negative reviews. Personalized, timely, and well-crafted responses can reduce reputational damage, restore consumer confidence, and maintain trust. These findings emphasize the importance of proactive digital engagement and robust complaint management strategies for clothing brands operating in Sri Lanka’s increasingly digital marketplace. Despite its contributions, the study acknowledges several limitations. The focus on negative online reviews as the sole determinant of brand trust means that other potential influencing factors were not considered. Additionally, as the study is specific to the Sri Lankan clothing industry, findings may not be fully generalizable to other industries or markets. The use of a structured questionnaire with a limited number of questions may also have constrained deeper consumer insights. This research holds significant theoretical and practical implications. Theoretically, it contributes to brand trust and digital marketing literature by demonstrating the moderating effect of online company responses in managing consumer perceptions of negative feedback. Practically, the findings offer actionable recommendations for clothing brands, emphasizing the need to; Respond quickly and transparently to negative reviews to minimize damage; Train social media and customer service teams to handle complaints professionally; Implement crisis communication and service recovery frameworks to maintain brand credibility; Leverage negative reviews as opportunities to demonstrate responsiveness and commitment to customer satisfaction. This study also provides a foundation for future research, particularly in cross-industry comparisons, longitudinal assessments of response strategies, and an exploration of how negative reviews on social media platforms like Instagram and YouTube affect brand trust. Understanding the long-term impact of response strategies could further help businesses refine their digital reputation management practices. By effectively managing negative online reviews, brands can not only preserve trust but also transform dissatisfied consumers into long-term brand advocates, strengthening their competitive advantage in the digital marketplace.