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Best Practices of Online Retailers
In another related study, we examined the best selling Web sites and, assessed the nature andextent of impact of various B2C Web site characteristics on the online revenues derived through the
Web sites. Based on the survey results from the study described in the
previous section, we identified key
variables under each of the four Web site dimensions, and then empirically examined their impact on
online sales.We used the data from Internet 500 provided by ZDNet
Interactive week (http://www.zdnet.com/intweek). Interactive Week estimated data on online revenues for over 500 firms
for the years 1999 and 2000. For measuring online sales, the magazine used the definition by the
Department of Commerce: “E-commerce sales are sales of goods and services
over the Internet, an extranet, electronic data interchange or other online system. Payment may or
may not be made online” (McCormick, 2000). From the list of 500 companies provided by
Interactive Week, we visited the Web site of each of these companies and collected data on all the
variables. The Web interface of the online retailers was extensively examined to identify, assess
and evaluate the Web site characteristics. We observed and investigated each Web site, and coded
the site on each site characteristics along the four B2C site dimensions. The following table
summarizes the Web site characteristics that were examined in our study.
Web site characteristics | Description |
|---|---|
CONTENT | |
1. Presence of Decision Aids | Does the firm’s Web site provide help for decision-making? |
2.Information on products and services | Does the firm’s Web site provide information on the products and services? |
3. Information on the firm | Basic information on the company, background, etc. |
4. Frequent update of content | How often is the Web site updated? Is there a “what’s new” section or a section introducing new products, catalogues features or news that helps in identifying updated content? |
5. Frequently Asked Questions (FAQ) | Does the firm’s Web site provide frequently asked questions section on product related questions or the company? |
6. Company contact information | Does the firms’ Web site offer any way to contact it via mail, e-mail, phone or fax? |
DESIGN | |
1. Complexity of navigation | What type of navigation structures is deployed in the Web site? |
2. Presence of site index / help section | Does the Web site provide an index / help page? |
3. Use of multimedia | What type of multimedia does the Web site use? Are there heavy graphics, animations, sound and video? |
4. Search function | Does the firm’s Web site have a search function? |
PRIVACY | |
1. Privacy statement | Does the firm’s Web site provide a privacy statement with notice, choice, access, security, and enforcement? |
2. Use of third party privacy seals | Does the firm’s Web site provide third party seals that reinforce privacy? |
SECURITY | |
1. Provision of individual user accounts and password | Does the firm’s Web site provide opportunities to create individual accounts with logon-id and password? |
2. Presence of mechanisms for making online as well as offline financial transactions | Does the firm’s Web site provide opportunities to make no online transactions? |
3 Use of Secure modes of data transmission | Does the firm’s Web site provide secure modes of data transmission such as SSL, HTTPS, etc.? |
Results of the Study
Multiple regression was performed to assess the associations between the Web site
characteristics and online sales. This analysis revealed nine of the 15 Web site characteristics to
be significantly influencing online sales. The overall R-squared statistic was 0.296 which implies
that the independent variables explain about 30% of variance in the online revenues. Based on the
number of significant items within each dimension as well as on the beta coefficients, we ranked
dimensions and significant items. The results are presented in
Table 10-3.
More details of the study and its findings are provided in Ranganathan and Grandon
(2002).
Dimensions | Standardized Beta Coefficients | |
|---|---|---|
Rank | 1. SECURITY | |
1 | Provision for having individual accounts and password | .172*** |
2 | Availability of secure modes of data transmission | .169*** |
3 | Presence of mechanisms for making online as well as off-line financial transactions | .108** |
2. CONTENT | ||
1 | Frequent update of content | .214*** |
2 | Information on the firm | .155*** |
3 | Presence of FAQ section | .101* |
4 | Presence of decision aids | .097* |
3. PRIVACY | ||
1 | Presence and content of privacy statement | .209*** |
4. DESIGN | ||
1 | Use of multimedia (negatively associated with online sales) | -.107** |
* p<0.1; ** p<0.05; ***p<0.01 | ||
