Web Systems Design and Online Consumer Behavior [Electronic resources]

Consumer Perceptions on Effective Web Site Design

There is a growing body of research on online consumer behavior and effective Web site design. Researchers have proposed conceptual frameworks and have conducted empirical studies to understand consumer perceptions on effective B2B Web site design. Nour and Fadlalla (2000) provided a conceptual framework for understanding online market using two dimensions, namely product type and delivery mode. They further suggested that the technologies and the Web design differed based on a business’s position across these two dimensions. A.T. Kearney proposed a “7C” framework (content, communication, customer care, community, convenience, connectivity, customization) as a basis for improving online performance. Among the empirical studies, Mithas et al. (2003) studied the effect of Web site characteristics on consumer loyalty, and contend that the relative importance of different Web sites features vary depending on the domain in which Web sites are nested. Tan (2003) investigated the influence of decision aids and information load on consumer decision-making behavior, and found that more sophisticated screening aids that assist a consumer in filtering a large quantity of information do not necessarily improve decision effectiveness. Adopting a similar line of inquiry, Palmer (2002) studied the relationships between Web site design elements and Web site performance, and reported that Web site success is highly associated with Web site download delay, navigation, content, interactivity, and responsiveness. Similar results were found in a study by Madeja and Schoder (2003). They pointed out that companies can increase their success in e-business if their Web sites show content from a variety of media as well as if they are easy to navigate and readily accessible.

Longitudinal studies have also been conducted to determine how Web site characteristics change over time. For instance, Yeung and Lu (2004) proposed a set of quantitative Web site attributes to better understand the evolution of functional characteristics of commercial Web sites. Further, there is a wealth of practitioner-oriented work that has given numerous guidelines on designing and developing online retail Web sites (see, e.g., McGovern, 2004; Nielsen, 2004, 2003; Hart, 2003; Holzschlag, 2002; Olive, 2002; Park and Noh, 2002; Marquis, 2002). A review of such literature suggests that the topic of effective Web site design spans several variables, covering multiple dimensions.

Online shopping is fundamentally done using a Web-site interface; hence it is not surprising that the critical characteristics that make up the site have received considerable attention. Issues such as the usability of Web site, ease of navigation, user-friendliness of the Web site, informative nature of the content, display of products and services, ease of shopping, secure payment mechanisms, graphic design, etc., appear to feature prominently and repeatedly in the literature. A number of studies have pointed out the importance of trust in online consumer experience (e.g., McKnight et al., 2002; Pavlou, 2003; Xu et al., 2003). These studies have focused on developing confidence-building measures through the Web site so that the consumers could trust a Web site, share their information and purchase products and services online. Issues that have been specifically discussed in extant literature relate to security and privacy policies (e.g., Suh and Han, 2003; Hann et al., 2002). Implementing secure modes of conducting online transactions and assuring the privacy of information provided have been highlighted as important facets contributing to trust building of online consumers that ultimately influence their decision to make an online purchase.

Though extant literature has suggested several variables as being critical in designing shopping Web sites, it is not clear if all these variables matter, and if so, the extent to which they matter. It becomes important to ascertain the diverse claims, empirically investigate them, and thereby identify key Web site characteristics that influence online consumer behavior and prioritize them. In order to understand the perceptions of online consumers on effective Web site characteristics, a survey was conducted to identify the key Web site features that attract their attention.

Based on an extensive literature review, we tested the efficacy of common recommendations for designing effective B2C Web sites. We created a survey questionnaire based on the items suggested by previous research and practitioner articles. The instrument was pilot-tested and administered to a convenience sample of 409 individuals. Statistical analyses were performed on the 214 responses that were found usable for analysis. The analysis suggested four broad dimensions of business-to-consumer Web sites. Each of these four dimensions included a number of specific Web site characteristics that compositely formed the larger dimension. The four dimensions identified by the analyses were: content, design, privacy, and security. A brief description of the dimensions and the specific characteristics underlying these dimensions is provided in the subsequent sections, followed by the results of our survey.

Content

Content refers to the information, features or services offered on a Web site. Huizingh (2000) considers information, transaction, entertainment, and the key features in the Web site as the main sections of content. The quality of information content on a Web site is reflected by the extent of available information about a firm, its products and services and mechanisms through which a surfer can make contacts with a firm representative.

The content of a B2C Web site plays an important role in influencing the purchase decision process of a consumer. Online consumers are attracted to a B2C site because of its contents, and then decide to make an online purchase due to the search costs involved in finding and researching the product in a different site. Therefore, a B2C Web site content should allow the consumers to locate and select the merchandise that best satisfies their needs, in the easier manner. The richness of product and service information presented in a Web site influences the online purchase behavior of consumers. Many of the pure Internet retailers such as Amazon.com capitalize on the concept of infinite shelf space by having a virtual inventory of a diverse range of products. In order to counter the competition from such online retailers, even traditional firms have started presenting and displaying their entire catalog online. The content of a Web site has been said to be a critical success factor for retailers who want to become online retailers (Calkings et al., 2000) as even the traditional off-line retailers can present a virtual inventory of products and win customer orders in the same way a pure Internet-only online retailer could do.

Despite claims about the Internet creating a frictionless-medium for conducting business, studies have found substantial price dispersions on the Internet (Brynjolfsson and Smith, 2000). These authors have concluded that online merchants who provide good information content, and tools that make it easier for consumers to identify, research and evaluate products may be able to charge a premium price, especially for time-sensitive consumers. Web sites could provide better search utilities, suggestion tools, product samples, product reviews, testimonials and faster checkout services in order to attract and retain online consumers.

Design

Design refers to the way in which the content of the Web site is presented to the customers. The design of a B2C Web site plays an important role in attracting, sustaining and retaining the interest of a consumer at a site. The design of the Web site is as important as its content and it has been studied in diverse contexts. Web usability is the ease with which a site can be used and navigated by the consumers (Nielsen, 2000). Web usability is largely affected by the design elements that include speed of downloading, the way data and Web site content is arranged, the graphical elements deployed in the site, and its final construction. Surveys of online consumers have repeatedly found ease of navigation in the Web site design to be a key factor that determines the repeat purchases from B2C Web sites (The Wall Street Journal, 1999). Wan (2000) studied features of Web site design and placed them in a matrix of business functions versus customer values. Huizingh (2000) conducted an empirical research of a sample of 651 Web sites extracted from Yahoo and Dutch yellow pages to examine their design characteristics. He considered six characteristics in Web design: navigation structure, search function, protected content, quality of the structure, image, and presentation style, and, did not find significant differences in design among the Web sites studied.

One of primary facilitators of online buying is the ease with which customers can access information about the products or services, and use it to make informed decisions about the purchase. In their decision process, searching for relevant information can be costly and frustrating. A study by Forrester, found that more than half the online consumers use the Web site search functionality to find products, and the likelihood of their purchase increases with better search utilities in the site.

Further, attempts to evaluate the design quality of a Web site have also been made. Liu and Arnett (1998) established a framework to appraise and evaluate the design quality of an electronic marketplace on the Web. The framework proposed information quality, learning capability, playfulness, system quality, system use, and service quality as factors that are related to well designed Web pages. In another study, Liu and Arnett (2000) tested the previous factors on 698 Web sites of Fortune 1000 companies. They found that the success was influenced by the following variables: quality of information and service, system use, playfulness, and system design quality.

Privacy

Retail Web sites use a number of mechanisms to gather information about their visitors. Explicit mechanisms such as registration forms and Web surveys, and implicit ones like cookie files are commonly used for gathering data about surfers. Such information serves as vital inputs to various marketing, advertising and product related decisions made by online retailers. However, increasing numbers of Internet users have expressed their concerns over potential misuse of personal information and their privacy. For example, in a survey conducted by Direct Marketing (2000), it was found that 58% of the respondents cited privacy concerns as a major barrier to online shopping. To address this issue, a number of Web sites have developed and displayed consumer privacy policies. An effective privacy policy needs to include the following principles of fair information practice: (a) Notice, disclosure of the companies’ information collection, use and dissemination practices, (b) Choice, opportunity for customers to choose how their information is used, (c) Access, for customers to personal information and the ability to correct errors, (d) Security, of customer information against unauthorized access and disclosure; and (e) Enforcement, ability for customers to submit questions or complaints about privacy.

Use of third parties to certify the privacy compliances of businesses has become another popular practice to allay consumer concerns about privacy. A number of independent companies (e.g., www.truste.com) have emerged to verify, audit and certify the privacy policies of various Web sites. The privacy seals issued by third party companies such as Truste are expected to provide consumers with up-front assurance that a Web site’s policies accurately reflect their stated privacy practices.

Security

Another frequently cited concern about Web retailing is the security of financial transactions made over the Web. Cranor (1999) suggests that online privacy initiatives will be successful only if they are accompanied by tools and procedures providing strong security. In the last few years, several technical advancements have been made to strengthen the security for Web-based transactions. Some examples of these tools are encryption, secure socket layer (SSL), firewalls, and access control systems. There have been significant advancements in areas such as digital signatures and cryptography as well (Bhatnagar et al., 2000; Oppliger, 1997). Despite these developments, consumers are still concerned about conducting financial transactions over the Web (Kiely, 1997; Mardesich, 1999). To address these concerns, retailers offer alternative off-line payment modes like telephonic transactions or through checks. Many Web sites also have the practice of offering individual accounts with a logon-id and password.

These four dimensions - content, design, privacy, and security - have been found to be significant factors positively influencing Web site users. For example, Palmer (2002) found that higher quality content and more navigable Web sites were associated with greater perceived success by site users in all the three studies he conducted. In addition, these four dimensions are closely related to the groups originated by Scheffelmaier and Vinsonhaler (2002-2003) in a more recent study. They examined 59 studies of properties characterizing successful Internet commerce Web sites and defined 12 groups of properties. For instance, they found that coherence — a group property that defines how well the site is organized — was present in 29 out of the 59 studies while navigation — a group property that defines how easily the user can find pages containing the desire functionality — was present in 18 out of the 59 studies.

Results of the Consumer Survey

The survey of 214 online consumers confirmed the importance of four dimensions – content, design, security and privacy — and revealed their association with the purchase intent of online shoppers. Further, multiple discriminant analysis gave some insights into the relative importance of these dimensions and their ability to predict purchase intent. Moreover, the importance of each item making up the larger dimension of the B2C sites was also identified. Cronbach’s coefficient alpha was utilized to assess the reliability of the four dimensions. The results of the study are summarized in Table 10-1. For more details about the study and its results, please refer to Ranganathan and Ganapathy (2002).