Academic journal article Journal of Electronic Commerce Research

Providing Information and Enabling Transactions: Which Website Function Is More Important for Success?

Academic journal article Journal of Electronic Commerce Research

Providing Information and Enabling Transactions: Which Website Function Is More Important for Success?

Article excerpt

ABSTRACT

In this study, we propose and test a chain of effects from website content, through informational and transactional success to overall website success and company performance. This framework enables us to determine the relative importance of the informational and transaction-related website functions for website success, and to show how website functions, through a number of intermediate performance measures, contribute to the financial performance of a company. The results are based on an empirical study of 380 companies across a wide range of industries. We find that both the informational and the transaction-related website functions have a significant positive impact on website success, but that the impact of the informational function is considerably larger. Our results show that firms can improve website performance through providing relevant website functions throughout the entire customer purchase process. An important result of our study concerns the mediating role of customer performance: customer performance in terms of e.g., customer satisfaction and retention, is a necessary condition for website success to result in financial performance. The chain of effects shows that firms profit from websites that are designed to meet customer needs and wants.

Keywords: Website success; Informational and transaction-related website functions; Company performance

1. Introduction

Companies are making large investments in their online businesses [DMA, 2013]. Not all website investments, however, lead to increased performance [Auger, 2005; Xue et al., 2006] and the search for ways to make the Web profitable is therefore still on. Commercial websites will have to provide high-quality information to meet customer needs at different stages of the customer purchase cycle [Flavián-Blanco et al., 2010]. Therefore, websites may offer different functions to customers related to providing information and/or enabling transactions [Otim and Grover, 2006]. Hence, insights are needed on the link between website design features, website functions and finally website performance and firm performance [Mahmood et al., 2004].

Firms vary considerably in their use of e-business [Hsu et al., 2006]. As previous research suggests, a crucial factor for explaining differences in performance could be the extent to which a company uses a website for informational and/or for transactional purposes [Geyskens et al., 2002; Lee and Grewal, 2004; Mithas et al., 2006-7; Teo and Pian, 2004]. Although each website has an informational function, the extent to which this function is implemented in the site varies considerably, from providing only basic information about the company to extensive information about both the company and the specification and possible uses of its products. Similarly, the extent to which sites support transactions varies considerably. Previous research links web functions directly to customer and organizational performance measures. Otim and Grover [2006] found customer-perceived web-based service dimensions to influence repeat purchase intention. Saeed et al. [2002-3] found that web functions are related to business performance. In a subsequent study, Saeed et al. [2005] find the relationship between web functions and long-term financial performance to be mediated by short-term financial performance measures. However, the relationship between web functions and performance measures may be more indirect than these studies suggest.Conceptually, there is a large gap between operational marketing actions such as deciding about the characteristics of a web site, and organizational goals such as market share and ROI. Differences occur for instance in terms of time perspective, and different variables may act as mediators. Therefore, we follow previous studies that use a chain-of-effects model (e.g., [Rust et al.,2004; Rubera and Kirca, 2012]). We disentangle the chain of effects between website features and company performance, and suggest that website functions influence a company's financial performance through their effects on website success and customer performance. …

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