Effect of store design on consumer purchases: an empirical study of on-line bookstores
Introduction
The introduction of the Internet, coupled with the rapid proliferation of the world wide web (WWW), has created a challenging arena for business. A surge of interests in e-commerce that allow transactions to be conducted over the Internet has propagated from the US to virtually every corner of the world. Web-based e-stores increase at an unprecedented speed. The number of stores have increased at an annual rate of greater than 50 percent in some industries, such as banking, stock trading, and bookstores [17]. Although some dot-com companies have faced difficulties recently, it is clear that the trend of going on-line is the norm today.
Given its enormous potential, research in the area has increased very fast and expanded to many different lines. For instance, Hoffman et al. [11] and Hamilton [10] examined the opportunities and challenges of the web. Tenenbaum et al. [22] proposed an architecture for Internet commerce. Kambil [14] studied potential electronic business processes. Bailey and Bakos [2] examined the impact of electronic markets on intermediaries. Dreze and Zufryden [7] proposed a methodology for assessing the effect of advertising on the Internet. Lee and Clark [15] examined the impact of electronic markets on firm competitiveness and market structures. Jarvenpaa and Todd [13] studied consumer reactions to electronic shopping and identified product perceptions, shopping experience, and customer services as major factors for consumers. Bhimani [3] and Denning [6] discussed security in electronic commerce. Panurach [21] and Neuman [19] studied electronic payment systems. Gupta et al. [9] studied merchandise pricing in e-commerce. Liang and Huang [16] found that transaction costs play a key role in consumer selection of electronic channels. Liu and Arnett [18] and Wan [23] examined the factors associated with website success and opportunities that enhance commercial websites. Four factors affecting website success have been identified: information and service quality, system use, playfulness, and system design quality.
The purpose of this article is to examine the effect of store design quality on consumer purchases using on-line bookstores as the test bed. The design of an on-line store plays the same role as the layout of a conventional store. However, design of an on-line store is more influential than the layout of a conventional store. This is because web pages are, in most cases, the only way that customers know which products are available at the store and about other information needed to complete an electronic transaction. Hence, a well-designed store should be more attractive for customers.
Another issue to explore is whether and why certain functions are more important than others. Previous research findings on the relative importance of design functions of virtual stores are inconclusive [12], [20]. Building knowledge of the relative importance can generate useful guidelines for designing successful on-line stores.
Here, functional requirements of on-line stores are derived from the customer’s perspective, using the consumer choice model proposed by Engel et al. (the “EKB” model) [8]. The requirements are organized to create a set of guidelines for designing and evaluating electronic stores. These guidelines are further divided into three theoretical categories:
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Motivators, such as having a good search engine, provide direct support to the customer transaction process.
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Hygienic, such as having good security, protect customers from risks or unwanted events in the transactional process.
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Media richness, such as providing chat rooms, add more information channels to the process.
The remainder of the article is organized into three sections. Factors that may affect the successful design of e-stores are summarized in Section 2. The empirical design and findings are reported in Section 3. Section 4 concludes the paper.
Section snippets
Factors for designing successful on-line stores
Designing a good website is a complicated task. Many factors must be taken into account. A good design must provide adequate functional support to meet customer needs at each stage of their decision processes. Jarvenpaa and Todd categorized customer concerns into four aspects: product perception (quality, variety, price), shopping experience (effort, compatibility, playfulness), customer service (responsiveness, assurance, reliability, tangibility, empathy), and consumer risks (economic risk,
An empirical study
In order to examine the effect of store design on customer purchase decision and the underlying mechanism of effective design, an empirical study was conducted. It was composed of two major parts: the first is to assess the quality of store design in terms of their functions; the second is to analyze consumer choice of electronic stores. Design quality was assessed by judgments of the consumer and expert. Consumer choice was measured in three ways: consumer’s purchase decision, their
Discussions and conclusion
In summary, the paper examined the effect of design quality on consumer choice of electronic bookstores. We adopted a consumer’s perspective in web store design and used the EKB model to identify potential design features critical to consumer purchases. These features were then classified as motivators, hygiene factors, and media richness factors based on their support of the on-line shopping activities. Empirical findings indicate that design quality is as important as product price, and more
Acknowledgements
The research was partially supported by a grant from National Science Council of Taiwan. The authors thank anonymous referees for their helpful comments. An earlier edition was presented at the Fourth Cross-strait Conference on Information Management held at Hong Kong in June 1998.
Ting-Peng Liang is Dean of Academic Affairs and Director of the Electronic Commerce Research Center of the National Sun Yat-sen University in Kaohsiung, Taiwan. He received his doctoral degree in information systems from the Wharton School of the University of Pennsylvania. Prior to joining the university, he had taught at the University of Illinois and Purdue University. His research interests include electronic commerce, knowledge management, and intelligent decision support systems. He has
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Ting-Peng Liang is Dean of Academic Affairs and Director of the Electronic Commerce Research Center of the National Sun Yat-sen University in Kaohsiung, Taiwan. He received his doctoral degree in information systems from the Wharton School of the University of Pennsylvania. Prior to joining the university, he had taught at the University of Illinois and Purdue University. His research interests include electronic commerce, knowledge management, and intelligent decision support systems. He has published more than 40 articles in journals such as Management Science, MIS Quarterly, Journal of MIS, Decision Support Systems and Information & Management. He has also served on the editorial board of many journals.
Hung-Jen Lai received his doctoral degree from National Sun Yat-sen University. His research interests include electronic commerce and intelligent systems. His works have been published in several journals and conference proceedings.