Chapter X Converting Browsers to Buyers: Key Considerations in Designing Business-to-Consumer Web Sites

X Converting Browsersto Buyers Key Considerations in Designing Business to Consumer Web Sites

C. Ranganathan
University of Illinois Chicago, USA

Elizabeth E. Grandon
Emporia State University, USA


In this chapter we explore the key elements in designing business-to-consumer Web sites. We synthesize the results of two independent research studies to delve upon the important considerations in developing and designing effective online retail sites. We examine Web site design from two perspectives. First, we examine how consumers view online Web sites and what factors they look for in effective retail sites. Second, we explore the top retail Web sites and identify the elements making up the top retailing Web sites. Then, we identify the gaps in current Web site practices and the online consumer expectations. Finally, we reflect upon this analysis to propose some important considerations in designing an effective online business-to-consumer Web site.


The Internet has created a completely new way of interacting and transacting with consumers. Customers are also adopting Web technologies and the Internet at an unprecedented rate. In order to garner a share of the online marketplace, both traditional retail firms as well as pure Internet firms are rapidly implementing a diverse set of strategies to capture the attention of online consumers. The growth of online commerce is simply astonishing. The Census Bureau of the Department of Commerce (2003) reported an increase of over 27.8% in retail e-commerce sales in the second quarter of 2003 from the second quarter of 2002 and an increase of 11.2 % in total retail e-commerce sales from the prior quarter of 2003. An estimate by Forrester Research (2003) expects online retail sales to grow at a steady 19% year-over-year rate from 2003 to 2008. It also predicts that nearly 5 million new US households will shop online in each of the next five years, totaling 63 million US online shopping households in 2008.

In addition to businesses, there has been a rapid adoption of the Internet by consumers for various purposes. For example, a study by the Georgia Institute of Technology (Kehoe et al., 1998) reported that about 40% of the respondents indicated shopping as their primary use of the Web. Another study by Ernst & Young (1998) found that over 39 million individuals shopped online in 1998, with more than 50% of them spending US$500 or more on their online purchases. A more recent study by eMarketer (2002) stated that online shopping expenditures in the USA are going to increase 15% from 2002 to 2003 and 12% from 2003 to 2004.

In an effort to garner a share of this growing online market, many traditional firms as well as firms are evaluating different ways to improve their Web presence and succeed in their online initiatives. However, despite their efforts, online sales still represent only a tiny fraction of total retail sales. The Census Bureau of the Department of E-commerce (2003) reported that e-commerce retail sales accounted for only 1.5% of total sales in the first and second quarter of 2003. Surveys have identified significant hurdles in luring consumers to make online purchases. For example, a study by Creative Good, Inc. found that 43% of online purchase attempts failed because consumers either had trouble finding products in the firm’s Web site, or the electronic checkout process made the purchase too difficult to complete (Verton, 2000). Moreover, in another survey conducted by AT Kearney, 52% of survey respondents reported that they did not complete an online purchase due to the huge amount of information they were asked to provide. In addition, it was found that four of five consumers abandon attempts to purchase products online due to poor Web site design and functionality (Calkins et al., 2000).

The success of companies such as Dell computers, and Ebay, and failure of many others in online commerce serves as a wake-up call for other firms trying to engage in online retailing. How to win consumers online is a question weighing heavily in the minds of several executives today. Since the Web site forms the primary medium for interacting with consumers and enacting all marketing and selling transactions, effective Web site design has come to the forefront of attention. In this chapter, we focus on the key features that potentially differentiate effective, winning Web sites from ineffective ones.

In order to understand the issues involved in designing effective Web sites, we take a dual approach. First, taking a consumer perspective, we examine what consumers look for in online retail sites and what features they feel are important in retail sites. Second, taking a business viewpoint, we examine the best selling Web sites and investigate the key features they have incorporated in their Web sites. The collective wisdom gained from these two approaches should provide some insights into effective retail Web site design for other businesses as well as for scholars.

In subsequent sections, we summarize the results from two independent research studies that have focused on Web site design from consumer and business perspectives. The first study examines the key characteristics of business-to-consumer (B2C) Web sites as perceived by online consumers. The second one explores the top retail Web sites and identifies the more influencing characteristics of the Web sites on online retail sales. From these two studies, we analyze the common features that make a successful Web site as well as their relative importance as perceived by online consumers and as shown by their impact on online sales. Along with this, we examine the gaps between current Web site practices and the online consumer expectations. Based on these analyses, we conclude the chapter by providing some prescriptive suggestions for designing an effective online B2C Web site.

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 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 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 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.


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., 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.


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).

Table 10-1: B2C Web site dimensions, items, relative importance, and reliability







Provision for alternate, non-online modes for financial transactions



Opportunity to create individual accounts with logon-id and password


Availability of secure modes for transmitting information


Overall concern about security of transactions over the Internet





Hesitation in sharing personal information over the Web



Gathering of personal information


Attitude toward sites that demand personal information


Presence of statement on how personal information collected will be used





Completeness of information provided about firm, products and services



Availability of options to communicate and interact with the organization


Availability of information to compare across alternatives


Availability of decision making aids





Time taken for navigation



Ease of navigation for information search


Presence of visual presentation aids (graphics, audio, video)

Best Practices of Online Retailers

In another related study, we examined the best selling Web sites and, assessed the nature and extent 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 ( 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.

Table 10-2: B2C Web site characteristics

Web site characteristics



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?


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?


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?


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).

Table 10-3: Relative importance of B2C dimensions and underlying Web site characteristics


Standardized Beta Coefficients





Provision for having individual accounts and password



Availability of secure modes of data transmission



Presence of mechanisms for making online as well as off-line financial transactions






Frequent update of content



Information on the firm



Presence of FAQ section



Presence of decision aids






Presence and content of privacy statement






Use of multimedia (negatively associated with online sales)


* p<0.1; ** p<0.05; ***p<0.01

Lessons Learned

What Web site characteristics make a successful B2C Web site? Heaps of product information? Slick graphics? Security? Or safeguarding consumer privacy? While there have been numerous suggestions and guidelines for creating effective Web sites, only few businesses have been successful in turning browsers into buyers. These companies have mastered the art of effective Web site, using it as a key value proposition to lure, attract and convince consumers.

Although a consumer’s entire experience with a company influences the likelihood of a purchase, the Web site characteristics play a vital role as they form the primary interface of consumer interactions and communications. Based on the two studies we conducted, several lessons emerge for retailers considering online selling.

The consumer survey revealed four broad dimensions underlying B2C sites and their relative importance. Each of these dimensions is important, and neglecting even one of these dimensions could prove detrimental to the online business of merchants. Online consumers seem to expect rich, up-to-date and complete information on products, services and the merchant, and they want it in an easy-to-use and navigable interface. These findings are consistent with Madeja and Schoder (2003). They found that in order to attract and retain surfers, merchants should focus on frequently updating the Web site content, providing rich content, and ensuring that the navigation features are easy to use. Similarly, it is important to ensure that the graphics and multimedia do not mar their online surfing and buying experience. As Hoque and Lohse (1999) pointed out and as mentioned by Yeung and Lu (2004), “the long download time associated with video has often been regarded as undesirable for commercial Web sites” (p. 492). While the presence of aids to make the purchasing decision possible is welcome by consumers, they are only secondary to pertinent product and service information. Also, in order to establish the credibility of vendors, it is important to provide detailed contact information and multiple methods through which consumers could reach out and interact with the merchants.

Consumers want multiple channels of dialog with the company — both online mechanisms such as e-mail and chat, as well as off-line mechanisms such as telephone conversations. The advantage of having multiple modes of communication is that this gives the merchant added credibility that most pure-play, fly-by-night Internet companies often lack.

Though consumers are increasingly using the Internet for online purchasing, their confidence in online shopping is likely to be shattered if their sensitive personal and financial information is not closely guarded. Consumer trust has become a key element in building confidence in the Web site and needs to be placed at the heart of a firm’s Internet strategy. However, several retailers do not seem to have realized the importance of building online consumer trust. As Urban et al. (2000, p. 40) note:

“Most sites on the Internet today do not focus on building trust as a part of an ongoing relationship with their customers. Many Web sites act merely as self-service catalogs: if you know what you’re looking for, you can find and order the product or service. Such sites are commonly characterized by their crowded format, flashing banner-ads, and off-price promotions. Pursuing the hard sell, these sites do not give customers much information or help in making buying decisions. Not, surprisingly they convert few of their visitors into purchasers, suffer low customer retention, and generate meager profits. Many companies have failed with such an approach to marketing on the Internet, primarily because they have failed to build trust.”

Apart from providing good content on a Web site, and presenting it using an effective design, customer trust can be won only by providing consumers with a secure, and private shopping experience. Therefore, security and privacy become key elements in building B2C Web sites. In fact, our research pointed to security being the topmost concern in the minds of consumers, and its importance in determining the likelihood of consumer purchase. While the consumer survey revealed security to be the dominant dimension affecting the online purchase intention of consumers, our analysis of best selling Web sites, reiterated and revalidated our findings from the survey. Security emerged as the most critical construct, affecting the purchase intentions as well as online sales.

Many options are available for implementing secure payment mechanisms and for conducting secure online transactions on the Web. While most online retailers use commonly available security protocols, what differentiates an effective online retailer from ineffective ones is the extent to which the site is able to alleviate the fears in the minds of consumers, and build consumer trust. Online consumers engaging in shopping need to feel confident that their information and transactions are secure. For achieving this, merely implementing some security mechanisms may not be sufficient. An online merchant needs to use multiple mechanisms and cues for convincing the consumers that their information would be safe. Our studies revealed that consumers might feel more comfortable to conduct online transactions in environments where they are provided with multiple modes of making payments, and in those sites that give them additional security with password protected log-on mechanisms.

Online retailers should also take measures to ensure that the information provided by consumers will be kept confidential and will not be shared with or provided to other third parties. One of the interesting challenges for any business trying to engage in online commerce relates to collection and analysis of customer information. While the Web paves an easy way to gather a wealth of information about consumers, potential misuse of this information could turn off the customers. Many online consumers may be hesitant to transact with a site that they feel could infringe upon their privacy. Online merchants should have a clear policy on how they would handle and secure the information gathered about the consumers. More importantly, businesses should also take adequate steps to make its customers aware of the privacy policies. Explicit privacy statements that explain why and how the information collected would be used will go a long way in enhancing the consumer trust. Since many online consumers are little aware of the privacy seals such as TRUSTe, clear privacy policies and strict adherence to them becomes key in winning customer confidence. Our survey results confirmed privacy to be a very important dimension that needed to be considered in building Web sites, and our analysis of best practices of online retailers pointed out to the importance of privacy policies over the third-party privacy seals.

While there is proliferation of firms that seek to sell their products and services online, there are several important challenges remain in creating, designing and managing their Web sites. If online merchants will have to attract and retain their consumers, and realize a good return on their investments, they will have to have build Web sites that are informative, well-designed and trust-generating. Our research studies have shown content, design, security and privacy to be the four cornerstones of an effective B2C Web site design. Companies that want to be successful in their e-business efforts must focus on these four critical dimensions in order to attract and retain their consumers. This will be key to their survival and success in future.


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Section I - Consumer Behavior in Web-Based Commerce

Section II - Web Site Usability and Interface Design

Section III - Systems Design for Electronic Commerce

Section IV - Customer Trust and Loyalty Online

Section V - Social and Legal Influences on Web Marketing and Online Consumers

Web Systems Design and Online Consumer Behavior
Web Systems Design and Online Consumer Behavior
ISBN: 1591403278
EAN: 2147483647
Year: 2004
Pages: 180 © 2008-2020.
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