Factors affecting e-tailing website effectiveness: An Indian Perspective

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1 Factors affecting e-tailing website effectiveness: An Indian Perspective Ankit Sharma, Yatendra Kumar Singhal, Dhawal Makhija, Anuj Kumar Goyal, Naman Agarwal Information Technology Management Indian Institute of Information Technology and Management Gwalior, India {ankitsharma.iiitm, yatendraiiitm, dhawalmakhija, goyal.anuj, Abstract The Indian Retail Market is witnessing a revolution. The growth of internet has enabled the new retail format of the virtual retailer to emerge and forced the existing retailers to consider e-tailing model of retailing as well. A large number of consumers frequently use the Internet for shopping purposes but its not clear what drives them to shop online. This study captures the important factors affecting the success and effectiveness of e-tailing sites to propose a unifying framework that could eventually guide research in this area and prove beneficial for e-tailers and e-marketers as well. Keywords- a framework on online consumer behavior, B2C, e- commerce, e-tailing, internet marketing, website effectiveness. I. INTRODUCTION The Indian Retail Market is witnessing a revolution. The increased consumer demand, increasing availability of real estate, allowing of FDI in retail and rationalizing of the tax structure are creating the foundation for significant growth in the organized retail sector which is projected to grow at the rate of 25%-30% p.a. and is estimated to reach Rs billion by 2010 [8]. In such a scenario of rapid growth, the preparedness of Indian retailers in terms of having appropriate formats, scalable processes, appropriate technology and relevant organization capability will be crucial to their success. The retailers should move now or fore go prime locations and market positions that will become saturated quickly. Moreover the growth of internet has enabled the new retail format of the virtual retailer to emerge and forced the existing retailers to consider this model of retailing as well. From the perspective of retailers, e-commerce offers efficiencies in the form of increased market access and information and decreased operating and procurement costs [31]. The e-tailing business model isn t bound by operational timings, geographical boundaries and can cater to country wide markets at a comparative miniscule cost. Internet shopping fulfils several consumer needs more effectively and efficiently than conventional shopping [14]. With the recent emergence of the electronic business-toconsumer (B2C) marketplace, attention is now focused on the Internet, fuelling speculation about the actual size, growth and future potential of the 'internet retail market' [30,34]. The Internet offers an audience that will grow to a 100 million users Dr. Arti Bakhshi Department of Psychology University of Jammu Jammu, India artibakhshi@gmail.com by 2007 in India [16]. The e-commerce transactions in India are expected to cross the Rs 23 billion mark in which translates into an increase of over 300% from financial year [16]. Moreover 55% of visitors to e-commerce sites in India have adopted the Internet as a shopping medium [16]. As Internet costs go down and broadband penetration goes up, this segment will experience a leap [17]. Online shopping is catching up, the biggest driver being the range and availability of thousands of products at competitive prices [17]. The Online World is a place that keeps on growing rapidly as more consumers and companies embrace the now cheap, accessible and ubiquitous broadband technology. Due to all these factors internet retailing has firmly established itself as a viable alternative to store-based shopping in a relatively short span of time. All the indications are that this pace of development is likely to continue and will have a significant impact on the store based retailing. So if marketers are to capitalize on this marketing opportunity, they need to better understand how the online stimulus cues generated by their websites influence consumer shopping experiences and website patronage [1]. Therefore businesses must boost their efforts to fine-tune operations and lure back existing customers or be left behind. A large number of consumers frequently use the Internet for shopping purposes but its not clear what drives them to shop online and how do the retailers distinguish themselves from one another. Therefore, a framework is needed to structure the complex system of effects of different factors, and develop an in-depth understanding of consumers attitudes toward Internet shopping and their intentions to shop online. This study provides analysis and recommendations to help understand online retailing in India to win over customers that this medium can provide to the retailers. The study proposes a framework to increase retailers and e-marketers understanding of consumers attitudes toward online shopping and hence the success of an e-tailing website. II. LITERATURE REVIEW Prior literature provides us with a rich foundation on which to build a research framework for the study of online consumer behavior. The most experienced and successful e- commerce companies are beginning to realize that key determinants of

2 success or failure are not merely web presence or low price but delivering high quality of e-services [35]. It is demonstrated by past research findings that prior online shopping experiences have a direct impact on Internet shopping intentions [10,37]. Consumer trust and consumer satisfaction are the key antecedents of continued purchase [23]. The most fundamental factor for sales revenue is customer satisfaction [15]. Product delivery has the strongest influence on customers' satisfaction and future purchase intentions [19]. Online shopping features can be either consumers perceptions of functional and utilitarian dimensions, like ease of use and usefulness, or their perceptions of emotional and hedonic dimensions like enjoyment [28]. In addition to these relevant online shopping features, other factors in this context are consumer traits [4], product characteristics [14, 11], previous online shopping experiences [10] and trust in online shopping [24, 39]. Relevant demographic factors age, gender, education, and income [4] also has a significant moderating effect on the consumer attitude towards online shopping and thus the success of the e-tailing sites. As a result of this fact 46% of online shoppers in India are in the age group and 85% of the total online shoppers are male [16]. The influence of age is noticeable by the fact that compared to older consumers, younger adults, are more interested in using new technologies, like the Internet, to find out about new products, search for product information, and compare and evaluate alternatives [38]. So age of the consumer does affect the overall effectiveness and the success of the e-tailing website. Higher educated consumers are more comfortable using non-store channels, like the Internet to shop [4]. So 54% of Indian online shoppers are at an executive level, 24% of online shoppers are professionals or self employed and 67% of online shoppers have shopped online as recently as 3 months showcasing the growing acceptance of e-commerce in India [16]. In the online shopping context, consumers also evaluate their Internet shopping experiences in terms of perceptions regarding product information, form of payment, delivery terms, service offered, risk involved, privacy, security, personalization, visual appeal, navigation, entertainment and enjoyment [4, 27, 29]. Recent surveys reveal that it's important for online retailers to make their sites simple, clear, and efficient [19]. Usability considerations should be of prime importance in the design of an e-tailing websites. While the number of e-commerce web sites has increased rapidly over the last three years, the satisfaction of e-commerce users has generally decreased [22]. One of the challenges with e-commerce web sites is the need to implement them rapidly, before the next competitor can bring up its web site [22]. This results in too little attention being paid to human factors that affect whether a web site can be used easily, accurately, and without losing user interest [22]. Site characteristics like search functions, download speed and navigation also play a role in shaping ease of use of the website [40] thus affecting its success. A number of web specific factors including navigation [5, 26], interface [13], security [12], accessibility [25], social presence [2] and online shopping aid [20] have been widely investigated in these prior studies. Online shopping offers a high level of convenience for those whose time costs are perceived to be too high to invest in conventional shopping [14]. Brand/ Reputation [18] and service quality [32] are also important in affecting online purchase intentions. General feedback on the web site design, competitive price of the product, merchandise availability, merchandise condition, on-time delivery, merchandise return policy, customer support, e- mail confirmation on customer order, promotion activities are the factors affecting the e-satisfaction and thereby the overall success of the e-tailing site [35]. An e- retail set-up requires extensive sourcing capabilities, warehousing capacity, and a robust and efficient logistic back end [17]. The level of e- satisfaction is also determined by the quality of e-services, the price level and the purchase process [36]. Finally, Internet retailers must ensure that consumers have a positive shopping experience each time the consumer visits the online store [21]. Consumers decisions whether or not to shop online are also influenced by the type of product or service under consideration. The lack of physical contact and assistance in shopping on the Internet is one factor that influences this suitability. Another factor is the need to feel, touch, smell, or ability to try the product, which is not possible when shopping online [9]. Books, electronic gadgets, railway tickets, apparels, gifts, computers and peripherals, airline tickets, movies, music have the highest potential to be considered when shopping [16] on the Internet, especially since quality uncertainty in such products is virtually absent, and no physical assistance or pretrial is needed [14]. Personal care products like perfume and lotion, or products that require personal knowledge or experience like computers and cars, are less likely to be considered while shopping online [11]. However, in case of standardized and familiar goods, or certain sensitivity products that require a level of privacy and anonymity, consumers intention to shop on the Internet is high [14]. So product characteristics are an important factor for ascertaining the success of an e-tailing website. Lack of trust is one of the most frequently cited reasons for consumers not shopping on the internet [24]. Security and privacy have an impact on consumer trust in shopping on the internet [24]. The apprehensions of the customers regarding the security for online transactions and authenticity of goods are curtailing the success of the e-tailing model. The key reason for its low acceptance is the unwillingness of the Indian people to use credit cards for online purchases [17]. More and more sophisticated online customers would rather pay a higher price to e-tailers who provide high quality e-service. Thus, in order for consumers to engage in trust-related Internet behavior like online shopping, the e-vendor must make trust-building interventions such as posting a privacy policy, use a third-party seal, interact with customers, advertise its good reputation, link to other reputable sites, or offer guarantees [7]. In the current scenario the consumer's attitude towards Internet and online shopping has become increasingly positive over the years and as more Indians get access to the Internet and understand the medium, there is increased awareness and trust in shopping online [17].

3 III. RESEARCH MODEL FOR E-TAILING WEBSITE EFFECTIVENESS Electronic retailing involves major changes in the traditional retailing business system and philosophy so retailers need to be careful before embarking on an online retailing strategy. The failures of a number of internet retailers suggest that some caution needs to be exercised regarding the potential of electronic shopping. Store based retailers need to seriously consider how they can employ the internet in their business strategy ranging from information-only sites to the e-tailing websites. The extensive literature survey suggests that no prior India centric study has been attempted thus far to ascertain the effectiveness of the e-tailing website in relation to the attitudes of the Indian consumers. So for developing an in-depth understanding of consumers attitudes toward e-tailing sites we built up a framework (refer Figure 1), named ete (e-tailing effectiveness) model based on the literature review on online consumer behavior for internet retailing. According to ete model the effectiveness of an e-tailing site is determined by the users perception towards using this technology. The ete model originally identifies four determinants of a users perception towards retailing over the internet. We attempt to associate these four determinants together to develop a framework for e-tailing effectiveness. A. Website Effectiveness The first determinant is website effectiveness, and refers to the ability of the website to create an attractive presence that meets the objectives of the business. The factors proposed to act as significant determinants for website effectiveness are ease of use, navigation structure, web design and interface, accessibility, privacy and security, reliability and flexibility, customized content, updated and socially acceptable information, efficient search options, and multilingual translations. The ease of use refers to the availability of help file, FAQs, visual and online shopping aids for increasing the ease of shopping for the customer. Moreover the website should possess pleasing visuals and the text size, text color, text font must be conducive to reading to enhance the website effectiveness. B. Product Characteristics The second determinant of the user perception is the "product characteristics". We integrate five factors into product characteristics namely product type, product information, brand reputation, depth of product line and product availability. The products which possess less quality uncertainty and require minimal experience to be purchased tend to do well in e-tailing thus affecting its overall success. The need for special items and attractiveness of alternatives available to the consumer also affects the product characteristics thereby affecting the users' perception. C. Product Delivery Users perception is also determined by "product delivery". Six key product delivery characteristics are timeliness and accuracy of the delivery, condition of the order, fair delivery terms, packaging and order tracking. The care that online retailers exhibit in packing items for shipment is extremely important factor in determining the "product delivery" as the condition of the delivered product depends on it. D. Complaints Redressal Another salient determinant of user perception is the "complaints redressal" mechanism adopted by the e-tailer in case of a service failure. The factors proposed to act as noteworthy determinants for complaints redressal mechanism are after sales service, customer support, feedback and error reporting, fair return policies and compensation. In addition to these four factors the following factors also affect the users' perception: relevant demographic details, previous online shopping experience, product pricing and trust on the e-tailer but these factors are internal to the user. So website effectiveness, product characteristics, product delivery, complaints redressal along with users' perception are integrated into our ete model to form a framework to study the success and effectiveness of e-tailing websites. IV. RESEARCH METHODOLOGY In our present study, questionnaires were used to survey the opinions of e-tailing website users who had recently visited commercial websites. The purpose of the study was to sample their opinions in order to determine the critical success factors of e-tailing website effectiveness. Based on the literature, we developed and tested a questionnaire that solicited information from the respondents regarding the factors affecting e-tailing website effectiveness. The questionnaire was pre-tested on seven experienced website users by using the personal interview method. The seven users were asked to evaluate and critique each item on the questionnaire on the basis of question content, wording, sequence, form, layout, question difficulty, and instructions. The necessary corrections were made before the instrument was administered to the participants. Based on the feedback from these seven evaluators, the authors developed a 34-item survey instrument for this study. The participants in the survey were university students which included many students having work experience as well. To qualify for participation in the study, the participants must have made at least three e-tailing transactions. Students turned out to be the most valuable participants as they were convenient to access and they seemed to use the internet more frequently to shop and obtain information than non-students. V. RESULTS AND CONCLUSION The study was conducted during September-October Three hundred (300) questionnaires were distributed to participants out of whom two hundred and thirty four (nearly 78%) usable questionnaires were returned and used in the study. The coverage was diverse (refer Table 1) and transcended an age, gender and education bias. The demographic characteristics of the respondents are provided in Table 1.

4 e-tailing effectiveness (ete) Ease of use Navigation structure Web design Accessibility Privacy and security Reliability and flexibility Customized content Updated, socially acceptable information Efficient search options Multilingual translations Product type Product information Brand Reputation Product line depth Product availability Website Effectiveness Product Characteristic User perception Demographi cs Details Online shopping experience Product pricing Trust on e- tailer Product Delivery Complaint Redressal Timeliness Accuracy of delivery Condition of the order Fair delivery terms Packaging Order tracking After sales services Customer support Feed back Fair return policies Compensation Figure 1. ete model The respondents were mostly young people; however a significant portion (~26%) were older, students with work experience. The men respondents were almost equal to the number of women respondents. In terms of how frequently the respondents use the internet, almost one-half of the respondents reported daily use. The location of the internet usage was roughly evenly divided between home/hostel, work, and both. The income level of the participants was lower than average because most of them were undergraduate students who either have no source of income or work part time. The e-tailing customers were asked on a Likert scale to express their opinions and perceptions. Respondent s data was collected and analyzed; with simple descriptive statistics we were able to find the critical success factors of e-tailing effectiveness. Eleven "website effectiveness" factors were tested but only four were found to have significant impact (refer table 2) on "website effectiveness", namely accessibility, privacy and security, efficient search options and updated information. The customers are not only concerned about privacy issues from outside threats such as hackers, but they are also concerned about online retailers sharing their personal information. The retailers must also ensure that the websites have no network congestion and have favorable download speeds thus attracting customers for purchasing products. The websites must have updated information regarding the prices and products to enhance the e-tailing website effectiveness. The survey also suggests that an efficient search options enabling the customer to find the desired product also enhances the customer satisfaction. The e-tailing website users ranked product availability as the most important factor followed by the brand reputation, product information as the significant factors affecting the "product characteristics". The reason why customers are inclined towards internet shopping is because of the wide availability of merchandise. The brand reputation of the product line on offer by the e-tailer and availability of exact information like price, brand, delivery time, and shipping cost also have a strong bearing on the e-tailing website effectiveness. One of the most important aspects of the quality of the online retail experience is the delivery of the purchase as it plays an extremely influential role in determining the customer intentions to use an online retailer in the future. In that perspective we found that according to the e-tailing customers, timeliness of the order plays a significant role in "product delivery". The results also indicate that fair delivery terms and accuracy of the delivery are critical for "product delivery". It suggests that customer want a shorter time frame between ordering and the final delivery of the product. Customer also expects that they will receive the exact product they ordered. Fair delivery terms refer that all the terms and conditions are clearly defined by the retailer and there are no hidden costs while purchasing the product online. The result of the present study also indicate that fair and transparent return policies, customer support are vital for "complaint redressal" in case of a service failure from the retailer. So an online retailer should make sure that its policies and procedures are fair, transparent and clearly stated so that the customer knows what to expect when a failure occurs. Better customer support would increase trust on the retailer thus increasing the chances of future transactions. So our framework captures the important factors affecting the success of e-tailing sites. It could guide research in this area and prove beneficial for e-tailers and e-marketers as well. The framework enables retailers to assess the features that specifically attract consumers to shop on the Internet. The Indian customers are significantly under-served and there s room for many players [33].

5 TABLE I. DEMOGRAPHICS OF PARTICIPANTS Number Percentage Age Gender Male Female Use of Interest Several Times a Day One or two Times a Day A few times a Week Once a Week A few times a Month Once a Month Location of Internet use Home/Hostel Work Both Educational Level 2 years in college years college Post Graduate Doctorate Annual Income No income > So understanding consumers motivations and limitations to shop online is of major importance in e-tailing for making adequate strategic, technological, and marketing decisions to increase customer satisfaction, as well as improving web site design of virtual stores as there are essentially no switching costs in an online retail context. VI. LIMITATIONS AND FUTURE RESEARCH Given the rapid rate at which e-commerce is gaining importance in today's business environment, the findings in this study are expected to provide helpful guidelines to practitioners and researchers. Although ete model will prove to be a workable model for examining e-tailing effectiveness of websites it is necessary, however, for the purpose of defining more specific drivers of e-tailing effectiveness this model could be extended by incorporating additional factors in our framework. TABLE II. PERCENTAGE OF IMPORTANT FACTORS Percentage* Website effectiveness Accessibility 20.7 Privacy and security 17.2 Efficient search options 12.5 Updated Information 9.6 Product Characteristics Product Availability 29.6 Brand Reputation 22.2 Product Information 18.8 Product Delivery Timeliness 25.6 Fair delivery terms 18.3 Accuracy of delivery 16.3 Complaint Redressal Fair return policies 28.4 Customer Support 21.3 *Base=234(total usable questionnaires) However, we are confident that we have given an overview of the most relevant factors in this context. Moreover the results of the survey are limited by the sample size that responded to the survey as the data was gathered from university students. Further research from a wider range of web customers would have given even better sample for generalization. The study is preliminary and needs to be refined and verified further. The items that measure the e-tailing effectiveness may need to be worded differently until more studies are conducted to verify the findings of this study, practitioners are advised to apply these findings with caution. REFERENCES [1] Julie Baker, Liz Wang, Judy A Wagner, The role of atmospherics in e- tailing, in Proc. American Marketing Association Conference, Vol. 13, Chicago, 2002, pp. 106 [2] I. Benbasat, N. Kumar, "Shopping as Experience and Web Site as a Social Actor: Web Interface Design and Para-Social Presence," Proceedings of the Twenty- Information Systems, New Orleans, 2001, pp [3] E. Brynjolfsson, and M.D. Smith, Frictionless Commerce? A Comparison of Internet and Conventional Retailers, Management Science, vol. 46, no. 4, 2000, pp [4] R.R. Burke, Technology and the customer interface: what consumers want in the physical and virtual store, Journal of the Academy of Marketing Science, Sage Publications, Thousand Oaks, Calif., vol. 30, no. 4, 2002, pp [5] P.Y.K. Chau, G. Au, and K.Y. Tam, "Impact of Information Presentation Modes on Online Shopping: An Empirical Evaluation of a Broadband Interactive Shopping Service," Journal of Organizational Computing

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*ABV-Indian Institute of Information Technology and Management, Gwalior, , India.

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