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Impact of Value‐Added Service Features in e‐Retailing Processes: An Econometric Analysis of Web Site Functions
Author(s) -
HaoChun Chuang Howard,
Lu Guanyi,
Peng David Xiaosong,
Heim Gregory R.
Publication year - 2014
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/deci.12105
Subject(s) - revenue , order (exchange) , business , service (business) , value (mathematics) , marketing , sales management , econometric model , industrial organization , econometrics , economics , computer science , accounting , finance , machine learning
We examine the impact of three classes of Web site functions ( foundational , customer‐centered , and value‐added ) upon e‐retailer performance. Using secondary panel data for 2007–2009 on operating characteristics of over 600 e‐retailers, our econometric analysis finds that only the value‐added service functions are positively associated with changes in e‐retail sales revenues across time. We also observe a decreasing marginal impact of deploying additional value‐added service features. To account for possible alternate explanations, we control for firm‐ and time‐specific fixed effects, merchant types, merchandise categories, and order fulfillment strategies. By further decomposing e‐retail sales revenues into Web site traffic, conversion rate, and average order value, we find that Web site functions affect e‐retail sales revenues mainly through their impact on Web site traffic. Our investigation demonstrates the empirical research usefulness of the Voss conceptual e‐service sand cone model. Our results identify for managers where to focus ongoing e‐retailing system development efforts, yet suggest that focusing too many retailing capabilities on exploratory and experimental value‐added service features may backfire, potentially leading to worsening e‐retailer performance.