INFORMATION TO USERS

INFORMATION TO USERS

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M©MM a a s t r i c h t s c h o o l o f M a n a g e m e n t

ORGANIZATION OF INFORMATION

AND PROCESSES FOR ELECTRONIC RETAILING:

A STUDY BASED ON USABILITY AND

CONSUMER DECISION-MAKING PROCESSES

CHAN Kah Sing

(Malaysia)

A dissertation submitted in partial fulfillment of the requirements of the degree of Doctor of Business Administration (DBA)

awarded by the Maastricht School of Management (MSM),The Netherlands (30 Aug 2001).

©2001


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UMI Number: 3024399

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Doctoral Supervisors (Promoters)

1. Prof. dr. Dragan A. Nikolik, PhD

2. Prof. dr. Jan C. van Dalen, PhD

Evaluation Committee

1. Prof. dr. Luc Soete, DPhil

2. Prof. dr. Rita M. Walczuch, PhD

MSM

Universiteit Wageningen

MSM/Universiteit Maastricht

Universiteit Maastricht

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PREFACE

Background and Motivations for this Study. Before entering the academic profession, I

spent just over ten years working in the information technology line. During this period, I

was involved in computer hardware and software development work ranging from

mainframes to personal computers. Subsequently, I was involved in developing software

solutions for business. It was here that I worked with users, and I learned to understand

their frustrations towards computer applications and technology.

Then came the Internet. The emergence of the Web as a business mechanism

generated much hype. However, it is very frustrating to note that businesses are not

making proper use of the Web. It is even more frustrating to note the way computer

technology is changing, which I believe, is bringing more stress to users than ever.

Although I will not deny that the Web will continue to have a huge impact on the

way consumers shop, I embarked on this study to contribute, in some way or other,

towards a less stressful electronic shopping experience.

Acknowledgements. I wish to express my sincere appreciation to my supervisor and main

promoter, Prof. dr. Dragan A. Nikolik (of the Maastricht School of Management), my co

promoter, Prof. dr. Jan C. van Dalen (of Universiteit Wageningen); and the Associate

Dean for DBA studies, Prof. dr. Kami S. P. Rwegasira (of the Maastricht School of

Management) for their guidance, encouragement, and support throughout this study.

Their broad range of knowledge and insightful critiques provided excellent guidance for

shaping the ideas of this study.

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Preface

I also wish to thank Prof. dr. Rajiv Jayashankar, Prof. dr. Leo M. J. H. van Geffen,

and Prof dr. Harald Sander (all of the Maastricht School of Management) for their

guidance and advice throughout the doctoral seminars held in 1999; Prof. dr. Sirkka L.

Jarvenpaa (of the University of Texas at Austin) and Assoc Prof dr. Jane E. Klobas (of

the Curtin University of Technology, Australia) for providing me copies of their research

papers; Prof. dr. Leonie Still (of the University of Western Australia), Prof. dr. Douglas

R. Harvey (of Charles Sturt University, Australia), and Dr. Tan Check Meng (of the

Singapore Polytechnic) for their help in the initial stages of this study; the 400 students of

the School of Business, Singapore Polytechnic, for carrying out the pilot tests and

usability test exercise held from Aug 1999 to Sep 2000; and to Mdm. Lee Wai Leng and

Mr. Joel Loh for assisting in the supervision of the tests.

Finally, my warmest appreciation and gratitude goes to my wife Tang Wai Ling, my

daughter Chan Wing Yi, my father Chan Kam Loon, and my mother Mong Kwai Chee.

Their support, encouragement, and belief in me have been very important in assisting my

completion of this study. 1 am grateful for the sacrifices that they have made on my

behalf, and I dedicate this dissertation to them.

CHAN Kah Sing 12 June 2001Maastricht, The Netherlands

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CONTENTS

PREFACE.......................................................................................................................iii

LIST OF ILLUSTRATIONS............................................................................................x

LIST OF TABLES.......................................................................................................... xi

ABSTRACT....................................................................... xiii

Chapter

1. INTRODUCTION............................................................................................... 1

I. I Overview of this Study........................................................................... 1

1.2 Major Definitions......................................................................................2

1.3 Background of the Phenomenon................................................................3

1.4 Problem Definition................................................................................... 9

1.5 Major Assumptions.................................................................................10

1.6 Research Questions and Hypotheses........................................................11

1.7 Scope of this Study..................................................................................13

1.8 Significance of this Study....................................................................... 15

2. LITERATURE REVIEW...................................................................................17

2.1 Overview of this Chapter.........................................................................17

2.2 Review o f Usability Concepts.................................................................. 18

2.3 Review of Consumer Behaviour Concepts...............................................24

3. CONCEPTUAL FRAMEWORK.......................................................................52

3.1 Overview of this Chapter........................................................................ 52

3.2 Formation of Research Hypotheses...........................................................52

3.3 Formation of Research Objectives............................................................56

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Contents

Chapter Page

4. RESEARCH METHOD.................................................................................... 60

4.1 Overview of this Chapter....................................................... 60

4.2 Major Definitions................................................................................... 60

4.3 Research Design and Method for RO1 .................................................... 61

4.4 Research Design and Method for R 0 2 .................................................... 62




4.8 Research Design and Method for R 0 6 .....................................................75

4.9 Research Design and Method for R 0 7 .....................................................78

4.10 Research Design and Method for R 08 .....................................................81

5. RESEARCH IMPLEMENTATION................................................................... 82

5.1 Overview of this Chapter........................................................................82

5.2 Preliminary Work....................................................................................82

5.3 Usability Test Exercise............................................................................86

5.4 Examination of Measurement Method and Observations........................ 90

6. RESULTS.......................................................................................................... 96

6.1 Overview of this Chapter........................................................................96

6.2 Variations in Usability Scores................................................................. 96

6.3 Variations in Site Architectures (Part 1: Organization of Information)...104

6.4 Variations in Site Architectures (Part 2: Organization of Processes) 115

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Contents

Chapter Page

7. DISCUSSIONS...............................................................................................119

7.1 Overview of this Chapter......................................................................119

7.2 Discussions on R 07..............................................................................120

7.3 Discussions on R08 (Part I: Discussion Framework)........................... 127

7.4 Discussions on R08 (Part 2: Information Search).................................129

7.5 Discussions on R08 (Part 3 : Evaluation of Alternatives)...................... 144

7.6 Discussions on R08 (Part 4: Conclusions from the Discussions)..........154

7.7 Integration of the Findings from RO I, R07, and R08.......................... 155

7.8 Implications of the Results.................................................................... 166

8. CONCLUSIONS AND RECOMMENDATIONS.......................................... 171

8.1 Overview of this Chapter...................................................................... 171

8.2 Conclusions...........................................................................................171

8.3 Recommendations................................................................................. 176

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Contents

Appendix....................................................................................................................Page

A. PRODUCT GROUPS.....................................................................................180

A. 1 Overview of this Appendix.................................................................. 180

A.2 Method................................................................................................ 180

A.3 Results of Product Groupings................................................................180

B. TEST USER PROFILE...................................................................................183

B. 1 Overview of this Appendix.................................................................. 183

B.2 Test User Profiles.................................................................................183

C. USABILITY TASKS.......................................................................................187

C. 1 Overview of this Appendix.................................................................. 187

C.2 Usability Task Concept........................................................................ 187

C.3 Usability Tasks.....................................................................................187

D. USABILITY TASK QUESTIONNAIRE.........................................................201

D. 1 Overview o f this Appendix.................................................................. 201

D.2 Questionnaire Design Concept............................................................. 201

D.3 Review of Statistical Analyses............................................................. 202

D.4 Method................................................................................................ 203

D.5 Questionnaire Set “A” (for Pilot Test 1)...............................................206

D.6 Questionnaire Set “B” (for Pilot Test 2 ) ...............................................209

D.7 Questionnaire Set “C” (for Usability Tests).......................................... 212

D.8 Validity and Reliability of Measurement.............................................. 218

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Contents

Appendix.................................................................................................................... Page

E. USABILITY TEST EXERCISE...................................................................... 227

E. I Overview of this Appendix............................................................... 227

E.2 Usability Test Plan........................................ 227

E.3 Determination of Sample Size...............................................................230

E.4 Data Integrity........................................................................................ 232

E.5 Variations of Results due to Tasks and Test Users............................... 234

F. USABILITY TEST RESULTS FOR STORES................................................ 243

F. I Overview o f this Appendix...................................................................243

F.2 Variations in Usability Scores...............................................................243

G. USABILITY TEST RESULTS FOR PRODUCTS.......................................... 251

G. I Overview of this Appendix...................................................................251

G.2 Variations in Usability Scores............................................................... 251

H. USABILITY TEST RESULTS FOR INFORMATION ITEMS....................... 302

H.l Overview of this Appendix................................................................... 302

H.2 Multiple Regression Analysis............................................................... 302

REFERENCES............................................................................................................ 309

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LIST OF ILLUSTRATIONS

Figure Page

1. Assumed Chain of Events contributing to the Slow Proliferation andConsumer Acceptance of Electronic Stores as a Business Mechanism............. 10

2. Sample of Site Architecture (walmart).............................................................. 64

3. Test User Profile Questionnaire......................................................................... 67

4. Usability Task Questionnaire............................................................................ 72

5. Example of Product Details (bluelight)............................................................ 122

6. Example of Product Categories (shopsports) ....................................................129

7. Example of a Browse Mechanism (proflowers) ................................................132

8. Example of a Browse Process (jcpenney)......................................................... 133

9. Examples of Basic Search Mechanisms (barnesandnoble and borders)............136

10. Examples of Search Outcomes (vitamins and vitaminconnection).................... 138

11. Example of an Advance Search Mechanism (800.com).................................... 141

12. Example of Consumer Education (vitamin-planet) ...........................................142

13. Example of Product Specifications (I-800-electro)..........................................145

14. Example of a “Compare” Feature (gateway).....................................................148

15. Example of Product Reviews (amazon) ............................................................149

16. Example of a Help Page (us.buy)......................................................................151

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LIST OF TABLES

Table Page

1. Usability Components......................................................................................19

2. Advantages and Disadvantages of Product Assortment Strategies................... 35

3. Variations in Consumer Decision Processes.................................................... 38

4. Relationships between Product Categorization, Consumer Involvement,and the Stages and Categories of Decision-Making Processes..........................39

5. Major Types of Decision-Making Criteria for Products....................................44

6. Summary of Basic Consumer Decision-Making Rules.....................................46

7. Sample Usability Task............................................................... 69

8. Experimental Design Forms for Usability Test Exercise.................................. 76

9. List of Products and Electronic Stores selected for Usability Testing...............83

10. Test User Profile: Gender and Age Group of Respondents............................... 85

11. Profile of Usability Test Exercise..................................................................... 88

12. Issues on the Conduct of Usability Tests.......................................................... 89

13. Threats to Internal Validity and Measures taken to Minimize their Effects 91

14. The Effects of Products and Sites on Usability Scores...................................... 97

15. Usability Scores from Tests on Different Products on a Specific Store.............99

16. Usability Scores from Tests on Different Sites for a Specific Product.............101

17. Implementations o f Home Pages: Major Items............................................... 104

18. Implementations o f Home Pages: Visible Areas..............................................106

19. Implementations o f Common Navigation Bars: Major Items.......................... 107

20. Implementations of Site Maps.........................................................................108

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List of Tables

Table Page

21. Implementations of Help Pages: Major Items.............................................. ..109

22. Implementations of Search Mechanisms........................................................ 111

23. Implementations of Product Details Pages: Major Items................................ 112

24. Implementations of Shopping Carts: Major Items...........................................113

25. Items that affect Usability Scores Significantly..............................................115

26. Implementations of Search Processes..............................................................116

27. Implementations of Browse Processes..................... ..................................... 117

28. Selected Items with Low Adoption Rates.......................................................124

29. Distinctive Items in “High Usability” Stores...................................................125

30. Framework for Discussing R 08..................................................................... 128

31. Examples for Product Group PG1 (Knowledge and Entertainment Products).. 156

32. Examples for Product Group PG2 (Technical Equipment).............................. 158

33. Examples for Product Group PG3 (Non-Technical Equipment).......................159

34. Examples for Product Group PG4 (Wearable Products).................................. 160

35. Examples for Product Group PG5 (Medicinal and Beauty Products)............... 161

36. Examples for Product Group PG6 (Perishable, Non-Edible Products)............. 163

37. Examples for Product Group PG7 (Perishable, Edible Products).....................164

38. Examples for Product Group PG8 (Toys and Souvenir-type Products)............ 165

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ABSTRACT

This study was an applied research conducted to determine how the perceived usability of

an electronic retail store could be improved by the organization of information and

processes. This came about in the wake of an unexpected slow proliferation of Web-based

electronic retailing in the late 1990s.

An inter-disciplinary approach was taken, which involved the basic principles of

why and how consumers shop (as addressed by consumer decision-making) and how

people interact with computer interfaces (as addressed by usability). The focus was on the

organization of information and structure of processes programmed in electronic stores.

Specifically, the problem defined in this study was as follows:

“As consumers encounter inconsistent processes in electronic stores, they need to put in additional efforts to leam and understand these processes. The learning process is further aggravated when the processes consumers need to go through are significantly different from conventional purchase and decision-making processes that they are used to in the physical marketplace. This contributes to the negative perception consumers have towards Web shopping.”

The research hypotheses of this study were as follows:

HI: ‘The perceived usability of an electronic store is affected by its organizationof information and processes.”

H2: “The perceived usability of an electronic store is explained by thecompatibility of its organization of information and processes with theories of consumer decision-making.”

Twenty-five products were selected and they were categorized into eight product

groups based on the nature of the information required for consumer decision-making.

From these products, seventy-one stores were selected. The information items, features,

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Abstract

and site architecture of each store were documented in the form of models of electronic

processes.

The preparation work involved the creation of usability tasks for each product and

the development of the usability task questionnaire to capture quantitative indicators for

the perceived usability construct. The usability test exercise involved 334 test users,

which resulted in 3518 valid observations. The observations were inspected for integrity

and appropriateness for statistical analysis.

The preliminary investigation of the observations revealed that usability scores

were not significantly affected by the use of different tasks for testing, and the test users’

age and gender. However, differences in the competence of test users with respect to

computer and Internet use, familiarity with the product, conventional shopping process

and site operations, significantly affected the results.

Statistical analyses revealed that there were significant differences in usability

scores between stores, and that the usability of stores was dependent on the product.

Collectively, the results were used to investigate how the variations in the organization of

information and processes influenced usability scores. For this purpose, the concept of

“relative usability” was introduced.

The stores for each product were divided into two categories termed “high

usability” and “low usability” stores. The organization of information and processes of

the stores were compared within and across these categories. Descriptive and inferential

evidences showed that usability scores were, to a certain extent, influenced by the

presence of certain information items or features, and by the organization o f processes.

As usability scores have been established as the quantitative measure of the perceived

usability construct, these results provided sufficient evidence to HI.

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Abstract

Having established the evidences for HI, theories of consumer decision-making

and related practices were used to analyze and explain the findings. The information

items identified as distinctive to “high usability” stores were investigated and their

contribution to “high usability” could be explained by theories and related practices from

the physical marketplace. The discussion was on the relevance of the organization of

information and processes to the consumer’s decision-making tasks at the stages of

information search and evaluation of alternatives. On the overall, the discussions

provided sufficient evidences to H2.

Following this, the evidences from HI and H2 were integrated with the proposed

product groups. By analyzing the characteristics of each product group, this study

suggested that it is possible to adopt common store designs for the different products

within a product group.

On consolidating the findings and discussions, several recommendations were

outlined. Basically they were practical extensions derived from the research method of

this study. It was built on the concept that an understanding of consumer decision-making

in the physical marketplace can effectively influence design to an extent that electronic

stores are usable to consumers. By promoting usability, this could change the current

negative perception of consumers towards electronic retailing.

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CHAPTER 1

INTRODUCTION

1.1 Overview of this Study

This study was an applied research conducted to determine how the perceived usability of

an electronic retail store could be improved by the organization of information and

processes. It was based on the primary research hypothesis (HI), which states that “the

perceived usability of an electronic store is affected by its organization of information and

processes.”

An empirical process was developed to study whether such relationships existed for

a sample of electronic stores. Usability tests were carried out by a sample o f consumers

from a particular demographic group. This process can be replicated in practice for

evaluating existing stores or designing new ones for other consumer groups. In effect, this

serves as a basis for improving the perceived usability of electronic stores so that they are

more acceptable by consumers as a business mechanism.

This empirical process was supported by analyses using appropriate theories and

practices from the disciplines of usability and consumer behaviour. Theories were used

here to provide explanatory backing for decisions on organizing information and

processes. It was based on the secondary research hypothesis (H2), which states that “the

perceived usability of an electronic store is explained by the compatibility of its

organization of information and processes with theories of consumer decision-making.”

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Chapter 1. Introduction 2

1.2 Major Definitions

The definitions of major terms used in this study are as follows:

“Electronic Commerce ” refers to the strategic integration and deployment of

business methodologies, electronic and information technologies to satisfy business

objectives.

“Electronic Retailing" refers to business activities conducted through a computer

interface leading to the acquisition of products or services by consumers for their

personal, family, or household use. This is also known as business-to-consumer electronic

commerce.

“Consumer, ” “Customer,, ” "Buyer, ” and “Purchaser ” refer to an individual who is

involved in the acquisition of a product or service. Specifically, the term “consumer” is

sometimes taken to mean an individual who consumes a product or uses a service,

whereas a “customer,” a “buyer,” or a “purchaser” is the one who carries out the purchase

process. Depending on the context, these terms were used interchangeably. Generally, the

term “consumer” has been often taken to mean “customer,” “buyer,” or “purchaser,”

probably because of its use in the established terms of “consumer behaviour” and

“consumer decision-making.”

“User” refers to an individual who uses a computer system. In this case, this term is

also taken to mean “consumer” when referring to the use of a computer system for the

purchasing process.

“ Web ” refers to the World Wide Web service of the Internet, where a user interacts

with a computer application through a multimedia computer interface.

“Electronic Store," “Electronic Retail Store," and “Store " refer to Web sites

implemented primarily for electronic retailing. Such sites typically consist o f a series of


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Chapter I. Introduction 3

interconnected Web pages. In contrast, the terms “Web site” or “site” are usually used in

a more general context that is not confined to electronic retailing applications.

‘Web Shopping" refers to consumer shopping through electronic stores, covering

purchase activities and related interactions. This is the electronic equivalent of physical

shopping at retail outlets.

"Process" refers to the electronic transactions and navigation sequences

programmed on electronic stores to facilitate Web shopping.

“Usability" refers to the capability of a system that allows users to fulfill a

specified range of tasks easily and effectively, within a specified range of environmental

scenarios (adapted from Shackel (1984)).

1.3 Background of the Phenomenon

This study arose from a problem expressed by many businesses on the unexpected slow

proliferation of electronic retailing in the late 1990s. Typically known as business-to-

consumer electronic commerce, its take-off was considered slow compared to the

reported success of similar husiness-to-business initiatives around the same period. This

phenomenon came into being a few years after the mid-1990s’ worldwide hype of the

Web being a key facilitator of global consumer business.

The Web was touted to have the potential of radically changing the characteristics

of direct marketing (Hoffman and Novak 1996) and retail store patronage (Peterson,

Balasubramanian, and Bronnenberg 1997) as it is a global, direct, and interactive

multimedia channel that is not bounded by time or geography. It was also argued as being

able to provide greater shopping convenience, greater consumer control, and is potentially

more sense stimulating than traditional retail channels (Hoffman and Novak 1996). In


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Chapter 1. Introduction 4

many countries, interest in the Web picked up rapidly with increasing number of users.

Many businesses were convinced of the Web’s potential and low entry costs for reaching

out to a global marketplace. Therefore, they made increasingly large investments in Web-

based technologies (Palmer and Griffith 1998).

However, many consumers were not readily accepting the Web as a preferred

business mechanism as much as businesses had hoped. As an indication, research in the

USA in 1997, showed that browsing and information search occur relatively frequently in

over 60 percent of Web users, but only 17 percent engaged in actual buying activity

(Jarvenpaa and Todd 1999). Common consumer concerns were the limited range and

higher prices of products and services, problems and unfamiliarity with computer

hardware and software, accessibility, response speed, security risks, lack of anonymity,

and lack of confidence in the system. Such negative perceptions contributed to the

consumers’ reluctance to readily accept Web shopping.

Of particular interest to this study were four observations described below.

Consolidation of these observations led to the formation of two research questions that

were addressed by this study.

Inconsistencies in the Design and Quality o f Electronic Stores. Although Web shopping

reduces physical effort and provides flexibility and access, it is not necessarily perceived

to save time spent on shopping or to reduce levels o f aggravation (Jarvenpaa and Todd

1999). For instance, consumers complained about the many steps to locate a specific item

and were particularly frustrated in situations of goal-directed shopping. Lohse and Spiller

(1998) cited common design problems as limited and inconsistent menus, poorly designed


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navigation, no facilities for product comparisons, poor quality images, and major delays

in delivering audio, animation, graphics, and video.

There is a general perception that Web application development is fast, easy and

decentralized (Gupta and Pitkow 1995; Levi and Conrad 1997). For a quick start to Web

applications, recommendations and “best practices” are found in Web design guidebooks

for beginners and practitioners. However, many of such recommendations lack evidence

o f having being derived from established knowledge or theories. From an academic point

o f view, such recommendations are suspect because they could be based on

unsubstantiated practice. This could lead to ineffective designs.

There is also very little control over the quality of Web content and applications.

Many developers seemed to be more concerned with physical attractiveness and user

enjoyment rather than usability. As a result, it is common to see the expression of design

creativity through features like fanciful graphics and multimedia being misused at the

expense o f usability. On the whole, many electronic stores are poorly designed,

aggravated with inconsistencies and variations, and this confuses and frustrates

consumers.

Many Electronic Stores do not meet User Expectations. According to Schwartz (1997,

19), a study by the IT research organization, Gartner Group, found that 90 percent of first-

generation Web sites were created “without asking existing consumers what they

wanted.” In fact, there is more to just addressing user requirements, and that is to meet

their expectations. In the established practice of developing conventional computer

systems, developers usually determine user requirements by interviewing them and

studying their existing tasks. This is then translated into computer systems following


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established structured systems analysis and design methods. However, this is not

practically possible for electronic stores because, considering the global audience of the

Web, their users are no longer limited to a manageable and easily definable group. The

user base covers people with a wide variety of interests, concerns, skills, culture, socio

economic and educational levels.

Notably, most of the development and implementation of electronic stores are

spearheaded by technologists. According to Rubin (1994,4), developers are traditionally

more comfortable working with the seemingly scientific and concrete aspects of systems

than with the more ambiguous aspects of humans. Also, there is an underlying

assumption that since humans are so inherently flexible and adaptable, it is easier to let

them adapt to the machine rather than the other way round. As a result, many computer

applications do not fit the way people think or work. This makes computer tasks more

frustrating than they need be (Norman 1998,99).

Humans tend to fight change. They thrive best in a predictable environment that is

responsive to their needs, and one which keeps life as uncomplicated as possible.

However, technology interferes with human nature on this very basic level (Weil and

Rosen 1997,8). As wonderful as technology can be, it takes time and patience for users to

acquire the knowledge and skills necessary to use them properly and efficiently. The

effect of unusable technology, coupled with the tendency of humans to resist change, will

result in user frustrations and failures (Weil and Rosen 1997,4-5). The frustrations that

people experience have a cumulative negative impact on psychological and physical

health. This effect has been referred to as “technostress,” a term coined by Brod (1984) to

mean “a modem disease of adaptation caused by an inability to cope with new computer

technologies.”


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