Boffins tout formula for e-commerce success

An international research team has devised what it claims is a "simple method " for assessing the success of internet shops and e-commerce sites.

Naveen Donthu, of the Robinson College of Business at Georgia State University, and Paul Alpar, of the School of Business Administration and Economics at the Philipps University in Marburg, Germany, measured and compared how well e-commerce sites transform their inputs into outputs.

The researchers explained that a shopping website is a computer information system and a sales channel.

Alpar and Donthu used 'data envelopment analysis' to obtain a performance benchmark for a range of internet shops.

The data sources included results from a web crawler, website visitor statistics collected by a market research firm, and a measurement of visitors' perceptions of the sites.

The proprietors of e-shops "desperately" need measures of whether they are succeeding or not, according to Alpar and Donthu.

They claim that early measurements focusing only on the number of visitors to an e-shop, plus the click-through rates or the conversion rates, can help provide insights only into whether an advertising campaign has worked.

Such metrics do not, however, take into account the efforts associated with creating and running the sites, and offer little information about the economic success of the sites.

The team said that the two areas of measured success - the technical variables (information content and site usage) and the marketing variables (perceived website quality and intention to purchase) - have to be brought together for a definitive analysis.

Alpar and Donthu have now investigated 37 websites in the clothes and accessories sector and combined both aspects of success - technical and marketing - to evaluate each site.

"One of the advantages of big department stores in the physical world is their offering of 'everything under one roof'," said Alpar.

"This advantage does not count online since moving from one speciality shop to another does not take more time than moving from one department to another of the same store.

"Consumers may reason 'I'll look for product X at shop A because they are likely to carry it'.

"On the internet, most consumers enter a store via a search engine or even a price comparison site because this leads them quickly and directly to the products they are looking for."