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E-commerce Web site design: strategies and models
H. Joseph Wen
New Jersey Institute of Technology, Newark, New Jersey, USA
Houn-Gee Chen
National Chung-Cheng University, Chia-Yi, Taiwan
Hsin-Ginn Hwang
National Chung-Cheng University, Chia-Yi, Taiwan
Introduction
The Web is one of the most revolutionarytechnologies that changes the businessenvironment and has a dramatic impact onthe future of electronic commerce (EC). Thefuture of EC will accelerate the shift of thepower toward the consumer, which will leadto fundamental changes in the waycompanies relate to their customers andcompete with one another (Slywotzky, 2000).The immense popularity of the Internet inrecent years has been fueled largely by theprospect of performing business on-line.More and more companies set up their owncorporate LANs by Intranet, apply Extranetand Internet to work collaboratively withtheir customers, suppliers, and partners.The Internet can bring down physicalbarriers to commerce, almost immediatelygiving even the smallest business access tountapped markets around the world. At thesame time, consumers can conduct businessand make purchases from companiespreviously unavailable to them.Furthermore, companies are able to placemarketing material on Internet serversranging from simple advertising tocomprehensive virtual brochures. In today’sglobal marketplace, fast reliable informationis a necessity for most companies to attainsome kind of competitive advantage. Forinstance, companies can create a virtualmarketplace in which to sell their products.This virtual market is untapped and couldreach millions of users on the Internet 24hours a day.Electronic commerce is defined as buyingand selling of product, services orinformation via computer networks, mainlythe Internet. As the fastest growing facet of the Internet and other informationtechnologies, EC offers functionality and newways of doing business that no company canafford to ignore. The basis for moving to anelectronic commerce is a belief thatelectronic markets have the potential to bemore efficient in developing newinformation-based goods and services,finding global customers and tradingpartners to conduct business. Electroniccommerce via the Internet or the nextgeneration Internet Protocol, IPv6, willchange business institutions, operations andproducts/services as we know today, just asthe telephone, TV, fax, and e-mail changedthe way businesses and consumerscommunicate. Electronic commerce hasbecome very popular because of the benefitsand the convenience it brings along. Asshown in Table I, the benefits includeproduct promotion, cost saving, timelyinformation, shortened remittance time,information consistency, better customerservice, better customer relationship,customization of products, competitiveadvantages, and convenience of doingbusiness.Electronic commerce is no longer analternative, it is an imperative. The onlychoice open is whether to start quickly orslowly. Many companies are still strugglingwith the most basic problem: what is the bestEC model? Unfortunately, there is no simpleanswer for this question. Even companies inthe same industry, of the same size, or withsimilar cultures are finding that one ECmodel does not fit all. Companies arerequired to review their EC models andrethink strategy in order to capitalize on thechanging dynamics of the marketplace. Thepurpose of this article is to examine thecurrently available EC models and helpreaders to figure out the best way to makemoney in the EC era.
The research register for this journal is available at
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The current issue and full text archive of this journal is available at
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[5]
Information Management &Computer Security9/1 [
2001
] 5±12
#
MCB University Press[
ISSN 0968-5227
]
Keywords
Business strategy, E-commerce,World Wide Web, Marketing,Model, Design
Abstract
The rapid adoption of the Web as acommercial medium has causedfirms to experiment withinnovative ways of doing business.Those firms that effectivelymarket themselves on the Webhave a distinct advantage. Thispaper presents two e-commerceWeb site design strategies and 12e-commerce models for gainingthat advantage.
 
Background
Hoffman
et al
. (1995) proposed a structuralframework for examining the explosion incommercial activity on the Web. The studyleads to a new classification of currentcommercial Web site designs as:
.
online storefront;
.
Internet presence;
.
content;
.
mall;
.
incentive site; and
.
search agent.The authors examined the Web site designsin the context of integrated marketing andfacilitated greater understanding of the Webas a commercial medium. This study, as wellas those by Ju-Pak (1999) and Griffith andKrampf (1998) essentially perform Web sitecontent analysis from an Internet marketingpoint of view.Kalakota and Whinston (1996) classifiedadvertising, sales, and customer service asthe main consumer-oriented electroniccommerce activities. In addition, Cappel andMyerscough (1996) identified five differentways that a ``for-profit’’ company may use theWeb for:1 market awareness;2 customer support;3 sales;4 advertising; and5 electronic information services.Liu
et al
. (1997) examined Web sites of US
 Fortune
500 companies to provide a statusreport of Web usage by these companies.They concluded that about 93 per cent of the
 Fortune
500 companies display theirproducts and services on their Web sites,and about 26 per cent of them provide forsome type of online business with theircustomers through their Web sites. A studyof 250 US
Fortune
500 Web sites, conductedby Palmer and Griffith (1998), illustrate thepowerful impact that the Web has made onmarketing practices. The authors arguedthat Web-based marketing activities and itssite design are driven by the interactionamong the firm’s market offering,marketing activities and technical
Table I
The benefits of electronic commerce
Benefit DescriptionProduct promotion
Through a direct, information-rich and interactive contact with customers, ECenhances the promotion of products. Electronic medium also allows interactivity andcustomization for advertising content, based on the customer profile or input. ECthus offers an opportunity for new promotion strategies, enhancing the branding of products
Cost saving
By using a public shared infrastructure such as the Internet and digitallytransmitting and reusing information, EC systems lower the cost of deliveringinformation to customers, including personnel, phone, postage, and printing costs
Timely information
Due to their instantaneous nature, EC systems allow a reduction of the cycle timerequired to produce and deliver information and services.
Shortened remittance time
With electronic funds transfer (EFT), customers send their remittances electronicallyto the company’s bank. This arrangement eliminates the time delay associated withthe remittance in the mail system
Information consistency
EC ensures the consistency and accuracy of information through sharing of information and use of electronic forms for doing business
Better customer service
The ability to provide on-line answers to problems through resolution guides,archives of commonly encountered problems and electronic mail interaction 24hours a day, 365 days a year, builds customer confidence and retention
Better customerrelationship
EC enables the learning about customers due to its ability to record every event inwhich a customer asks for information about a product, buys one, requests customerservice, etc. Through these interactions, the needs of the customer are identifiedand will feed future marketing efforts
Customization of products
The information-based nature of the EC processes allows for new products to becreated or existing products to be customized based on customers’ exact needs.
Competitive advantages
EC enables a company to achieve competitive advantages of: cost saving based onreduced advertising/promotion costs; product differentiation by customizingproducts and timely response to market; customer focus through better customerrelationships and better customer services
Convenience of doingbusiness
There is no limit on time and location to conduct a business with related parties.The information delivered to manufacturers, suppliers and warehouses is almost realtime
[6]
H. Joseph Wen,Houn-Gee Chen andHsin-Ginn Hwang
E-commerce Web site design:strategies and models 
Information Management &Computer Security9/1 [2001] 5±12
 
characteristics. The marketing activitiesused in the study to examine corporate Websites are:
.
promotional activities;
.
sales;
.
service; and
.
support.From the seller’s perspective, Angehrn (1997)proposed the ICDT model for analyzing andclassifying EC strategies. The modeldescribes four virtual business spaces,namely:1 virtual information space;2 virtual communication space;3 virtual distribution space; and4 virtual transaction space.Based on the model, the authors suggest fourEC strategies that are further refined by thelevel of sophistication and customization of the Web site design.Watson
et al
. (1998) coined the concept of ``attractors.’’ An attractor is a Web site withthe potential to attract and interact with arelatively large number of visitors in atarget stakeholder group. Authors visitedmany Web sites and use metaphors to labeland group sites into eight potentialattactors:1 the entertainment park;2 the archive;3 exclusive sponsorship;4 the town hall;5 the club;6 the gift shop;7 the freeway intersection; and8 the customer service center.They argued that the strategic use of hard-to-imitate attractors is a key factor in on-linemarketing and creating an attractor willbecome a key component of the strategy of some companies.The EC models for commercial Web sitedesign to be examined in this article aresimilar to some of the models in the previousstudies. However, we introduce a widerrange of available models, extracted from thecurrent commercial Web sites, than anyprevious studies. In addition, all models arediscussed based on two different Web sitedesign strategies, informational/communicational strategy and on-line/transactional strategy.
Web site design strategy
Web design has evolved from static hypertextpublishing in the early days to dynamicmultimedia, Web database applicationservers. More importantly, new businessmodels that bring savings, revenues, andcustomer relationships are beingincorporated into commercial Web sitedesign. There are two generic Web sitedesign strategies:1 informational/communicational strategy;and2 on-line/transactional strategy,summarised in Table II.
Informational/communicational strategy
In the informational/communicationalstrategy, the Web is used to support but not toreplace a company’s main business activities.Companies do not limit themselves to justmarketingonthe Web.Asamatteroffact,theylook at other traditional media of advertisingand marketing study in order to meet theirbusiness goals and marketing objectives.Looking at Web marketing as another tool inthecompany’smarketing arsenal(Clark,1997),the informational/communicational design isthemost common use of Webmarketing today.Liu
et al
. (1997) report that 93 per cent of 
 Fortune
500 companies have publiclyaccessible sites, but fewer than26 per cent of those sites support transactions.On the other hand, there is no doubt thatinformational/communicationaldesignontheWebcan alsoproduce significantsalesinotherareas of business. For example, Insight Direct,adiscountcomputercatalogersellingmostlytobusiness, generates only 10per cent of its salesfrom its on-line catalog, but more than 75 percent of its new customers come from the site.
On-line/transactional strategy
The on-line/transactional strategyinvariably provides an electronic catalog of products for sale. Visitors can browsethrough the catalog and order products on-line. Although the informational/communicational design often provides anelectronic catalog as well as orderinginformation (e.g. by phone, fax, or e-mail), itdoes not support on-line transaction. Withouton-line ordering Web database capability, ithardly exploits the potential of the Web as aninteractive medium.The on-line/transactional strategy is whatmost proponents of marketing on the Webexpect. Griffith and Krampf (1998) indicatedthattheabilitytoenhanceacompany’soverallsales was a significant decision factor toestablish a Web site. Although there are stillsome hidden obstacles (e.g. transactionsecurity), it seems that most companies arelikely to benefit directly from marketing onthe Web, especially for small and medium-sized enterprises. In fact, there have been a lotof successful on-line/transactional designs,such as Amazon.com and Virtual Vineyards.The number of successful enterprises is
[7]
H. Joseph Wen,Houn-Gee Chen andHsin-Ginn Hwang
E-commerce Web site design:strategies and models 
Information Management &Computer Security9/1 [2001] 5±12
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