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Nanyang Technological University, Singapore.

Signaling effect of website usability on repurchase

intention

Jiang, James; Klein, Gary; Pee, Loo Geok

2018

Pee, L. G., Jiang, J., & Klein, G. (2018). Signaling effect of website usability on repurchase
intention. International Journal of Information Management, 39, 228‑241.

https://hdl.handle.net/10356/89043

https://doi.org/10.1016/j.ijinfomgt.2017.12.010

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Cite as: L. G. Pee, J. J. Jiang, G. Klein (2018), Signaling Effect of Website Usability on Repurchase
Intention, International Journal of Information Management, 39, 228-241

Signaling Effect of Website Usability on Repurchase Intention

L. G. Pee, Nanyang Technological University, peelg@ntu.edu.sg

James Jiang, National Taiwan University

Gary Klein, University of Colorado

Abstract

After-sale service quality is a key to differentiating an online seller from numerous others and
attracting returning customers. However, new customers cannot readily discern the quality of
unfamiliar sellers. Sellers often try to reduce the information asymmetry and signal their quality
by ensuring good website interface usability, considering that the website is the main point of
contact with online shoppers. Most research on signaling has focused on its pre-purchase
effects. Although researchers have argued that signaling could affect future purchase decisions,
how signaling influences repurchase intention has not been detailed. This study proposes a
model of the influence based on the signaling theory and expectation-confirmation model. The
model posits that a signal influences an online shopper’s expectation and the expectation-
confirmation subsequently determines repurchase intention. The model was tested with pre-
purchase and post-purchase data collected in a two-stage survey and analyzed with structural
equation modeling. Findings indicate that signaling goes beyond the pre-purchase stage of
initial purchase to influence repurchase intention. This indicates that signaling has longer-term
effect than that typically examined in signaling research and further research on the effect is
needed. For practice, the findings indicate that online sellers need to send realistic signals to
attract returning customers.

Keywords: Website usability; signaling; online shopping; repurchase intention; information

need
 Signaling Effect of Website Usability on Repurchase Intention

L. G. Pee, Nanyang Technological University, peelg@ntu.edu.sg

James Jiang, National Taiwan University

Gary Klein, University of Colorado

Introduction
To ensure continual profitability, online sellers must acquire new customers and convert them
into repeat, repurchasing customers (Kim, Ferrin, & Rao, 2009; Shin, Chung, Oh, & Lee,
2013). The number of consumers shopping online in the United States is forecasted to grow to
270 million in 2020. This is expected to lead to online sales amounting to $523 billion, which
is a 56 percent increase from that in 2015 (Forrester Research Incorporated, 2015). While the
increase in online shoppers presents great opportunities, acquiring and retaining new customers
remain challenging for many online sellers (Fang, Wen, George, & Prybutok, 2016; Shin et al.,
2013).

A key challenge in acquiring new customers is overcoming information asymmetry,

which is the situation in which one party has less information than the other in a transaction
(Mavlanova, Benbunan-Fich, & Koufaris, 2012). When shoppers encounter an unfamiliar
online seller, they tend to lack information to accurately assess the seller’s qualities and they
are more hesitant to purchase (Schlosser, White, & Lloyd, 2006). This is further exacerbated
by the fact that online shopping is fully mediated by websites and there is often a greater time
lag between order and fulfillment compared to offline shopping. Online shoppers can only fully
assess the qualities of an unfamiliar seller after they commit to pay and experience how their
order is fulfilled. For example, prior to making a purchase, a shopper cannot accurately evaluate
sellers’ after-sale service quality. To avoid the risk of running into a poor-quality seller and
bad experience, the shopper may decide not to purchase. To mitigate this, sellers often try to
reduce the information asymmetry by conveying information about their qualities.

Signaling is an effective way for conveying information and reducing the information
asymmetry between online sellers and their new customers (Li, Fang, Wang, Lim, & Liang,
2015). Signals are observable, extrinsic cues that can convey credible information regarding
sellers’ unobservable qualities (Schlosser et al., 2006; Wells, Valacich, & Hess, 2011). Signals

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commonly used in online stores include those related to observable aspects of a website,
reputation, and warranty (Li et al., 2015; Mavlanova, Benbunan-Fich, & Lang, 2016; Zhang,
Li, Yan, & Johnston, 2017). These signals seek to assure new customers (i.e., the less-informed
party) that the seller is of good quality. They are expected to influence new customers’ beliefs
and purchase decisions. Among them, website-interface-related signals, such as website
quality, website design investments, and comprehensiveness of information (Li et al., 2015),
are technology artifacts that are of particular interest to electronic commerce and information
systems research. Therefore, we focus on website-interface-related signals in this study.

The focus of signaling research has been on signals’ effects on pre-purchase beliefs
(e.g., expected seller quality; review detailed in section 0) but researchers have argued that
signaling could go beyond the pre-purchase stage to influence future purchase decisions, such
as repurchase intention. Besharat (2010, p. 1242) argued that “signal acts as an indicator that
reduces the likelihood of a bad outcome for the buyer...Otherwise, consumers will punish the
brand by choosing not to repurchase”. Dutta and Biswas (2005, p. 76) stated that “signal
default might lower consumer repurchase intention”. Kirmani and Rao (2000, p. 70) argued
that “repeat purchase is likely to occur only if the claims about unobservable quality are true”.
At the same time, the expectation-confirmation theory (Parasuraman, Zeithaml, & Berry, 1985)
indicates that pre-purchase expectation of sellers’ service quality influences satisfaction and
subsequently repurchase intention, depending on whether the expectation is met (i.e.,
confirmed). Accordingly, we propose that a possible theoretical mechanism through which
signaling affects online shoppers’ repurchase intention is website-interface-related signal 
expectation of sellers’ service quality  expectation confirmation  satisfaction  repurchase
intention.

It is important for online sellers to signal their service quality to new customers because
service quality affects online shoppers’ willingness to purchase (Lee & Lin, 2005; Udo, Bagchi,
& Kirs, 2010). Service quality is also an important determinant of repurchase decisions in that
it helps a seller differentiates itself from other competitors. Sellers’ service quality refers to the
adequacy of after-sale service and support (e.g., order processing, delivery, security,
convenience; Chiu, Wang, Fang, & Huang, 2014). Exemplary service is the next sale in the
making and service quality can be a more important order winner than product quality (Abby,
Simon, & Matthew, 1994). In online shopping, shoppers can compare the offerings of
competing stores instantaneously with little effort and competitors are only a few clicks away
(Srinivasan, Anderson, & Ponnavolu, 2002). There has been a trend of commoditizing

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products, which emphasizes cost reduction over brand differentiation (Mathwick, Malhotra, &
Rigdon, 2001). Given that product quality and price are relatively easy to imitate by
competitors in electronic commerce, signaling service quality may be more fruitful for
attracting new customers, fostering strong relationships, and turning them into repeating
customers.

Since signaling seeks to convey information to online shoppers (Schlosser et al., 2006;
Wells et al., 2011), it is important to account for shoppers’ information need when studying the
effect of signaling. Shoppers who have a greater need for information are likely to be more
strongly affected by signals. Research on consumers’ information seeking behavior shows that
shoppers’ information need is mainly determined by the perceived risk of a purchase and their
prior online shopping experience (Aljukhadar & Senecal, 2016; Grant, Clarke, & Kyriazis,
2007; Mitra, Reiss, & Capella, 1999; Murray, 1991; Park & Stoel, 2005; Schmidt & Spreng,
1996; Shin et al., 2013). Similarly, in a study of signaling, Wells et al. (2011) suggests that
information asymmetry, characterized by pre-purchase information scarcity and post-purchase
information clarity, can vary depending on the extent to which the shopper is experienced.
Therefore, in the proposed model, we consider the moderating effect of online shoppers’
information need in terms of their perceived risk of a purchase and prior online shopping
experience.

In sum, this study looks beyond the pre-purchase effects of signaling and our objective
is to model and assess the effect of signaling on repurchase intention. We hypothesize that
website interface usability signals service quality and the signaling effect is moderated by
shoppers’ information need. The resultant service quality expectation should influence
repurchase intention, to the extent that it is confirmed and shoppers are satisfied, as posited by
the expectation-confirmation theory. We assessed the proposed model with data collected in a
longitudinal, two-stage survey of 213 online shoppers and found strong empirical support. This
study contributes to research by (1) revealing that signaling has a longer-term effect than that
typically examined in signaling research, (2) explaining the theoretical mechanism through
which signaling affects repurchase intention, and (3) identifying website usability as a
significant and manageable factor influencing the formation of service quality expectation in
online shopping. For practice, this study shows that signaling is more important than expected
in that it affects the initial purchase as well as future purchases. This study’s contributions to
research and practice are summarized in Table 1.

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Page 4
 Table 1. Preview of Study Contributions
Relevance
State of the Literature and Practice This Study’s Contribution Theory/
Practice
Empirics
Website-interface-related signals ‐ Signals have significant
influence pre-purchase beliefs such as influence beyond the pre-
expected company (i.e., seller) quality, purchase stage, on repurchase
expected product quality, trust, and intention  
purchase intention (Li et al., 2015; ‐ The effect can be explained in
Wells et al., 2011) terms of the expectation-
confirmation theory
Signaling effects have been The proposed model was
empirically assessed in cross-sectional empirically assessed with
studies, focusing on the pre-purchase longitudinal data collected in a 
stage (Li et al., 2015; Wells et al., two-stage survey (before and after
2011) a purchase)
Expected service quality is compared The formation of expected service
vis-à-vis actual service quality to quality is affected by website
 
determine satisfaction and usability (an observable aspect of
subsequently repurchase intention websites), through signaling

Conceptual Background
In this section, we first explain the nature of signals and how they convey unobservable
information and influence shopper’ expectation in the pre-purchase stage, based on the
signaling theory. This is followed by a discussion of website usability as a website-interface-
related signal in online shopping. The information need of online shoppers is then described.
We also provide an overview of the expectation-confirmation theory, which is useful for
explaining how repurchase intention is formed based on pre-purchase expectation.

Signaling Theory
The signaling theory posits that signals can help to reduce information asymmetry between
sellers and buyers in the pre-purchase stage of a transaction (Kirmani & Rao, 2000). Buyers
often lack information to accurately assess unfamiliar sellers’ quality prior to making a
purchase. Signals are observable cues that can convey information about sellers’ true quality
to buyers. Signals are generally extrinsic and can be confidently assessed by potential buyers
(Richardson, Dick, & Jain, 1994). Extrinsic cues are related but not inherent to the quality being
signaled. For example, to signal after-sale service quality, the ease of use of a website and depth
of product information provided would be extrinsic cues, while the size of customer service
staff would be an intrinsic cue. The latter is intrinsic because altering it will change after-sale
service quality directly. A signal with high confidence value is one that can be used and judged
by shoppers easily and accurately. The size of customer service staff may be a strong predictor

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of after-sale service quality, but buyers typically have less confidence in determining what the
appropriate size is. In comparison, the ease of use of a website can be more readily recognized
and evaluated by shoppers navigating the website.

A signal is useful for reducing information asymmetry when it is profitable for high-
quality sellers to send, but unprofitable for low-quality sellers. When high-quality sellers have
an incentive (i.e., tradeoff between cost and revenue) to send a signal and low-quality sellers
have disincentive to choose the same signal, use of the signal leads to a separating equilibrium
(Boulding & Kirmani, 1993). Shoppers can use the signal to separate (distinguish) the
unobservable type of sellers. To illustrate, the ease of use of website is a signal that is costly to
send because upfront investments are necessary to design and build an easy-to-use website.
High-quality sellers can expect to recoup the investments from future sales, while low-quality
sellers have little incentive to invest in the signal because their true qualities would soon be
known and sales would deteriorate quickly as customers do not return and negative words of
mouth spread exponentially in the online world (Wells et al., 2011). Assuming that sellers are
rational, they are likely to honor the level of quality conveyed through the signal because not
doing so is likely to be economically detrimental.

Website Usability as a Signal in Online Shopping

Usability is critical to the success of online shopping websites, affecting shoppers’ purchase-
related perceptions and decisions (e.g., Chen & Macredie, 2005; Flavián, Guinalíu, & Gurrea,
2006; Gould & Lewis, 1985; Green & Pearson, 2011; Marie, Olivier, & Benoit, 2001; Palmer,
2002). Usability research focuses on users’ perception of the functional and instrumental
qualities related to a website’s controllability and effectiveness, and highlights navigability and
organization of information to be the key aspects (Palmer, 2002). Usability refers to “the
perceived ease of navigating the site or making purchases through the Internet” (Flavián et al.,
2006, p. 2). Usability research distinguishes usability from website aesthetics, which reflects
non-instrumental qualities related to visual appearance and beauty (Thüring & Mahlke, 2007).
Human and computer interaction researchers acknowledge that usability and aesthetic do not
always coincide, as an overemphasis on aesthetic elements could degrade usability (Tractinsky,
1997).

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 Table 2. Website-Interface-Related Signals Examined in Online Shopping Studies
Study Signal studied Signal measure Signal outcome
Ahrholdt Product pictures, layout, Perception based, e.g., “I have the Trust-based
(2011) technical quality impression that the website offers intention to
a customer-friendly product transact
presentation with large product
pictures and/or a three-
dimensional representation”
Chen and Ease of use of website* Perception based, e.g., “Please Trust
Teng (2013) answer the following questions
according to the online travel
store: hard to use – easy to use”
Gregg and E-image (amount of Perception based, e.g., “The Willingness to
Walczak product information and information in this auction listing transact
(2008) presence of aesthetic is sufficiently detailed”
feature)
Kim, Xu, and Website ease of Perception based, e.g., “This Web Trust
Koh (2004) navigation, visual site is easy to use”, “This Web site
attractiveness; is easy to navigate”
Information relevance,
reliability, and adequacy
Li et al. Visual appeal, Objective, e.g., Deployment status Sales
(2015) information quality of two features: luxurious website
and detailed pictures (scale of 0 to
2)
Mavlanova Website amateurism, Objective, e.g., Presence of broken Purchase
(2015) website content quality links, typographical errors, intention
relevant information
Riasanow, Ye, Review content Perception-based, e.g., “Indicate Willingness to
and Goswami the extent to which you think the purchase
(2015) reviewers' opinions about the hotel
were positive”
Schlosser et Sophisticated website Perception-based, e.g., “The Trust and
al. (2006) technology and visual amount of effort devoted to purchase
design elements developing this website seems to intention
be very little – a great deal”
Wells et al. Navigability, download Perception-based, e.g., Perceived
(2011) delay, visual appeal “Navigating these web pages is product quality
easy for me” prior to
purchase
* Signals related to navigability and organization of information are in bold

In this study, we choose to focus on the signaling effect of website usability for several
reasons. First, the key aspects of website usability, website navigability and organization of
information (Palmer, 2002), are commonly identified as relevant website-interface-related
signals in prior studies of online shopping (see Table 2). Prior studies show that both aspects
have significant signaling effect and they send positive signals about a website. Since our
objective is to study the effect of signaling on repurchase intention rather than the significance
of specific signals, we focus on salient signals identified in prior studies.

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 Second, website usability qualifies as a signal because it can be directly observed and
confidently judged by online shoppers. By definition, usability focuses on users and their
tasks/goals, and users constitute the primary source of information about the usability of a
website (Gould & Lewis, 1985). The design of usability involves understanding what matters
to users, while the evaluation of usability is mainly informed by users’ performance, thoughts,
and attitudes as they carry out important tasks (Gould & Lewis, 1985). Usability is therefore
user-centered, noticeable and observable by users, and is best evaluated by users.

Third, as a signal, website usability is extrinsic to sellers’ after-sale service quality,

which is the unobservable information to be signaled in this study. As discussed earlier,
changes in website navigability and information organization would not directly alter actual
after-sale service quality. After-sale customer service quality can be conceptually distinguished
from website usability in that service goes beyond the website interface (Wolfinbarger & Gilly,
2003).

Fourth, ensuring website usability requires upfront investments by sellers (e.g., fee,
time, effort) to provide good navigability and information organization, and rational sellers
seek to recoup this investment through future sales (Wells et al., 2011). Therefore, a separating
equilibrium exists as shoppers can discern between websites of good and poor usability, and
infer that sellers sending a false signal would lose credence and not survive in the long term.

Like most prior studies of website (see the third column of Table 2), we focus on the
perception of a signal rather than whether a signal is sent by sellers or objectively exists. Recall
that observability, the extent to which shoppers are able to notice a signal, is one of the
important characteristics of efficacious signals (Boulding, Kalra, Staelin, & Zeithaml, 1993;
Connelly, Certo, Ireland, & Reutzel, 2011). If actions sellers take are not readily observed by
shoppers, it is difficult to use those actions to communicate information to shoppers (Connelly
et al., 2011). This suggests that when studying a signal and assessing its effect, it is more
important to focus on the extent to which customers observed and perceived it. In the context
of online shopping websites, this means that it is more appropriate to focus on users’ perception
of website usability after interacting with the website, compared to whether the certain
elements objectively exist on a website.

Focusing on the perception of website usability is also in line with our research
objective, which is to model and empirically assess the effect of signaling on repurchase
intention. Repurchase intention is perception-based/ idiosyncratic rather than objective.

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Therefore, we expect repurchase intention to be more strongly affected by users’ perceptions
of a website than by the objective existence of certain website elements. An aspect that is not
perceived by shoppers is unlikely to affect perceptions about related issues, such as repurchase
intention. A website might have been designed following a certain set of website design
guidelines, but this is unlikely to affect repurchase intention if the shopper did not notice it. It
is also unlikely to improve repurchase intention if the user did not perceive it favorably.

Our review also shows that prior research has focused on the effect of signals on
outcomes in the pre-purchase stage (see Table 2), such as trust (Kim et al., 2004), perceived
product quality prior to purchase (Wells et al., 2011), and willingness to purchase (Riasanow
et al., 2015). Although the signaling theory recognizes post-purchase information clarity, that
is, shoppers will have access to information for verifying pre-purchase signals by observing
sellers’ actual performance and behavior in fulfilling order (Connelly et al., 2011; Mavlanova
et al., 2012; Wells et al., 2011), there has been a lack of empirical studies on the outcomes of
verification. One exception is the study by Hu, Rabinovich, and Hou (2015), which focuses on
product guarantee as a signal and found that signaling has a significant effect on online
customer complaint intention. This study seeks to contribute to this line of inquiry by
examining the signaling effect of website usability on repurchase intention, which is a critical
outcome variable in online shopping research and practice.

Information Need of Online Shoppers

Since signaling seeks to reduce information asymmetry (Boulding & Kirmani, 1993),
shoppers’ use of signals to infer information about sellers is likely to be affected by their need
for information in the pre-purchase stage. Therefore, our proposed model accounts for the
effect of information need. Research on consumers’ information seeking behavior shows that
shoppers’ need for information is mainly determined by the perceived risk of a purchase and
their prior online shopping experience (Grant et al., 2007; Mitra et al., 1999; Murray, 1991;
Park & Stoel, 2005; Schmidt & Spreng, 1996).

Perceived risk of a purchase is the extent to which the buyer believes that a purchase
decision produces social or economic consequences that cannot be estimated with certainty
(Conchar, Zinkhan, Peters, & Olavarrieta, 2004). Risks related to financial loss and product
performance are frequently cited as reasons for not purchasing online (e.g., Forsythe & Shi,
2003). When perceived risk is high, buyers need more and better information to ensure that
correct purchase decisions are made and any possible loss is minimized (Schmidt & Spreng,

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1996). This suggests that buyers making high-risk purchases are likely to be more strongly
affected by the information conveyed in signals.

Prior experience with online shopping also affects the need for information.
Accumulation of experience contributes towards the development of better knowledge
structures or "schema" that are useful for future purchases (Rao & Monroe, 1988). Shoppers
with strong prior experience tend to believe that they have the relevant knowledge stored in
memory to evaluate purchases (Schmidt & Spreng, 1996) and this reduces their need to acquire
information compared to less experienced shoppers. In support, Shim, Eastlick, Lotz, and
Warrington (2001) noted that online shopping experience impacts the intention to search for
information. This indicates that more experienced shoppers are likely to be less affected by the
information conveyed in signals.

Expectation-Confirmation Theory
The expectation-confirmation theory explains how consumers form repurchase intention
(Bhattacherjee, 2001; Parasuraman et al., 1985). The theory posits that consumers assess the
pre-purchase expectation of service quality vis-à-vis the actual service performance after
purchase to determine the extent to which the expectation is confirmed (see Figure 1). The
higher the level of expectation, the more difficult it is to meet (i.e., confirm) the expectation.
Consumers form a satisfaction, or affect, based on the confirmation level and the expectation
on which that confirmation was based. Satisfied consumers form a stronger repurchase
intention, while dissatisfied consumers avoid purchasing again. The theory also suggests that
high-expectation consumers are likely to feel more satisfied than low-expectation consumers,
because expectation provides the reference level for consumers to evaluate service quality.
Based on the adaptation level theory, a high reference level or expectation tends to enhance
one’s attainable satisfaction (Bhattacherjee, 2001). Lower expectation and/or higher
performance result in greater confirmation, which in turn positively influences satisfaction and
repurchase intention. The reverse causes disconfirmation, dissatisfaction, and reduced
repurchase intention.

The expectation-confirmation theory has been widely applied in electronic commerce and
information systems research (Hossain & Quaddus, 2012; Kalia, 2016; McKinney, Yoon, &
Zahedi, 2002; Qazi, Tamjidyamcholo, Raj, Hardaker, & Standing, 2017; Valvi & West, 2013;
Wu & Huang, 2015) and detailed in several seminal articles (e.g., Bhattacherjee, 2001;
Parasuraman et al., 1985). Here, we illustrate the theory with an example of shopping online.

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Prior to making a purchase (t1 in Figure 1), a shopper first forms an (ex-ante) expectation of
the online seller’s after-sale service quality (“expectation” in Figure 1). Second, after the
purchase is fulfilled (t2 in Figure 1), the consumer forms a perception of the seller’s
performance based on the seller’s actual service quality (i.e., “perceived performance” in
Figure 1). Third, this perceived performance is compared with the pre-purchase expectation to
determine whether the expectation is confirmed (i.e., “confirmation” in Figure 1). There is
confirmation when the perceived performance meets or exceeds expectation. The better the
perceived performance, the greater the level of confirmation (i.e., positive relationship).
However, the higher the level of expectation, the more difficult it is for the expectation to be
met and confirmed (i.e., negative relationship). Fourth, the shopper is likely to be more satisfied
when the expectation is exceeded (i.e., level of confirmation is higher). Fifth, the level of
attainable satisfaction is also higher for consumers with a higher expectation, as suggested by
the adaptation theory (i.e., positive relationship). Sixth, higher level of satisfaction with service
quality should increase repurchase intention (i.e., positive relationship).

H4c (+)

H4a* (-)
H4d H4e

(+) (+)
H4b (+)

*The original figure has been slightly modified to mark the relationships using hypothesis
labels in this study. The hypotheses will be detailed in the next section.
Figure 1. Expectation-Confirmation Theory (Bhattacherjee, 2001; Parasuraman et al.,
1985)

Development of Research Model and Hypotheses

We draw on the signaling theory and expectation-confirmation theory to develop a model that
explains the signaling effect of website usability on repurchase intention. Based on the
signaling theory, we hypothesize that website usability signals after-sale service quality and
influences expected service quality (see Figure 2). Since signaling conveys information to
shoppers, the effect of signaling is likely to depend on shoppers’ information need. Therefore,

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we account for the moderating effects of perceived risk of a purchase and prior experience with
online shopping when modeling the signaling effect of website usability. Examining the
subsequent effects of expected service quality allows us to understand how signaling influences
repurchase intention. Based on the expectation-confirmation theory, expected service quality
is hypothesized to influence confirmation (of expectation) when it is assessed vis-à-vis actual
service quality perceived by shoppers. Confirmation is hypothesized to influence satisfaction
and subsequently repurchase intention. These hypotheses are justified next. In analyzing the
model, we also controlled for the direct effect of website usability on repurchase intention to
assess whether expectation confirmation fully mediates the effect of website usability, and
controlled for the effect of demographic variables such as age and gender.

*Broken line represents an effect that is controlled in data analysis

Figure 2. Signaling Effect of Website Usability on Repurchase Intention

Pre-Purchase Signaling Effect of Website Usability on Service Quality

As discussed in the previous section, website usability is a directly observable aspect of the
website interface that can be readily evaluated by users with a high degree of confidence. It is
also extrinsic in that changes in website usability do not directly alter after-sale service quality.
Website usability also generates a separating equilibrium as low-quality sellers have little
incentive to incur the upfront costs involved.

Website usability may serve as a pre-purchase signal of after-sale service quality similar
to how the physical store environment serves as a signal in offline shopping (Baker, Grewal,
& Parasuraman, 1994). A carefully designed website demonstrates to shoppers that the seller

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has incurred expenditure on the website and expects to recover it through future and repeat
sales (Mavlanova et al., 2012). The seller is therefore more likely to excel in after-sale service
to ensure customer satisfaction and repeat business. The focus on ease of navigation indicates
the seller’s customer orientation, especially the concern for customers’ comfort and efficiency.
A good organization of product information signals the seller’s concern for shoppers’ shopping
efficiency and effectiveness. In support, Xu, Benbasat, and Cenfetelli (2013) suggest that
customers are likely to draw on their perception of system quality in their mental schema when
considering service quality, such that when they perceive a higher quality of content and
delivery in a website, their perceived service quality will also be higher. Accordingly, we
hypothesize that website usability influences online shoppers’ expected after-sale service
quality.

The notion that signals affect pre-purchase expectation is also supported by prior
studies. Hong and Pavlou (2012) argue that consumers “expect a higher service level if the
provider transmits a signal indicating that he is of higher quality” (p. 5). Dutta, Biswas, and
Grewal (2007) explained that a guarantee default (i.e., signaled quality not honored)
“represents a disconfirmation between the expectation … and the postpurchase discovery of
inaccuracy of such expectation” (p. 78). In addition, prior studies have measure signal
outcomes in terms of expectation (e.g., Srivastava & Lurie, 2004). Therefore, we propose the
following hypothesis:

H1: Perceived website usability is positively related to service quality expectation.

Moderating Effects of Perceived Risk and Prior Experience with Online Shopping
As discussed before, perceived risk of a purchase increases the need for information to ensure
that the correct purchase decision is made and any possible loss is minimized (Schmidt &
Spreng, 1996). As perceived risk increases, shoppers tend to allocate more attention and
cognitive resources to acquire, comprehend, and process information before making purchases
(Dholakia, 2001). The information can help shoppers reduce perceived risk to at least an
acceptable level by modifying the alternatives in the choice set, identifying mechanisms to
insure against adverse consequences, or altering purchase goals (Dowling & Staelin, 1994).
Information about service quality is important in this respect as service quality is directly
related to the potential of recovering from problems after a purchase (e.g., after-sale support,
exchange, return, refund). When perceived risk is high, shoppers are more concerned about
loss and they are therefore likely to be more sensitive to signs of inadequacies in website

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usability. Hence, we hypothesize that the signaling effect of website usability is stronger when
perceived risk is high.

H2: The signaling effect of website usability is stronger when perceived risk of a purchase is
high.

Prior experience can dilute the effect of information obtained through signaling.
Experienced shoppers are likely to rely less on website usability as a signal cuing information
about after-sale service quality, since they have more experiential information to draw on. They
may therefore weigh website usability less in their purchase decisions compared to
inexperienced shoppers. Similarly, Jin and Park (2006) suggest that experienced shoppers tend
to rely less on cues such as website design and promotion. They concluded that these cues have
less influence on the trust of experienced online shoppers. Chiagouris and Ray (2010) suggest
that less experienced online shoppers may process stimuli in a more peripheral manner and rely
more on peripheral cues and symbols in evaluating a website due to the lack of knowledge
compared to experienced online shoppers. They found that online shopping experience
moderates the effects of advertising and reputation such that less experienced shoppers focus
more on these attributes. Similarly, Dahlen (2001) examined the impact of banner
advertisements on brand familiarity and observed that inexperienced Internet users are more
affected by banners than experienced users.

Experienced shoppers may still need to obtain store-specific information when they
shop in unfamiliar stores. However, compared to inexperienced shoppers, they tend to be better
at acquiring information for making purchase decisions (Ward & Lee, 2000), by supplementing
with their experiential information and information provided and signaled by online stores with
information from other sources such as third-party review websites, peer online shoppers, and
offline sources (Klein & Ford, 2003). This is likely to reduce experienced shoppers’ reliance
on the signal of website usability. In support, it has been found that as users gain more
experience with the Internet, their proficiency in searching and evaluating information
increases (Hernández, Jiménez, & Martín, 2010). Overall, prior research suggests that the
signaling effect is stronger for shoppers with less prior shopping experience, such that they rely
more on the readily available signal of website usability compared to experienced shoppers:

H3: The signaling effect of website usability is stronger for users with less prior experience
with online shopping.

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Expectation Confirmation of Service Quality and Repurchase Intention
According to the expectation-confirmation theory discussed in section 0, we hypothesize that
pre-purchase expectation of service quality is negatively related to the confirmation of service
quality because high expectations are more difficult to meet, while perceived service quality
(based on actual service quality) is positively related. Expectation is positively related to
satisfaction since a higher expectation sets a higher reference level for determining the
attainable satisfaction (Bhattacherjee, 2001). Assessing the effect of expectation on
confirmation requires a study that measures them at different times, thus many cross-sectional
studies had only examined the effect of confirmation and excluded expectation (e.g.,
Bhattacherjee, 2001; Lankton & McKnight, 2012; Limayem, Hirt, & Cheung, 2007;
Premkumar & Bhattacherjee, 2008). Only a few studies had assessed the effects of expectation
(Brown, Venkatesh, & Goyal, 2012; Kim et al., 2009). Therefore, an additional benefit of
testing them in this study is providing further empirical evidence.

H4a: Service quality expectation is negatively related to service quality confirmation.

H4b: Perceived service quality is positively related to service quality confirmation.

H4c: Service quality expectation is positively related to satisfaction.

According to the expectation-confirmation theory, when online shoppers’ service quality

expectation is confirmed (i.e., actual service quality meets or exceeds expected service quality),
they are likely to feel contended and satisfied. This in turn increases their intention to return
and willingness to purchase again (Parasuraman et al., 1985). In support, prior studies have
showed that confirmation is positively related to satisfaction (e.g., Bhattacherjee, 2001;
Bhattacherjee & Premkumar, 2004; Kim et al., 2009; Lankton & McKnight, 2012; Limayem
et al., 2007; Premkumar & Bhattacherjee, 2008; Susarla, Barua, & Whinston, 2003), and
satisfaction is positively related to repurchase intention (e.g., Wen, Prybutok, & Xu, 2011; Yen
& Lu, 2008). In this study, we model their effects to understand how service quality expectation
formed based on the signal of website usability influences repurchase intention.

H4d: Service quality confirmation is positively related to satisfaction.

H4e: Satisfaction is positively related to repurchase intention.

Research Method
To assess the proposed model and hypotheses, data were collected in a two-stage survey of
online shoppers. This section describes the survey instrument, data collection procedure, and

Page 15
sample demography.

Survey Instrument
Constructs in the proposed model were measured with items adapted from existing scales
as much as possible (see Appendix A). Website usability emphasizes navigability and
organization of information (Palmer, 2002). Since website usability and service quality are
distinct constructs in our model, it is important to ensure that their operationalization does not
overlap. Wolfinbarger and Gilly (2003) developed a set of scales that conceptually
distinguished between website usability aspects (i.e., ease of use, informativeness measuring
depth of information, selection measuring breadth of information, and
experiential/atmospheric; see p. 188) and service quality aspects (e.g., customer service,
fulfillment). It therefore serves as an appropriate basis for operationalizing website usability in
our study. Among the four significant usability aspects identified by Wolfinbarger and Gilly
(2003), the experiential/atmospheric aspect reflects website aesthetic, which usability
researchers consider to be outside the conceptual scope of website usability (Thüring &
Mahlke, 2007; Tractinsky, 1997). Therefore, we excluded the experiential/atmospheric aspect
and security and measured website usability in terms of ease of navigation, depth of product
information (informativeness), and breadth of product information (selection).

After-sale service quality was measured in terms of efficiency in transaction processing

(e.g., order, payment, delivery), security, and convenience (Chiu et al., 2014). Pre-purchase
service quality expectation, post-purchase service quality perception, and post-purchase
confirmation were measured with commensurate items having the same content (Edwards,
2002). This is required to ensure that they are consistent and comparable before and after
purchase. Perceived risk of a purchase was measured in terms of product risk, financial risk,
and an item capturing overall risk (Bhatnagar, Misra, & Rao, 2000; Kim, Ferrin, & Rao, 2008).
Satisfaction was measured with the semantic differential scale developed by Spreng,
MacKenzie, and Olshavsky (1996). Repurchase intention was measured following Khalifa and
Liu (2007).

Data Collection
To test the proposed model, we needed to collect data about online shoppers’ first purchase
from an unfamiliar online seller (i.e., one that they had not purchased from before). Data on
website usability, expected service quality, perceived risk, and prior online shopping
experience should be collected after a shopper has navigated the website of the unfamiliar

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seller, but before a purchase is made, while data on perceived (actual) service quality, service
quality confirmation, satisfaction, and repurchase intention should be collected after a shopper
has purchased from the unfamiliar seller. Accordingly, we designed a two-stage survey to
collect data.

Figure 3. Approach to Data Collection

To recruit respondents for the first stage, that is, individuals who had browsed the website
of an unfamiliar seller but not yet made a purchase, we turned to major online marketplaces in
Taiwan, such as PCHome, Yahoo! Shopping, PayEasy, and MomoShop. Together, these online
marketplaces accounted for more than 30 percent share of the fragmented online retail market
in Taiwan (Euromonitor International, 2017). These online marketplaces hosted a large number
of online sellers and users often encountered unfamiliar sellers while shopping. Due to the lack
of access to the list of all users, we identified active users by observing these marketplaces’
discussion forums or social networking sites 1 . A total of 711 users who had posted or

1
In the discussion forums or social network sites, users often share information about products that they have
purchased recently or recommend products they have come across to friends in their social network

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commented were contacted and asked whether they had recently browsed the website of an
unfamiliar seller (i.e., had never completed a purchase from the seller) (see Figure 3). If so,
they were invited to participate in the stage 1 survey and answer the survey based on the
unfamiliar seller (see Figure 3).

A total of 244 users completed the stage 1 survey. After that, they received a weekly email
asking whether they had completed a purchase from the seller considered in stage 1. They were
invited to complete the stage 2 survey if they had made a purchase since responding to the stage
1 survey. As an incentive for participating in the stage 2 survey, respondents were offered a
chance to participate in a lucky draw for a smartphone and a tablet computer. A total 213 users
completed the stage 2 survey. To assess whether sample attritions was due to non-random
effects that could potentially result in biased estimates, we compared the means of website
usability, perceived risk, prior experience, and expected service quality in the attrited sample
with those in the remaining sample (Lohse, Bellman, & Johnson, 2000). The result indicated
that the attrited sample did not differ significantly from the remaining sample.

Even though the online sellers considered by the respondents in our sample were from
several major online marketplaces and their websites were created using the tools provided by
the marketplaces, we expect adequate variance in different seller’s website usability (i.e., ease
of navigation, depth of information, breadth of information). Usability is likely to vary as each
seller must determine how to present their products using the tools provided. For example, a
low-quality seller that is not concerned with usability might not bother to use the tools provided
to create a navigation menu that allows shoppers to browse products based on categories; a
low-quality seller might choose to reduce effort by providing only minimal product
information, even when the tools provided by the marketplace permits detailed product
information. Having access to the tools provided by online marketplaces does not guarantee
that a seller’s website would have good usability. Website usability is likely to be more of a
result of design choices made by the seller rather than by the marketplace that hosts the seller.
In support, our analysis of constructs (detailed later) showed that our data on perceived website
usability ranged from 1 (lowest level in the scale) to 7 (highest level in the scale) and had a
standard deviation of 0.97.

It is also important to control for differences in website layout and seller’s reputation,
since we collected data from shoppers purchasing from different websites and sellers. At the
individual level of analysis, layout has been found to influence navigability (e.g., Palmer, 2002).

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We measured individuals’ perceived navigability as part of the construct website usability (see
Appendix A item PWU1), which is an independent variable in our structural model. Reputation
has been found to be an affect-based antecedent of trust that influences perceived risk (e.g.,
Kim et al., 2008) at the individual level. Perceived risk is a moderator in our study (and modeled
as an independent variable in the proposed model, as part of the moderating analysis).

Sample Demography
As summarized in Table 3, there were more male (62.4 percent) than female respondents. The
majority was between 20 to 35 years old (93.4 percent) and held a bachelor degree (69.5
percent). Most of the respondents had more than four years of experience using the Internet
(96.7 percent). These demographic variables were controlled for in data analysis because
previous literature suggests that they might affect purchases on the Internet (e.g., Fang et al.,
2014).

Table 3. Demographic Analysis

Characteristic Frequency Percentage Cumulative Percentage
Gender Female 80 37.6 37.6
Male 133 62.4 100.0
Age Less than 20 years old 6 2.8 2.8
20-35 years old 199 93.4 96.2
36-50 years old 3 1.4 97.7
More than 50 years old 5 2.4 100.0
Education High school 2 0.9 0.9
Bachelor degree 148 69.5 70.4
Postgraduate degree 63 29.6 100.0
Experience Using 1 – 2 years 2 0.9 0.9
the Internet 3 – 4 years 5 2.4 3.3
More than 4 years 206 96.7 100.0

Data Analysis
The proposed model was assessed with Partial Least Squares (PLS), a structural equation
modeling approach that simultaneously assesses all constructs and relationships in a research
model. PLS is variance-based and is more suitable than covariance-based approaches for
causal-predictive analysis where theory is less established (Wetzels, Odekerken-Schroder, &
Van Oppen, 2009). It is appropriate for our purpose since this is one of the first to model and
assess the signaling effect of website usability on repurchase intention. PLS can analyze
reflective and formative constructs jointly occurring in a single model (Wetzels et al., 2009).

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Formative constructs are measured using items that tap into different themes and they are
neither interchangeable nor expected to covary. For instance, ease of navigation (PWU1) may
not necessarily covary with informativeness (PWU2). In this study, the formative constructs
are perceived website usability, service quality expectation, perceived service quality, and
service quality confirmation. The other constructs are reflective. PLS analysis involves testing
the measurement model and the structural model, as detailed next.

Analysis of Measurement Model

For the reflective constructs, the measurement model was assessed in terms of reliability,
convergent validity, and discriminant validity (Wetzels et al., 2009). Cronbach’s alpha and
composite reliability were calculated to evaluate reliability (see Table 4). We found that all values
exceeded the requirement of 0.70. Convergent validity was assessed by calculating average
variance extracted (AVE). All AVEs exceeded the recommended value of 0.50. Discriminant
validity was assessed by examining the square root of AVEs. For all the constructs, the square
root of AVE (italic, diagonal entries in Table 5) exceeded corresponding correlations with other
constructs (non-diagonal entries in Table 5). Additional support for discriminant validity comes
through inspection of the cross loadings, which were low compared with the loadings. We also
assessed multicollinearity by calculating variance inflation factors and the values were all below
3.33 (see Table 5), indicating that the threat was low (Cenfetelli & Bassellier, 2009).

For the formative constructs, these tests were not applicable. Instead, significance of
item weight was examined to determine the contribution of items constituting the construct.
The results were favorable, with all the item weights significant at p<0.05. Multi-collinearity
among items was assessed using variance inflation factor (VIF). All exogenous constructs had
VIF that was less than 3.3, below the recommended threshold (Petter & Rai, 2007). Overall,
the measurement model was satisfactory.

Common method bias was assessed with three tests, considering that all data were
collected using survey. In the one-factor test, all items were entered into an unrotated principal
components factor analysis to check if a) a single factor emerged and b) a single factor
accounted for more than 50% of the variance. Neither of these was observed and we therefore
concluded that common method bias was unlikely. In the test of goodness-of-fit measures for
PLS (Wetzels et al., 2009), we found that the one-factor model had considerably worse fit than
the multi-factor model (GOFone-factor=0.39 vs. GOFmulti-factor=0.44). This further supported the
conclusion that common method bias was not significant. Using the “controlling for the effects

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of an unmeasured latent methods factor” technique suggested by Podsakoff, MacKenzie, Lee,
and Podsakoff (2003), we tested whether the addition of a method factor to the structural model
significantly improved its fit over the model with only the latent constructs specification, and
whether the factor loadings continue to be significant. We observed that the fit of the model
did not improve significantly and factor loadings remained significant. We concluded that the
threat of common method bias was not significant.

Table 4. Assessment of Reliability and Validity

Construct Item Loading* Construct Item Weight#
Perceived Risk PR1 0.85 Perceived Website PWU1 0.51
α=0.80; CR=0.88; PR2 0.79 Usability (formative) PWU2 0.27
AVE=0.71
PR3 0.89 PWU3 0.43
Prior Experience PE1 0.92 Service Quality SQE1 0.27
α=0.92; CR=0.95; PE2 0.92 Expectation (formative) SQE2 0.35
AVE=0.86
PE3 0.94 SQE3 0.21
Satisfaction ST1 0.95 SQE4 0.25
α=0.96; CR=0.97; ST2 0.96 Perceived Service PSQ1 0.35
AVE=0.90 Quality (formative)
ST3 0.94 PSQ2 0.32
ST4 0.96 PSQ3 0.23
Repurchase Intention RI1 0.96 PSQ4 0.26
α=0.96; CR=0.97; RI2 0.97 Service Quality SQC1 0.25
AVE=0.93 Confirmation
RI3 0.95 SQC2 0.37
(formative)
α: Cronbach’s Alpha; CR: Composite Reliability; SQC3 0.23
AVE: Average Variance Extracted; SQC4 0.34
* All item loadings were significant at p<0.001
#
All item weights were significant at p<0.05

Table 5. Correlations among Constructs and Square Root of AVE

Construct Min* Max* Mean SD* VIF* PWU SQE PR PE PSQ SQC ST RI
PWU 1 7 5.42 0.97 1.14 N.A.
SQE 1 7 5.31 0.88 2.54 0.47 N.A.
PR 1 7 3.58 1.36 1.10 -0.17 -0.56 0.84
PE 1 7 5.40 1.24 1.25 0.40 0.68 -0.25 0.93
PSQ 1 7 5.42 0.88 1.14 0.18 -0.27 0.21 -0.19 N.A.
SQC 1 7 5.23 0.91 1.80 0.40 -0.53 -0.10 0.41 0.07 N.A.
ST 3 7 5.49 0.92 1.00 0.47 0.49 -0.05 0.40 0.10 0.64 0.95
RI 1 7 5.49 1.00 N.A.* 0.32 0.45 -0.29 0.42 0.27 0.30 0.29 0.96
*Min: minimum; Max: maximum; SD: standard deviation; VIF: variance inflation factor; N.A.: not
applicable

In addition to ex-post statistical assessment, we employed several ex-ante strategies

Page 21
suggested by Podsakoff et al. (2003) to minimize common method bias. First, the predictor and
criterion variables were measured separately, before and after a purchase. The time lag
introduces a temporal separation. Second, the survey questions were measured using only
positive values rather than bipolar values (e.g., -3 to +3) to avoid acquiescence bias. Third,
respondents were assured of their anonymity and instructed to select the responses that best
described their perceptions rather than the “correct” response. Combining multiple statistical
and methodological strategies can help to minimize common method bias more effectively
(Craighead, Ketchen, Dunn, & Hult, 2011).

Analysis of Structural Model

The proposed model was assessed in two steps. First, a model with control variables and main
effects was evaluated (i.e., the main-effects model). In the next step, the hypothesized
moderating effects were added (i.e., the moderating-effects model). The moderating effects
were modeled using the product indicator approach (Henseler & Fassott, 2010), where product
terms were created using mean-centered indicators of the latent independent variable and
mean-centered indicators of the latent moderator variable. These product terms served as
indicators of the moderators.

Table 6. Path Coefficients and Result of Hypothesis Testing

Main-Effects Model Moderating-Effects
Relationship Result Model
Path T Statistic Path T Statistic
Perceived website usability  H1 is 0.66*** 16.44 0.67*** 16.24
Service quality expectation supported
Perceived risk * Perceived website usability H2 is 0.10* 1.97
 Service quality expectation supported
Prior experience * Perceived website usability H3 is -0.10* 2.09
 Service quality expectation supported
Perceived risk  Service quality expectation -0.46*** 11.23 -0.45*** 9.57
Prior experience  Service quality 0.10* 2.60 0.09* 2.38
expectation
Service quality expectation  Service quality H4a is -0.32*** 3.78 -0.32*** 3.48
confirmation supported
Perceived service quality  Service quality H4b is 0.46*** 5.40 0.46*** 5.03
confirmation supported
Service quality expectation  Satisfaction H4c is 0.19* 2.04 0.19* 2.03
supported
Service quality confirmation  Satisfaction H4d is 0.44*** 5.17 0.45*** 5.43
supported
Satisfaction  Repurchase intention H4e is 0.41*** 5.11 0.41*** 5.33
supported
Perceived website usability  Repurchase Control effect 0.36*** 4.65 0.36*** 4.64
intention is significant
*p<0.05; **p<0.01; ***p<0.001

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 Path coefficients of the proposed model are shown in Table 6 and Figure 4. As
hypothesized, perceived website usability strongly influenced service quality expectation and
the relationship was stronger in high-risk purchases and for online shoppers with less prior
experience with online shopping (see Figure 5). None of the control variables had a significant
effect, indicating that service quality expectation and repurchase intention were not
significantly affected by age, gender, or education. Although our sample had a larger
proportion of male respondents, it is unlikely to bias the findings, as we statistically controlled
for the effect of gender found that it did not have a significant effect. The effects of service
quality expectation on confirmation and subsequently satisfaction and repurchase intention
were significant and consistent with the expectation-confirmation theory. The direct effect of
website usability on repurchase intention was significant, indicating that expectation
confirmation is not the only mechanism mediating the effect of website usability. The model
accounted for 49% of the variance in repurchase intention (r2=0.49), 34.2% of the variance in
satisfaction (r2=0.34), and 79% of variance in expected service quality (r2=0.79).

Figure 4. Result of Structural Model Analysis

*p<0.05; **p<0.01; ***p<0.001

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 Figure 5. Plot of Interaction Effects

Discussion and Implications

We will first discuss the key findings and their implications for research and theoretical
development, followed by a consideration of the study’s limitations and suggestions for further
research. We will then discuss how the findings inform the practical management of online
shopping websites.

Implications for Research and Theoretical Development

One of the key findings is that the signaling effect of website usability goes beyond the pre-
purchase stage to influence repurchase intention in the post-purchase stage. This enhances our
understanding of the effect of signaling by revealing its longer-term effect and extends existing
research, which has mainly focused on the pre-purchase outcomes of signaling (Kim et al.,
2004; Riasanow et al., 2015; Wells et al., 2011). This study is among the earliest to assess
whether signaling affects repurchase intention, which is a critical outcome variable in online
shopping research. The finding provides empirical support for researchers’ argument that
“repeat purchase is likely to occur only if the claims about unobservable quality are true”
(Kirmani & Rao, 2000, p. 70). More importantly, it pinpoints a new topic for further
investigation: does signaling influence other post-purchase attitudes or behaviors, such as
regret and word of mouth? Further research can also identify whether signals conveyed by
other observable aspects of a website, such as aesthetics, have a long-term effect on repurchase
intention.

This study has also identified a theoretical mechanism through which signaling affects

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repurchase intention. The proposed model depicts how website usability affects expected
service quality through signaling, and how the confirmation of expected service quality
influences satisfaction and subsequently repurchase intention. This sheds light into the black
box of signaling’s long-term effect and contributes towards a more comprehensive theoretical
understanding of the concept. Notwithstanding, our finding that expectation confirmation
partially mediated the effect of signaling on repurchase intention indicates that other mediating
mechanisms may be at work. Our review of studies on signaling suggests that trust-related
mechanism may be a likely candidate. Further research may study expectation confirmation
alongside trust-related mechanisms to determine whether they fully mediate the effect of
website usability, though it should be noted that the large and longitudinal model might require
much research resources.

The proposed model was tested with data collected in a two-stage study, allowing us to
conclude the causal effects more confidently. The pre-purchase signaling effect was measured
separately from evaluations of after-sale service quality, satisfaction, and repurchase intention.
The data accounted for the temporal order between pre-purchase signaling and repurchase
intention. The temporal separation also has the additional advantage of controlling for common
method bias. Reducing the cognitive accessibility of responses to predictors collected at an
earlier time limits the likelihood that earlier responses influence subsequent responses to
outcome variables (Podsakoff et al., 2003).

We have also identified how the effect of signaling varies depending on online
shoppers’ information need. We found that the signaling effect of website usability is
significantly stronger when the perceived risk of a purchase is high and for less experienced
shoppers. Examining these moderators clarify the different informational conditions under
which signaling is used by online shoppers. Further research studying signaling should consider
other moderators capturing information needs, such as personality traits (e.g., trust propensity,
need for cognition), to better delineate the boundary conditions of the signaling effect.
Interestingly, in this study, we observed that the signaling effect is significant even when
perceived risk is low and for experienced online shoppers, though the effect is significantly
weaker (see Figure 3). This highlights the prominence of website usability’s signaling role for
all shoppers.

The proposed model also enriches our understanding of the expectation-confirmation

theory by identifying website usability to be a significant antecedent of online shoppers’

Page 25
expectation. Prior research has mostly focused on the effects of expectation rather than its
formation (e.g., Brown et al., 2012; Kim et al., 2009). Our findings indicate that examining the
factors influencing online shoppers’ expectation may be a fruitful topic for further research,
considering that the theory’s validity in online shopping has been strongly established (e.g.,
Bhattacherjee, 2001; Lankton & McKnight, 2012; Limayem et al., 2007; Premkumar &
Bhattacherjee, 2008).

Limitations and Suggestions for Future Research

This study’s results should be interpreted in light of several limitations. The first six are related
to the study’s design. First, data were collected from a sample of online shoppers in Taiwan
who uses shopping forums/social networking sites and generalizability of our findings is
therefore limited. The robustness and generalizability of our findings need to be further
established by studying other samples. Second, the shoppers in our sample were users of
several major online shopping marketplaces. Although we observed adequate variance in the
perceived website usability of different sellers within these marketplaces, our findings can be
further validated by studying shoppers browsing business-to-consumer, direct-sale websites.
Third, we collected data from users of shopping forums or social networking sites. It is possible
for them to gather second-hand information about the service quality of an unfamiliar seller
through the forum/social networking sites. The information might influence their pre-purchase
expectation of service quality. Future studies might consider controlling for the effect of
second-hand information to rule out alternative explanations. Fourth, this study focused on
websites selling physical products. The findings may not apply to websites selling digital
products (e.g., online gaming, information). We expect the proposed model to be applicable to
contexts where after-sale service quality and repurchase intention are important. The proposed
model needs to be further ascertained with data collected from these contexts. Fifth, we did not
distinguish among product categories. While repurchase intention and the expectation-
confirmation theory have been found to be useful for understanding many different product
categories in online shopping research, the signaling effect of website usability may be
influenced by product category. For example, the signaling effect may be stronger for luxury,
expensive products compared to undifferentiated, low-cost products. While this is partly
accounted for in the proposed model by the perceived risk construct, accounting for the effect
of product category might improve the explanatory power of the proposed model. Sixth, we
recruited respondents by inviting those who had browsed the website of an unfamiliar seller
(i.e., never purchased a product from the seller before) to participate in the stage 1 survey,

Page 26
considering that our focus is on the first purchase from an unfamiliar seller. In retrospect, it
might be useful to measure familiarity with a seller and control for its effect statistically in data
analysis.

There are several limitations related to the proposed model. First, since signaling is
used to address information asymmetry, we focused on the moderators influencing shoppers’
cognitive information needs (i.e., perceived risk and prior experience). It has been suggested
that both cognition and affect may have significant influence in consumer decision making
(Shiv & Fedorikhin, 1999). Thus, an opportunity exists to extend the proposed model by
accounting for the potential influence of affect. For example, it may be worthwhile to
investigate whether the use of signaling is moderated by online shoppers’ hedonic shopping
motivation. Second, as explained earlier, we focused on the perception of website usability
rather than objective usability. A few studies had measured signals objectively and found
significant effect (see Table 2). It might be interesting to compare perception-based and
objective measures of website signals to determine whether they have the similar signaling
effect. Third, website usability encompasses ease of navigation and informativeness. Given our
finding of the long-term effect of signaling, there is potential in studying signals at a more
specific level to achieve a more detailed understanding of how each website element can be
configured to signal service quality. Fourth, the comprehensiveness of the proposed model
could be improved by modeling more control variables affecting repurchase intention, such as
review rating (Gauri, Bhatnagar, & Rao, 2008).

Implications for Practice

This study shows that signaling after-sale service quality through improving website usability
significantly affects online shoppers’ repurchase intention through expectation confirmation.
Website usability can be directly managed by online sellers, and our findings suggest that it is
important to match website usability with the actual level of service quality so that shoppers’
expectation is confirmed. Poor website usability is likely to put off new customers, while
usability design that raises shoppers’ expectation for service quality excessively will lead to
dissatisfaction and eventually reduces repurchase intention, thwarting sellers’ effort to turn new
customers into returning customers. For example, a website that is very easy and efficient to
navigate (i.e., good usability) is likely to lead the shopper to expect efficient after-sale order
fulfilment (i.e., signaling after-sale service quality). To increase repurchase intention, the seller
should ensure that the after-sale service quality indeed matches the expectation set (i.e.,
expectation is confirmed) and shoppers are satisfied. It does not pay for a low-service-quality

Page 27
seller to focus excessively on website usability and generate an unrealistic expectation of after-
sale service quality (i.e., send an inaccurate pre-purchase signal), since the expectation will
soon be disconfirmed and shoppers are unlikely to have strong repurchase intention,
threatening the online seller’s long-term survival.

The findings related to moderating effects show that the information signaled by
website usability remains significant even for customers making low-risk purchases, and
matters for experienced online shoppers. These suggest that website usability is important for
low-risk as well as high-risk products. It will also continue to have a dominant influence even
as electronic commerce becomes more prevalent and online shoppers in general become more
experienced.

Conclusion
As the primary point of contact between shoppers and online sellers, website usability serves
as a signal that has a long-term effect, in that it influences not just the initial purchase but also
repurchase intention. To attract new and returning customers, websites should be designed to
send an accurate signal of the online seller’s actual after-sale service quality. The findings of
this study point towards new avenues of research on the post-purchase and long-term effects
of signaling, while also offering pragmatic suggestions for online sellers.

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Appendix A. Survey Instrument
Survey Instrument
Construct and Itema Reference
Definition
Perceived PWU1 (ease of navigation): This online store is easy to navigate. Wolfinbarger and
Website PWU2 (informativeness): This online store provides informative Gilly (2003)
Usability product description.
(PWU; Pre- PWU3 (selection): I am able to find the product I want in this
purchase) online store.
Service Quality SQE1: I expect to get good after-sale service from this online store. Bauer, Falk, and
Expectation SQE2: I expect this online store to process transactions efficiently Hammerschmidt
(SQE; Pre- (e.g., order, payment processing, delivery). (2006); Ladhari
purchase) SQE3: I expect purchasing from this online store to be secured. (2010)
SQE4: I expect purchasing from this online store to be convenient.
Perceived PSQ1: I got good after-sale service from this online store.
Service Quality PSQ2: This online store processed transactions efficiently (e.g.,
(PSQ) order, payment processing, delivery).
PSQ3: Purchasing from this online store was secured.
PSQ4: Purchasing from this online store was convenient.
Service Quality SQC1: The after-sale service by this online store was better than
Confirmation expected.
(SQC) SQC2: This online store processed transactions more efficiently
(e.g., order, payment processing, delivery) than expected.
SQC3: Purchasing from this online store was more secured than
expected
SQC4: Purchasing from this online store was more convenient than
expected.
Perceived Risk PR1 (overall risk): There is little risk that my purchase will go Bhatnagar et al.
(PR; Pre- wrong (reverse coded). (2000); Kim et al.
purchase) PR2 (financial risk): The price I pay is high. (2008)
PR3 (product risk): I am confident that the product I purchase will
be correct (reverse coded).
Prior PE1: I have shopped online extensively. Khalifa and Liu
Experience with PE2: I have used the Internet to shop for a long time. (2007)
Online PE3: I shop online frequently.
Shopping (PE;
Pre-purchase)
Satisfaction How do you feel about this purchase? Spreng et al.
(ST) ST1: Very dissatisfied – Very satisfied (1996)
ST2: Very displeased – Very pleased
ST3: Very frustrated – Very contented
ST4: Absolutely terrible – Absolutely delighted
(measured with seven-point semantic differential scales)
Repurchase RI1: I anticipate to repurchase from this online store in the near Khalifa and Liu
Intention (RI) future (2007)
RI2: It is likely that I will repurchase from this online store in the
near future
RI3: I expect to repurchase from this online store in the near future
a
All items were measured with a seven-point Likert scale except for those measuring satisfaction.

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