Identifying E-commerce Website Design Inefficiencies: a Business Value-driven Approach Using Dea

Managers at e-commerce firms are in need of proven methods for website evaluation. So, one of the most pressing issues is whether the design of their online storefronts is effective, and if not, which areas require attention and improvements. However, current approaches (e.g., user testing, inspection, inquiry) are not well suited to the task at hand. This paper proposes a new business value-driven approach to website evaluation, which is grounded in the economic theory of production. We conceptualize online shopping as an economic production process in which customers are making use of various functionalities provided by the e-commerce website in order to complete a purchase transaction. This view enables us to formulate a novel perspective on website performance—the ability to transform inputs (i.e., use of website functionalities) into outputs (i.e., completed purchase transactions). We use data envelopment analysis (DEA) as the methodological vehicle for assessing e-commerce website effectiveness and propose two new metrics, Inefficiency Breadth and Unit Inefficiency to help identify website functionalities that are potentially ineffective. The value of the proposed method is illustrated by applying it to the evaluation of a real-world e-commerce website.