Understanding consumer online shopping behaviour from the perspective of transaction costs

H2b: The site design of an online store is negatively related to a customer’s perception of 
TCs associated with purchasing from the online store. 
 
E-service quality
In the literature of service marketing, perhaps service quality has been the most explored 
topic (Swaid and Wigand 2009). Prior research has associated service quality with the 
business performance of firms (Boulding
 et al.
1993, Zeithaml
 et al.
1996), customer 
satisfaction (Lee and Lin 2005, Zhang and Prybutok 2005, Collier and Bienstock 2006, 
Cristobal
 et al.
2007, Udo
 et al.
2010) and purchase intention (Boulding
 et al.
1993, Zeithaml
 
et al.
1996, Collier and Bienstock 2006, Udo
 et al.
2010). In line with Bitner and Hubbert 
(1994), e-service quality in this study is defined as a consumer’s overall impression of the 
relative inferiority/superiority of an online store/vendor and its services. It reflects reliability, 
responsiveness and personalization. Customers always require quality guarantees in order to 
reduce the uncertainty of e-service (Ladhari 2010, Pearson
 et al.
2012). Datamonitor reports 
that 7.8 per cent of online transactions initiated by consumers are abandoned because of poor 
service quality. In this sense, e-service quality is of paramount importance because it 
influences the long-term relationship between customers and online vendors (Reibstein 2002, 
Harris and Goode 2004).

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Providing superior quality services will signal online vendors’ credibility (Yang and Jun 
2002). In contrast, if online vendors present unreliable services to consumers, consumers 
cannot build trust in them (Tams 2012). They would spend more time and effort monitoring 
online vendors’ behaviour, such as order processing and delivering, etc. For example, owing 
to the physical separation between customers and online vendors, the purchased products 
typically need to be delivered to customers, which brings a concern about the discrepancy 
between what is ordered and what is received (Ofek
 et al.
2011). If online vendors do not 
deliver precisely what is being promised, consumers would have to bear some psychological 
costs, such as disappointment and anxiety, and they would need to return the products to 
online vendors (Wu
 et al.
2014). When consumers face the issue of product return, they have 
to obtain return-related information from the online vendor’s webpage, and then ship 
products back to the online vendor through the third-party logistic organization, and wait for 
several days to get new products. In this process, return issues result in an additional 
inconvenience and potential expense, thereby greatly increasing the consumers’ perceived 
post-purchase costs and overall TCs (Chintagunta
 et al.
2012).
Good e-service quality is embodied in the way that online vendors anticipate and respond 
promptly and effectively to customers’ needs and requests, providing customers with the 
knowledge necessary to make purchase or solve problems (Jarvenpaa and Todd 1996, 
Connolly and Bannister 2006). In online shopping, customers expect online stores to respond 
to their inquiry promptly (Liao and Cheung 2002). For example, when a potential buyer has 
inquires about the product delivery method, if the online vendor can quickly explain the 
differences in expected delivery times and charges for different delivery options, the 
customer would perceive low costs for obtaining the information, resulting in a decrease in 
the search cost. On the other hand, if e-service providers present slow responses to customers, 

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the slow responses may decrease customers’ perceived control over online shopping and 
further undermine their shopping experience (Kassim and Abdullah 2010). Since most online 
stores may not have a physical presence, consumers can contact online stores only via email, 
telephone and fax. This fact prompts consumers to be concerned about the service quality. 
They are afraid of getting their inquiries or requests for help ignored by online stores. As 
such, consumers would have to spend additional time and effort monitoring online stores to 
check if their requests are processed as expected. The slow responses may also decrease 
customers’ perceived control over online shopping and make them sense more TCs as they 
need to expend effort in searching for product and store-related information to address their 
inquiries. 
Recently, personalization has become more important and is an essential part of e-service 
quality (Ho
 et al.
2011, Dabrowski and Acton 2013). If the information is irrelevant and not 
tailored to customers’ needs, customers may doubt online vendors’ ability to understand and 
meet their needs (Stoecklin-Serino and Paradice 2009). This may undermine their experience 
of online shopping. On the other hand, providing personalized service can increase customers’ 
perception of the net benefits gained by increasing the perceived relevant benefits (Vernuccio