What Signal Are You Sending? How Website Quality Influences Perceptions of Product Quality and Purchase Intentions1

Abstract

An electronic commerce marketing channel is fully mediated by information technology, stripping away much of a product’s physical informational cues, and creating information asymmetries (i.e., limited information). These asymmetries may impede consumers’ ability to effectively assess certain types of products, thus creating challenges for online sellers. Signaling theory provides a framework for understanding how extrinsic cues— signals—can be used by sellers to convey product quality information to consumers, reducing uncertainty and facilitating a purchase or exchange. This research proposes a model to investigate website quality as a potential signal of product quality and consider the moderating effects of product information asymmetries and signal credibility. Three experiments are reported that examine the efficacy of signaling theory as a basis for predicting online consumer behavior with an experience good. The results indicate that website quality influences consumers’ perceptions of product quality, which subsequently affects online purchase intentions. Additionally, website quality was found to have a greater influence on perceived product quality when consumers had higher information asymmetries. Likewise, signal credibility was found to strengthen the relationship between website quality and product quality perceptions for a high quality website. Implications for future research and website design are examined.