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ABSTRACT
Prior studies suggest that the growth in online retail is attributed to the effective implementation of media-rich and interactive services and functionalities that help overcome the para-social distance between customers and online retail stores. However, few studies have offered empirical evidence that demonstrates the specific impacts these interactive services and functionalities have on the financial performance of online retailers. Using data on the operations and financial performance of the top 500 online retailers in the U.S., this study investigates the impact that website features and functionalities have on sales performance and other intermediate performance measures. Our findings suggest that website features and functionalities have a significant direct impact on sales as well as an indirect impact through intermediate performance measures. Furthermore, our model identifies the specific performance measures that each website feature targets to improve.