Introduction

One of the most interesting phenomena in the last few years is the adoption of e-commerce by businesses and consumers. E-commerce was defined by Kalakota and Whinston (1996) in their seminal book on the topic as "a modern business methodology that addresses the needs of organizations, merchants, and consumers to cut costs while improving the quality of goods and services and increasing the speed of service delivery." It represents a combination of information technology (IT), business process, and business strategies that facilitates the exchange of information, products and services.

The Internet and World Wide Web (WWW) have created opportunities for virtually all companies ranging from small start-ups to Fortune 100 companies. Retailers all over the world are establishing a new type of enterprise, virtual stores, which exist in cyberspace and offer merchandise and services through an electronic channel to their customers with a fraction of the overhead required in a brick-and-mortar store. While companies may choose different ways to engage in EC, one thing that all virtual stores have in common is their heavy dependence on information technologies to achieve organizational goals and objectives, and many of them have seen significant benefits in the areas of cost saving, market penetration and expansion, global exposure, overall product value, and customer services.

The attractiveness and power of e-commerce lie in its impact on reshaping traditional value chains in different industries. It represents a fundamental transformation of traditional business models. However, for such major paradigm shift to be accepted by end-users, firms have to develop resources and competencies that add value to consumers.

The fundamental question that this chapter attempts to answer is what factors determine consumer acceptance and use of virtual stores. Although rapid growth has been witnessed in this area, online sales volume still remains relatively low compared to alternative retailing forms. Consumers have realized the benefits of shopping online, but at the same time been impeded by factors such as security and privacy concerns, download time and unfamiliarity with the medium. Practitioners have been trying to offer so-called Web strategies on a case-by-case basis using their personal experiences, observations, and intuitions. This approach gave rise to a large number of conflicting strategies due to its lack of reliable theoretical foundation. As a result, organizations utilizing Web strategies for selling their products and services are finding that their expectation far exceeds actual achievement. Rigorous academic research on the success factors of online retail is relatively scarce today. To partially fill this void, we join the dialogue by developing a theory-based model for explaining and predicting consumer acceptance of virtual stores. We also attempt to identify a list of operative critical success factors (CSF) for virtual stores to succeed in the midst of a competitive business environment.