456 IEEE TRANSACTIONS ON SYSTEMS, MAN, AND CYBERNETICS—PART A: SYSTEMS AND HUMANS, VOL. 30, NO. 4, JULY 2000 Effective Design of Electronic Commerce Environments: A Proposed Theory of Congruence and an Illustration Jungjoo Jahng, Hemant Jain, and K. Ramamurthy Abstract—The advent of the Internet/World Wide Web (WWW) and its related technologies has created a new format of business-to-business (B2B) and business-to-consumer (B2C) commerce; for instance, virtual shopping on the Internet within the B2C domain. Such a concept of shopping requires a new paradigm of commerce environments. Forecasts suggest that a major portion of total commerce in the U.S. during the early part of the next decade will be via the Net/WWW. While the concerns of lack of security and privacy associated with the Net still prevail these may have more to do with users perceptions than with inadequate technological capabilities. Concurrently, however, we posit that the current electronic commerce (EC) systems are not user-oriented leading to less than dramatic growth in B2C. In a physical environment, consumers can touch and feel the products and freely communicate with sellers or their representatives about the products they want to buy. On the contrary, consumers in an EC environment find it difficult to deal with the inherent nature of virtuality in their interaction. This is especially true in a poorly designed EC environment where users might be uncomfortable with the uncertainty and ambiguity caused by lack of interaction with products and sellers. For simple products this may not be a barrier whereas for complex products this may create a significant barrier. Very few theoretical frameworks exist in the EC literature that can effectively address the issue of design of Web-based EC application systems for this new form of cyber commerce environment and make provisions to deal with the heterogeneous nature of both products and consumers. In this study, we propose a conceptual framework to address such an issue by drawing on insights from contingency research in information systems design and media choice behavior. The basic theme of this model, called the congruence model, is that for an EC systems environment to have favorable impact on a consumer, the system must have a good fit with both the products/services that are sold/provided and the users it supports. An initial validity of this conceptual framework is demonstrated by working with a few product and user types. A detailed evaluation of eight different commercial web sites dealing with four different product categories provides additional support to the proposed theory. We expect our conceptual model to spur significant future research on this important phenomenon. Index Terms—Complexity, interactivity, product presence, product types, social presence, tolerance for ambiguity, tolerance for uncertainty, user attitude, user behavior, visualization. I. INTRODUCTION T HE world of American shopping has continually evolved. In the early nineteenth century, shopping was dominated by small mom and pop stores providing personalized service Manuscript received October 26, 1999; revised March 31, 2000. All authors have contributed equally. This paper was recommended by Associate Editor C. Hsu. The authors are with the School of Business Administration, University of Wisconsin-Milwaukee, Milwaukee, WI 53201 USA (e-mail: jahng@uwn.edu; jain@uwm.edu; ramurthy@uwm.edu). Publisher Item Identifier S 1083-4427(00)05144-4. to customers. These small neighborhood shops evolved into large departmental stores and, chain stores and shopping malls providing mass-produced items and limited service [47]. Over the past few years, the Internet/WWW have emerged as a mechanism enabling business transactions between buyers and sellers on a global scale. Conducting business on the Internet has gained considerable attention from researchers as well as practitioners due to its vast potential for and impact on businesses and users. However, the advent of the WWW and its related technologies has created a new format of shopping (i.e., virtual shopping on the Internet). This concept of shopping requires a new paradigm of commerce environments [28], [76]. It removes the physical constraints (such as time and place) of traditional shopping by creating a virtual world in which businesses and consumers can operate. It also has a potential of offering personalized service to customers at relatively low cost. Recent literature suggests that the Internet and WWW as a business transaction tool provides both firms and consumers with various benefits including but not limited to lower transac- tion cost, lower search cost, and greater selection of goods [5], [6], [34]. These advantages may motivate them to participate in conducting electronic commerce (EC) over the Web. Fore- casts indicating extraordinary growth rates continue to emerge. For example, a study by New York-based market researcher EMarketer estimates that business-to-consumer (B2C) e-com- merce will increase from $4.5 billion in 1998 to $26 billion by 2002, and that business-to-business (B2B) e-commerce would increase from about $16 billion to $268 billion during the same period [19]. According to a survey by Virginia-based PC Data Online, of 2137 of online shoppers over 48% plan to purchase more this holiday season compared to 1998 [44] with software, music, and books topping the list as the main products. It is true that some companies, such as Federal Express and Dell Corpo- ration, have made successful transition to online web-business; Dell claims that over 50% of its business is expected to be con- ducted over their web sites in a few years. Yet, while there is an expectation of over 19% growth in overall consumer shopping in 1999, less than 8% overall growth in online B2C seems to be emerging as the reality [50]. Despite large investments and pro- liferation of EC applications and a growing number of users of the Internet, the observation made by Jarvenpaa and Todd [34] that serious conduct of EC on the WWW by individual con- sumers does not appear to have taken root may still be true. Information security and privacy concerns continue to pre- vail and have been pointed to as the key factors inhibiting the 1083–4427/00$10.00 © 2000 IEEE