The Internet has brought significant changes to the retail industry because it revolutionizes how information is transmitted and accessed. The main objective of this research is to enhance our understanding of people's adoption of the Internet and its implications for retail competition. This dissertation consists of two essays. The first essay empirically investigates how customers' adoption of online ordering affects their spending. Using data from a large retailer that operates through catalog and Internet channels, we find that customers significantly increase their spending at the retailer after they start placing orders through the company website. We show that this is largely because online customers can access product information more easily than offline customers can. Overall, the findings highlight the information role of the Internet and its significant revenue implications for multichannel retailers. They also suggest that, contrary to conventional wisdom, the Internet can strengthen customer loyalty and increase retailers' market power. The second essay examines the connection between Internet access and the digital divide. We estimate the effect of the number of Internet service providers (ISPs) in a customer's local market on her likelihood to adopt online ordering. To overcome the issue of endogenous entry by ISPs, we conduct the analysis with shoppers who relocate between ISP markets because the act of moving can be thought of as an exogenous shock to the shopper's Internet access option. We find the overall impact of Internet access on adoption to be moderate. Contrary to the conventional belief that adoption lags where the supply of Internet access is deficient, underserved markets--those with no ISP or only a minimal level of access--exhibit levels of adoption comparable to well-served markets with plenty of ISPs. We observe a noticeable increase in the adoption rate only for markets with a very large number of ISPs. Policy implications of the results are discussed. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]