RSS Feed (xml)
An example of an E-Commerce failure and its causes
The most famous Dot.com failure - Boo.com (1998-2000)
Boo.com is one of the most famous dot.com companies went bust in the late 90s. The year of 2000 was a turbulent time for the internet economy, but the failure of the clothing e-tailer Boo.com, added anxiousness about the stability and capability of existing or future online retailers.
Boo.com was launched 3rd November 1999, a British Internet company founded by Swedes Ernst Malmsten, Kajsa Leander and Patrik Hedelin, with an approximately with $125 million of funding by investors such as Benetton and Bernard Arnault, chairman of LVMH, Europe largest luxury goods group. With such huge amount of funding, it had not only become the most heavily funded Internet start-up in Europe, but had also become the highest profile.
Poor Web Design and User Experiences
The Boo.com website was broadly criticized as poorly designed for its target shopper and audience. For example, one of the famous criticism - “With products zooming all around the page, customers practically have to play target practice in order select the product they want (ZDNet, 29th November 1999).”
The site was very difficult to navigate and surf around. Shoppers could get lost and find no way back to their starting point. A browsing experience should be made pleasurable, simple and easy to use, and should not hindered by the overuse of technology.
Boo.com used a lot of graphics, pop-up windows, Miss Boo an animated helper and 3D images that only those with a 56k modem could see it without waiting a minutes for it to load. Due to a technology analyst from Forrester Research, points out that only 1% of home surfers in Europe and 2% in the US have such high-speed connections. With such high requirement of connection speed, it will discourage potential customers to shop at this website again.
Although Boo.com looked great, anyone visiting it in November 1999 was confronted with a formidable array of windows.
The most famous Dot.com failure - Boo.com (1998-2000)
Boo.com is one of the most famous dot.com companies went bust in the late 90s. The year of 2000 was a turbulent time for the internet economy, but the failure of the clothing e-tailer Boo.com, added anxiousness about the stability and capability of existing or future online retailers.
Boo.com was launched 3rd November 1999, a British Internet company founded by Swedes Ernst Malmsten, Kajsa Leander and Patrik Hedelin, with an approximately with $125 million of funding by investors such as Benetton and Bernard Arnault, chairman of LVMH, Europe largest luxury goods group. With such huge amount of funding, it had not only become the most heavily funded Internet start-up in Europe, but had also become the highest profile.
Poor Web Design and User Experiences
The Boo.com website was broadly criticized as poorly designed for its target shopper and audience. For example, one of the famous criticism - “With products zooming all around the page, customers practically have to play target practice in order select the product they want (ZDNet, 29th November 1999).”
The site was very difficult to navigate and surf around. Shoppers could get lost and find no way back to their starting point. A browsing experience should be made pleasurable, simple and easy to use, and should not hindered by the overuse of technology.
Boo.com used a lot of graphics, pop-up windows, Miss Boo an animated helper and 3D images that only those with a 56k modem could see it without waiting a minutes for it to load. Due to a technology analyst from Forrester Research, points out that only 1% of home surfers in Europe and 2% in the US have such high-speed connections. With such high requirement of connection speed, it will discourage potential customers to shop at this website again.
Although Boo.com looked great, anyone visiting it in November 1999 was confronted with a formidable array of windows.
Poor Marketing
Besides, Boo.com marketed itself as a premium fashion retailer, stocking and providing quality products for the potential shoppers. However, premium products alway came with expensive charges. Traditionally, customers are attracted to buying over the Internet by cheaper pricing instead of expensive charges. Although Boo.com with high technology enabled shoppers to view the items in 3D and gave a distinct visual feel on the products, but they didn’t account the main key of internet buying – lower prices. Furthermore, Boo.com did not wish to offer discounts, as it will devalue their brand and reputation.
Overstaffed, Overpaid, Over here
Boo.com attempted to create a perfect working environment for its employee, with plenty of staffing including a call centre 8 people, and approximately 400 staff in all, which proved to be excessive and expensive. (Financial Times, 18th May 2000)
For a company that employed 400 people when it only estimated it needed 30, such disappointing revenue was hardly enough to keep it running. Perhaps that’s why eight weeks before Boo.com demise, Boo.com had only managed to generate $ 200,000 turnover in 300,000 customers. In addition, the company still needed countless millions in additional funding and spending.
In retrospect, Boo.com simply tried to do too much, too soon. With over half of Britain’s Internet users now on broadband and trust for online shopping much greater than it was in 2000, Boo.com could have seen great success.
Boo.com eventually burned through $160 million before liquidation in May 2000.
What is important is not making it look good but making it fast and easy to use – Mark Baillie
It was a real mish-mash when it went live – Jim McNiven, Kerb
In 2005, CNET called boo.com the sixth greatest dot-com flop.
No comments:
Post a Comment