Sunday, February 1, 2009
An Example of an E-Commerce Failure and its cause.
Boo.com was launched 3rd November 1999. Its investors such as Benetton and
Bernard Arnault, chairman of LVMH, Europe’s largest luxury goods group invested $125million. It was the most high profile and most heavily funded internet start-up in Europe at that time.
Boo faced to different sources of technological problems. It caused Boo’s launch delayed by 6months. Boo spent a high cost on consultancy fees to speed up the website launched as soon as possible. In addition, they used $6million on fashion ware, which had no longer fashionable by the time when the site was launched. The website made customers felt frustrating with the information provided. They did not help visitors with the purchasing experience satisfactory. The slow browsing and poor navigation of the website, some more the exasperating technology gained Boo a bad reputation and lost potential customers.
The points that Boo.com fail:
Poor web design and usability. For an example, Boo.com apply the “three-click rule” for the website design, visitors need to need to click more to find the information they seek. It is inconvenience. A perfect website should be simple and quick to understand and use but not overuse of technology.
Bad marketing. Boo.com marketed its premium products with 3-D to enable customer to view the items, but they price with expensive charges. It is against the principle that buying over the internet with cheaper pricing.
Bad planning. This is the key to Boo’s downfall. Boo wanted to dominate the market immediately. Its Swedish founders were too ambitious in their business plan. Due to the poor experience, they were failing to do that.
Poor financial management. Due to those factors above caused Boo.com to bear a huge costs and Boo.com did not have managers to control the spending.
Human resources management errors. Boo.com had employed over numbers of employees to ensure the efficient of the company processing. It should be hire quality employee but not quantity employees.
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