As we had discussed in the earlier post, in the world of e-commerce; there are companies that failed as well as some that succeed. Of the companies that succeed are eBay, Google, Amazon and so on. Whereas, for companies that failed would be Webvan (in 1999-2001 years), Pets.com (in 2000 years), Kozmo.com (in1998-2001 years) and Boo.com (in 1998 to 2000 years). Over here, we will discuss on the factors behind the failure of e-commerce companies and we are going to look into Boo.com.
Boo.com was launched in 3rd November 1999 and the founders were the three Swedish Entrepreneurs; Ernst Malmsten, Kajsa Leander and Pattrik Hedelin. Boo.com was doing an e-tailing business mainly involved in clothing lines. According to the various sources that we have found, the main reason for the failure of Boo.com was due to some technological problems aroused which had forced them to delay the launching of their products in their website, for approximately six months. This had caused a massive loss to the company as their clothes are no longer saleable as these clothes are no longer trendy. Apart from that, consumers also complained that they have been having difficulty accessing into the website due to poor navigation and technology. This had caused the company to lose their potential customers.
The five causes that lead to the failure of Boo.com which will be discussed below are: Poor Web Design and Usability, Poor Marketing, Poor Planning, Poor Cash Flow Management and Human Resource Management Errors.
Boo.com was launched in 3rd November 1999 and the founders were the three Swedish Entrepreneurs; Ernst Malmsten, Kajsa Leander and Pattrik Hedelin. Boo.com was doing an e-tailing business mainly involved in clothing lines. According to the various sources that we have found, the main reason for the failure of Boo.com was due to some technological problems aroused which had forced them to delay the launching of their products in their website, for approximately six months. This had caused a massive loss to the company as their clothes are no longer saleable as these clothes are no longer trendy. Apart from that, consumers also complained that they have been having difficulty accessing into the website due to poor navigation and technology. This had caused the company to lose their potential customers.The five causes that lead to the failure of Boo.com which will be discussed below are: Poor Web Design and Usability, Poor Marketing, Poor Planning, Poor Cash Flow Management and Human Resource Management Errors.
Poor Web Design and Usability 
The web design of Boo.com includes a “three-click rule” whereby users were not allowed to click more than 3 times on the web site to seek for information. This had caused much inconvenience to users instead of obtaining any benefits from the technology.
Another weak point is that Boo.com did not take into consideration towards the drawbacks of using the
3-D graphics, one of which is that it will cause slow loading time. Another drawback was that at the time, only dial up Internet connection were available and it does not support the use of 3-D viewing.
The web design of Boo.com includes a “three-click rule” whereby users were not allowed to click more than 3 times on the web site to seek for information. This had caused much inconvenience to users instead of obtaining any benefits from the technology.
Another weak point is that Boo.com did not take into consideration towards the drawbacks of using the
3-D graphics, one of which is that it will cause slow loading time. Another drawback was that at the time, only dial up Internet connection were available and it does not support the use of 3-D viewing.
Poor Marketing
Boo.com failed to offer attractive prices to their customers, which we believed is the most fundamental concept in order to sustain their business. The company also lack of creative marketing strategy to promote their sales.
Boo.com failed to offer attractive prices to their customers, which we believed is the most fundamental concept in order to sustain their business. The company also lack of creative marketing strategy to promote their sales.
Poor Planning
Boo.com does not have good business strategy plans in several areas. Their Swedish founders were over ambitious and had failed to set a more realistic plan. Another reason is that Boo.com does not have “bricks and mortar” retailing experiences which is the main cause for the company having to be closed down.
Boo.com does not have good business strategy plans in several areas. Their Swedish founders were over ambitious and had failed to set a more realistic plan. Another reason is that Boo.com does not have “bricks and mortar” retailing experiences which is the main cause for the company having to be closed down.
Poor Cash Flow Management
The “Financial Times” commented Boo.com for having poor cash flow management as they spent a lot on technology as well as towards employee benefits. They believed that problem aroused from a large amount of source invested in the company’s technology platform which consisted of solving multi-currency sales and product delivery. Besides that, Boo.com had also used up to five thousand pounds a month in designing 3D photographs of its products to be uploaded in their web.
The “Financial Times” commented Boo.com for having poor cash flow management as they spent a lot on technology as well as towards employee benefits. They believed that problem aroused from a large amount of source invested in the company’s technology platform which consisted of solving multi-currency sales and product delivery. Besides that, Boo.com had also used up to five thousand pounds a month in designing 3D photographs of its products to be uploaded in their web.
Human Resource Management Errors
The fundamental objective of Boo.com was to create a perfect environment for its employees. However, the company had been operated in an overly grand scale which at the beginning; the company had over recruited employees without first considering how well the business is doing and whether do they need such as huge number of employees. This thus created a problem in the efficiency of utilizing the human resources as well as the effectiveness of the company performance.
In a nutshell, we recommend that Boo.com should design their website in a simpler and more convenient way so that customers can easily access into it. The company can also focus on building long term relationship with customers by offering free gifts or by giving discounts on certain products.
Relevant Links:
http://www.edigitalretail.com/greatest_dot_com_failure.html
http://www.witiger.com/ecommerce/dotcomfailures.htm
The fundamental objective of Boo.com was to create a perfect environment for its employees. However, the company had been operated in an overly grand scale which at the beginning; the company had over recruited employees without first considering how well the business is doing and whether do they need such as huge number of employees. This thus created a problem in the efficiency of utilizing the human resources as well as the effectiveness of the company performance.
In a nutshell, we recommend that Boo.com should design their website in a simpler and more convenient way so that customers can easily access into it. The company can also focus on building long term relationship with customers by offering free gifts or by giving discounts on certain products.
Relevant Links:
http://www.edigitalretail.com/greatest_dot_com_failure.html
http://www.witiger.com/ecommerce/dotcomfailures.htm
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