An example of an E-Commerce failure and its causes - Boo.com

Thursday, January 29, 2009

Boo.com’s history (Nov 1999 - May 18th 2000)

Boo was beaten by technology and the fickle fingers of those who shop for clothes on the web. From the day it launched technology was a problem for the online clothes retailer. Originally it was supposed to launch in May 1999 but technical hitches delayed the unveiling. When Boo.com finally went live last November its ambitious technology was there for all to see - if they could be bothered to wait for it to download. The graphics-heavy site took a notoriously long time to load.

The company stated that ‘their business idea is to become the world-leading Internet-based retailer of prestigious brand leisure and sportswear names’. However, after less than a year it launched, boo.com faced a critical moment. “Unless we raise $20 million by midnight, boo.com is dead”. The CEO of the boo.com Ernst Malmsten said, on May 18th 2000. Half the investment was raised, but this was too little, too late, and at midnight, less than a year after its launch, Boo.com closed because investor funds could not be raised to meet the spiraling marketing, technology and wage bills.

The headlines in the Financial Times, the next day read: “Boo.com collapses as Investors refuse funds. Online Sports retailer becomes Europe’s first big Internet casualty”. Although it happen 9 years ago, the boo.com case still remains as a valuable case study for all types of businesses, since it doesn’t only illustrate the challenges of managing E-commerce for a clothes retailer, but rather highlights failings in E-commerce strategy and management that can be made in any type or organization.

The causes of the e-commerce failure

There are several causes that makes Boo.com fall. Firstly, Boo.com full of technologies that cannot be view by all the internet users by that time. It could not be seen by people who use Macintosh computers which are heavily used by graphics, design and media companies. These companies surely are one of the key markets for a hip online retailer like Boo. Next, it used lots of graphics, pop-up windows and 3-D images that only those with a 56k modem could see it without waiting minutes for it to load. Getting the most out of the site required a high bandwidth internet connection. But according to Therese Torris, technology analyst from Forrester Research, only 1% of home surfers in Europe and 2% in the US have such high-speed connections by that time.

Although Boo.com looked great, anyone visiting it in November 1999 was confronted with a formidable array of windows. In one was Miss Boo, an animated helper who commented on the clothes people were buying. At the same time four other windows were open showing:

- The range of clothes a buyer was choosing from

- A detailed image of one item that could be spun around or magnified

- A Boo bag holding what was being bought

- A mannequin dressed in the clothes a shopper was buying

To do all this Boo used a technology called Flash made by US software company Macromedia that lets web page designers add animations and graphics to sites. But unfortunately at the time Boo launched, few people had installed the software program, called a plug-in, that let them see the funky graphics. Now Flash software is much more widely used.

According to Jim McNiven, chief executive officer of award winning web design company Kerb, he said that many companies stop workers from downloading plug-ins because of potential security risks. He said it was much better to use technologies that need no extra software and that everyone can see. Besides that, he says that Kerb always ensures that at least the last two full versions of browsers can see all parts of webpages designed for clients.

Furthermore, the site was very difficult to navigate around. Shoppers could get lost and find no way back to their starting point. In the web design industry, there is a “three-click rule” for site design, which simply means that the users should not need to click more than three times to find the information they seek. Customers prefer pleasurable, simple and quick browsing experience rather then complicated and full of animation that confusing and wasting their time.

In order to gain customer acceptance, Boo redesigned its website in January to make it easier to navigate and added a version devoid of pop-up windows and graphics. The changes gagged Miss Boo and a paper catalogue was printed for those who want to buy offline. However, the early bad experience scared off many online shoppers who did not go back to Boo.com, preferring to do their buying on the high street or on websites that were easier to use. Online shoppers are notoriously fickle and surveys have shown they are easy to irritate and hard to impress. Irritated shoppers tend to decamp for websites offering better service.

Additional information:

But some of the blame for Boo's demise can be put down to the fact that the e-commerce is in its infancy. Boo launched simultaneously in 18 countries and had to create an international infrastructure that could handle all the different currencies, consolidate orders and deliver clothes and shows across the world.