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E Comm. Failures+Reasons

Date post: 18-Nov-2014
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Reasons for E commerce failures and E commerce failures
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Page 1: E Comm. Failures+Reasons

Reasons for E commerce failures and E commerce

failures

Page 2: E Comm. Failures+Reasons

Visibility on the Web

• Studies show that the same is true on the web; it is just that the best locations are on the first page of Google's search results page, Not just any first page but [4]Google's first page, which represent 80% of all search traffic. Winning front-page placement on Google requires a through understanding of how search engines operate, web honed marketing skills, time and technical expertise in search engine optimization.

Page 3: E Comm. Failures+Reasons

Relativity of Keywords

• Because users are so mobile, websites must be designed with a certain amount of stickiness. This stickiness is not produced with expensive graphics and Webmaster tricks but in the sites ability to address the users needs based upon their keyword query.

Page 4: E Comm. Failures+Reasons

The Flat Nature of the Web

• The fact that anyone can setup a website and become a competitor with [5]very little investment means the competition from small online stores is significant and can even be dominate in some verticals.

Page 5: E Comm. Failures+Reasons

lack of content

• Content needs to add information to the web. It needs to add value to the web and be something fresh, new, or a differing opinion. Content is writing about your particular subject or offering in such a way that it helps your rankings with the major search engines.

• Search engines will analyze your site to see if it offers answers to particular searches that are made through their services. If it does, then for that set of keywords, you may be ranked (and ultimately get more traffic.) If it doesn't, like the great majority of sites on the web, then you will never be found.

Page 6: E Comm. Failures+Reasons

too many banner ads, colors, flashy text or external links

• There are tons of other websites that will create banner ads for you to place on your site. Don't do it. They don't work, they won't make you any money and you are just helping that company's search ranking. Only provide external links on your site that help your business because an external link is a way for the surfer to leave your site. They can get distracted and not ever return to your offering.

Page 7: E Comm. Failures+Reasons

respond to visitors in a timely manner.

• Not only do you need to respond quickly, you need to respond professionally and you need to let them know that you read and understand their email. You should include all of your contact information and you have to use 'spell-check'.

Page 8: E Comm. Failures+Reasons

• Ineffective strategic planning.No one plans to fail, but failing to plan is a good way to do it. You need to know who your potential customer is, looking at demographics, but also at psychographics. You need to know how you will reach them and how you will convert visitors to buyers. You need to know how you turn buyers into repeat buyers.

Ideally, you will also know how to turn buyers into word of mouth endorsement for your company. And, you need to include all of that in the planning stages of your website.

• Many "web site designers" don't know anything but design.If your website designer does not know marketing, conversion, usability and compatibility issues the bottom line is that you end up with a website that looks great, at least to you, but doesn't do much to ring the cash register.

• Many marketers don't know design.The web isn't television, or radio, or direct marketing. Using a methodology suited to another medium (such as television or direct marketing) is like running a text ad on tv. You could, but why would you want to?

Making use of the unique aspects of marketing that only the web can offer will result in greater response and profit than using any one offline method alone. A few marketers are finally cluing in to the fact that layout and well chosen graphics can vastly affect your bottom line, but they are few and far between.

Page 9: E Comm. Failures+Reasons

• Poor html development skillsAnyone can pick up a copy of Frontpage or any other such "design software" and hang out a shingle. And they do. I have no problem with anyone building their own site. Quite the contrary, I applaud anyone that wants to learn how to build and maintain their own site. (That's why I offer base layout & template design.)

However, when a website designer does not know why errors occur, or do not know that the sites they build are not browser and platform compatible - and they are charging people for their work - their customers will pay for the designer's lack of knowledge in lost sales.

• Lack of promotionWebsites don't come with traffic at the door. A well designed website is ready for promotion. It works in all browsers and on all platforms. It looks good no matter what monitor size the visitor has. It works on a MAC and it works on a PC. It works in IE and it works in Opera or Firefox. It is coded and ready for the search engine bots. It has a mailing list database ready to accomodate the people that will join your list or otherwise get into your conversion plan.

But, it doesn't come with a line up of people ready to buy. This seems to be shocking to many website owners. They seem to think that if they have a nice website, the dollars will start rolling in. Not so. Good design means it works for everyone and is ready for you to work it. Bad design means it doesn't work for everyone and won't work even if you do.

Page 10: E Comm. Failures+Reasons

• Forgetting to Budget for Maintenance- As a rule of thumb, the annual maintenance budget for a website should be about the same as the initial cost of building the site, with 50 percent as an absolute minimum. If you simply spend the money to build a glamorous site but don't keep it up to date, your investment will very rapidly turn out to be wasted.

• Lack of patience- You got to have enormous patience if you are running a new eCommerce application. It won't fly from day one. Initially it will suck, then it will crawl, and then walk and after lot of time and money it will start flying. So you won't be an internet millionaire overnight. Develop patience, if you follow tips 1 and 2, and work hard, your site will start earning more than you expected.

Page 11: E Comm. Failures+Reasons

Kibu.com Products: Chat, message boards, original

content

Target Demographic: Teen Girls

Summary: Kibu.com has one of the strangest stories from the dotcom era: Even as many women's content sites and portals were closing, Kibu was securing a great deal of funding and partnerships from major brands and companies, mainly due to the spending power of the site's target demographic. Meanwhile, the editorial leadership was virtually nonexistent, the backend was not being developed, and the top executives were M.I.A. By all appearances, there was very little actual work being done to justify the hype surrounding the site. After only 46 days, the site closed it's doors.

Page 12: E Comm. Failures+Reasons

Pseudo.comProducts: Chat, Audio and Video content

Founded: 1993

Summary: Before there was YouTube, there was Pseudo. It did not feature crowdsourced content like YouTube, but it did attempt to offer a wide variety of video content to it’s audience. Before it’s brief life as a video site, the company had a lucrative contract with Prodigy, which was one of only 2 ISPs serving the public in 1993. It followed by streaming audio-only shows, then video. It may well have become YouTube if the internet market had not nosedived between 1999 and 2000, when Pseudo’s lack of investors forced it to close its doors.

Page 13: E Comm. Failures+Reasons

Webvan.comProducts: Chat, message boards, original

content

Founders: Stephan Paternot and Todd Krizleman

Summary: Based partially on the Amazon model, Webvan’s mission was to deliver groceries to customers within 30 minutes of the order. The execution of the idea had two fatal flaws: none of the upper management had ever worked for a grocery-related business, and widespread overspending dried out investment monies before the company had a chance to spread beyond it’s initial area of coverage ten markets.

Page 14: E Comm. Failures+Reasons

Yadayada.com Products: Browser and portal technologies for PDAs and smartphones

Summary: Though it is not the most famous or highly monetized company on the list it is arguably the worst-managed and the only one with overtly fraudulent practices. The company pursued rapid growth and ambitious advertising even as they puffed up their total customer contracts to 12 times their actual number. Plagued by poor management, inadequate infrastructure, and numerous dissatisfied customers and cancelations, the company shut down in 2001. Reportedly, several laid-off employees never got their contractually-mandated severance, and the CEO fled to Canada to dodge them and the IRS.

Page 15: E Comm. Failures+Reasons

Flooz.com Products: Online currency

Celebrity Spokesperson: Whoopie Goldberg

Summary: The concept is simple: buy online currency to give as gifts, so that friends and family can shop online without a credit card. However, Flooz made a lot of wrong turns in attempting to establish their online currency business. Their high-profile celebrity endorsement did not help them. Their limited partnerships made their online money nearly as useless as Monopoly money. There was not specific target demographic for their product. All this and rampant overspending sunk the company, leaving their customers with worthless fake money they couldn’t spend anywhere.

Page 16: E Comm. Failures+Reasons

Boo.comProducts: Clothing

Venture Capital: $135 million

Summary: The only non-American company on the list, Boo.com attempted to sell clothing and apparel to various countries worldwide. Though admirably ambitious, their pursuit of growth was engaged too quickly and fervently, burning through investors’ money at an amazing rate. The site was also laden down with Flash and Javascript, which was very slow to load over dialup connections, the norm at the time. Though the founders expected to continue growth via new rounds of investment, the money simply ceased flowing in 2000, and boo.com withered away.

Page 17: E Comm. Failures+Reasons

Kozmo.com Products: Home Delivery of various goods

Employees: 1,100

Summary: Kozmo was certainly well-loved in the areas it serviced; it was a web-based delivery service that delivered videos, food and snacks, and various goods to their customers. They soon learned that with no minimum order and free delivery, their overhead far exceeded revenue, as orders were often very small (a single candy bar, for example). They attempted to shore up these problems by implementing a $10 minimum order policy, but by then they had spent too much of their investment capital to continue operations.

Page 18: E Comm. Failures+Reasons

theglobe.com Products: Chat, message boards, original

content

Founders: Stephan Paternot and Todd Krizleman

Summary: Touted by some as the original social network, founder Stephan Paternot gained greater notoriety as the poster child for the excess and eccentricity of dotcom millionaires when he was filmed at a nightclub in leather pants, boasting about his success and wanton hedonism. The site grew on investment and market cap, but as investors became skeptical of the internet’s moneymaking power, stock prices dropped dramatically. Rightfully so: the company never once turned a profit.

Page 19: E Comm. Failures+Reasons

Pets.com Products: Chat, message boards, original

content

Mascot: Sock Puppet Dog

Summary: Pets.com had one of the most visible branding campaigns of the dotcom era, advertising in a variety of media, including one Superbowl ad. The company did brisk business, but due to poor management, they lost money on most of those sales, creating an ever-growing deficit. The company was dismantled in 2000; two of the company's most desirable assets, the domain name and the mascot, were sold for several thousand dollars.

Page 20: E Comm. Failures+Reasons

Nikolai.com

The company was a network of children focused web sites that included an online store Toyboutique.com, educational site and entertainment.

It had attracted 500,000 visitors a month

The day that the site folded, the founder, Isabel Hoffman, posted a bit of a rant about how people don't care about children etc.,

Her main point is that she (an independent content creator) could not get the big players to buy into her plans - therefore she had no "buyer" for what she was producing.


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