What are the Contributing Factors for Business Success and Failure in B2C E-Commerce

1. What are the Contributing Factors for Business Success and Failure in B2C E-Commerce By Adam Morte Keely Ritchie-Boland Thomas Rollino

2. E-Commerce • The buying and selling of goods and services over public and/or private computer networks • Becoming a fundamental way of processing transactions between buyers and sellers • Internet is now an important marketplace for businesses • 66% of adult Americans now use the internet

3. B2C E-Commerce Sellers are organizations Buyers are individuals B2C e-commerce is a multi-billion dollar industry Our research topic: “What are the contributing factors for business success and failure in B2C e-commerce”

4. Case Studies of 6 B2C E-Commerce Businesses • Three successful: • Webvan.com • Pets.com • Furniture.com • Three unsuccessful • Amazon.com • Netflix.com • Dell.com

5. Webvan.com • Online grocery business that delivered products to customer’s homes within a 30-minute window of their choosing • Launched in the San Francisco, California in 1999 • Went public in November 1999, stock price $30 • By summer 2001, stock price $0.06 • Shut down operations and filed for Chapter 11 bankruptcy protection

6. Webvan.com Cont. • Too big too fast • Focused on short-term profitability over long-term growth • Too much investment in infrastructure • Signed $1 billion contract to build a string of high-tech warehouses worth about $30 million each • Doing it all on their own • Built its own infrastructure to deliver groceries instead of partnering with a click-and-mortar

7. Pets.com • Pet supply website that sold pet accessories and supplies • Considered a leading icon of dot-com bubble • Widely popular sock puppet spokesdog • Went public in February 2000 • On November 6, 2000, the company closed its doors while it still had a positive net worth

8. Pets.com Cont. • Highly competitive arena • Competing with many click-and-mortar pet supply businesses • Financial problems • Significant investments in infrastructure • Operating expenses out of hand • Consumer had no reason to shop at Pets.com

9. Furniture.com • Online furniture store • Launched in 1998 • Filed IPO in January 2000 • It became know that company had lost $46.5 million in 1999 • Withdrew IPO in June 2000 • In November the company shut down

10. Furniture.com • High shipping costs • Poorly built back-end computer systems • Many shipments were shipped without charging a proper price for them, to the wrong place, or not at all • Product was not suited to e-commerce • Too expensive, too large, and no touch and feel

11. Amazon.com Sells books and many other products Developed in a garage in Settle in 1994 In 1999 sales exceeded $1 billion Survived dot-com burst In 2006, company reported $10.71 billion in revenue

12. Amazon.com Cont. • Growth over profit • Put money into expanding their company • Online community • Connects people around the world • Inventive ideas • zShops • Free shipping promotion

13. Netflix.com • Internet-based DVD rental service • Invented and dominate the DVD rental market • Over 6.8 million subscribers in United States

14. Netflix.com Cont. • “Moneyball” Strategy • Company uses data to make decisions • Partnerships/Subsidaries • Partnership with Best Buy to sell DVDs • Red Envelope Entertainment Group subsidary

15. Dell.com • Sells computer systems directly to customers • Builds computers to meet customers needs and wants • In 2006 revenues totaled $57.9 billion

16. Dell.com Cont. • Automated e-commerce network • Robots are installed on assembly lines • Radio powered ID chips • Make tasks much easier to accomplish

17. Recommendations Sell the right product Properly manage finances Partnerships Focus on growth over profits Inventive ideas

18. Scope of Further Work Focus on specific sectors within the realm of B2C e-commerce businesses Focus on pure B2C e-commerce businesses Focus on click-and-mortar e-commerce businesses