An Example of the E-commerce Failure

The example of the e-commerce failure is Toys R Us Company. This company is the leading retailers of toys, children's apparel and baby products. In order to provide the customers the products and services whenever and wherever they need, Toys R Us announced its plans to create an e-commerce subsidiary- ToysRus.com.

In 1999, Toys R us.com has established as a premier online toy, video game and baby store outlet. Failing to handle the orders flushed into its website, the company totally lost track of thousands of orders or failed to deliver them on time. The Federal Trade Commission fined Toys R Us $350,000. Although the company had pumped millions of dollars into setting up its own online operation and distribution network for order fulfillment it had to announced 75% slump in profit 2000.

The causes of the failure of Toys R Us.com are when the big company jump into the e-commerce system, they forget some common factors that will affect their company during the holidays. Shipping product takes man power and during the holiday season, it tends to slow down process by the huge volume of orders of the mail service industry receives in that short period of time. In fact, not all the companies have the capital to invest in such a large expansion. If they are going into the e-commerce industry, they can't afford not to put in that investment.
The other causes of the e-commerce failure in the Toys R Us company is the limited choice for the customer. Thus, it is better for customer to chose products that are more effectively in the real world. Clothing shopping online requires the customer to guess at what they had looked like in the garments presented on a Web site. Attempts to sell automobiles online without the test drive that bring inconvenience to customers.

On the other hands, the failure cause is delivery the stock to customer is not on time. Bricks and mortar retailers have no such problems. Failure to deliver the ordered stock on time to customers caused eToys (Toyrus Company) to give away hundreds of $US100 vouchers to displeased consumers. As a saler, provide the product to the customers on time is a major resposiblity and those who fail to do so will getting out from market.