To many people, the term “Electronic Commerce” means shopping on the part of the Internet or computer network. For example, I have experienced online shopping and bought some shirts from www.yaca-collection.com. In this situation, E-commerce has occurred in my daily life. Although there are many E-commerce succeed stories around the world, but it cannot deny that there are still some failure E-commerce stories. The example I want to use here is Toy “R” us, Inc.
Toy “R” us, Inc is the world's leading dedicated toy and baby products retailer with more than 1,500 freestanding destination toy and baby specialty stores worldwide. Decades ago, Toys R US' huge stores redefined how toys were sold, it was the first of a new breed of retailers later called "category killers", but today retailing mass merchants and discount giants Walmart and Target have eventually pushed the company to the edge of a competitive cliff.
Toy “R” us, Inc is the world's leading dedicated toy and baby products retailer with more than 1,500 freestanding destination toy and baby specialty stores worldwide. Decades ago, Toys R US' huge stores redefined how toys were sold, it was the first of a new breed of retailers later called "category killers", but today retailing mass merchants and discount giants Walmart and Target have eventually pushed the company to the edge of a competitive cliff. 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, ToysRus.com has established as a premier online toy, video game and baby store outlet. Tragedy happened at the end of 1999 when ToysRus.com did not prepare for the booming of the on-line Christmas shopping. In fact, ToysRus.com let their customer down very hard. It has failed 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 announce 75% slump in profits in 2000.
The causes of its failure……
From my point of view, the main problem for Toy “R” us failed was due to lack of knowledge about the e-commerce system. They failed to attempt some common factors that will affect their company during the holidays. For example, using man power for shipping product really take time especially during the holiday season and it tends to slow the process down simply by the sheer volume of orders receives in that short period of time. This caused the dissatisfaction of customer towards the e-commerce services and the company and finally the sales dropped.
Other than this, customers unable to choose products more effectively that sold online than in the real world is also one of the causes that it failed. Customers have to “guess” at what the toys had looked like when they shopped online. The people still prefer to pick out their own product that looks for. This is due to they have a perception that product in hand is more reality than product in picture.
Besides, the slow in delivery of stock to customer by the company also caused the failure of the e-commerce. As we should know that, getting customer to the site is one thing, while delivering is another thing. 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.
Improvements taken by Toy “R” us, Inv
The company had to change its ailing e-commerce strategy and operation. In 2000, Toys R us announced its Internet joint
venture with Amazon.com. Toys R us would take charge of buying and managing inventory while Amazon will oversee all web operations of order fulfillment, and customer service. Toys R us is now facing tense competition from giant Wal-Mart and KB Toys. Toys R us is trying hard to keep pioneer to drive further growth. They are planning in 2003 to follow in the footsteps of some other retailers by allowing customers to purchase merchandise online and pick it up in local stores and also allowing customers to return merchandise purchased online to stores in their area.Related Links
www.internetlibrary.com/cases/lib_case424.cfm
http://business.timesonline.co.uk/tol/business/article451511.ece
http://abcnews.go.com/Technology/wireStory?id=7242585
http://arstechnica.com/old/content/2004/06/3944.ars
now, the Toy "R" us company can still stand up and do their business. There are some branches in Malaysia, such as there is one in MidValley
ReplyDeleteWhile doing business on ecommerce platform some business are having fail. but lots of companies have success stories about ecommerce.
ReplyDeletei like toys...........
ReplyDelete