shipping, returns, refunds and exchanges. Since boo.com was purely a virtual
company, consumers were not clear about how customer relations issues
could be resolved. The bottom line is that online customers were not as savvy
with technology as boo.com presumed. They were also not patient enough to
wait for hours for boo.com’s interactive features to load or to restart their
computers when the features of the website ground their systems to a halt.
The consumer market was unready for boo.com.
The second wrong assumption of boo.com was in relation to the competi-
tive environment. Boo.com had huge capital investment backing which gave
the company a lot of confidence in its leverage over competitors. However,
the company wrongly identified ‘supposed’ competitors as book retailer
amazon.com and travel and tourism business lastminute.com. These compa-
nies were channel competitors because they were virtual companies like
boo.com. They were however not sector competitors because they did not sell
fashion goods. Their selling strategies were different because they sold low-
involvement consumer goods and services that didn’t require extended eval-
uations by consumers. Although these companies had an online market, they
were able to compete on price and service levels because of their specific
sector characteristics. Boo.com measured itself against companies such as
these and therefore failed to understand its competitive market.
In addition, the socio-cultural environment at the time of boo.com’s launch
had specific attributes that the company seemingly ignored. During the period
of e-retail emergence, the consumer society was still at the stage where it was
being transformed by information technology (info-tech). There were there-
fore several uncertainties regarding info-tech, which could not be clarified as
info-tech itself was in its infancy. Unlike today, consumers of that period were
not mentally and behaviorally influenced by info-tech. The market therefore
needed companies that offered concrete solutions online in an easy and
understandable format. Boo.com was unable to fit this requirement.
Error no. 4: over-estimated forecasts Another major mistake made
by boo.com is related to unrealistically escalated sales and consumer traffic
forecasts. In this regard, boo.com made yet more assumptions that resulted in
over-ambitious sales projections.
The main assumption was based on the idea that the trendy products and
the savvy technology offered were good enough to attract and retain
customers and also boost sales. Although the website attracted an ample
number of visitors, the online traffic figures were significantly below the
projections of the company. Also, only a small percentage of those that visited
the website actually completed their shopping. Boo.com failed to recognize
that building online consumer traffic and loyalty required time but could also
be destroyed in very little time. Online consumers also exhibit certain attrib-
utes that are significantly different from offline consumers and boo.com
ignored this apparent fact. For example, online consumers need a high-impact
chapter 10 291case illustrations