Pets.com is an example of E-Commerce failure. Pets.com was a San Francisco-based e-tailer existing only as a virtual firm that offered pet products, information, and resources to consumers. This website was launched by Greg McLemore in 1998 about the same time as several other online firms offering pets products. Therefore, Petstore.com, Petopia.com, Petsmart.com, and PetPlanet.com were the major competitors in the online pet industry although Pets.com is the first virtual pet stores enter into the market.
In the beginning of 1999, Pets.com appeared to be on a road to success. By October of year 2000, Pets.com decided to close its door as it realized that they never brought profits for the online firm.
There are several factors that contribute to the failure of Pets.com:
1. An unsustainable business model and unachievable expectations
Basically, Pets.com “bet everything on the market”. Pets.com acquired large amounts of funding from venture capitalists without demonstrating any background of achievements or success. Pets.com assumed that the market and its revenues would grow quickly enough to earn for a profit before the funding money was exhausted. Overestimated the number of online customers by e–tailer also is a reason of the failure of Pets.com.
2. Pets.com went public too soon and spent money too quickly
The main reason that Pets.com spent money too quickly is the excessive spending on marketing and advertising. During its lifetime Pets.com spent more than $70 million on marketing and an average of $400 to acquire each new customer. Pets.com made advertisement more heavily than another online pet e-tailer. The excessive advertising made by Pets.com did not only benefit them, it also helped the entire online pet industry to increase sales.
3. Failed to position itself in an effective manner.
It is necessary to provide customers with a good reason for its existence and to satisfy their needs. Pets.com just offered the products that could be easily obtained at the nearby retail stores and pet information about health, grooming, behavior and etc. that did not justify a virtual shopping trip.
4. In a very competitive arena
The online pet market was a crowded one in the time period when Pets.com was still alive, which include Petstore.com, Petopia.com, Petsmart.com, and PetPlanet.com. Pets.com failed to compete with a unique positioning strategy but instead decided to compete with low prices just like its competitors.
In the beginning of 1999, Pets.com appeared to be on a road to success. By October of year 2000, Pets.com decided to close its door as it realized that they never brought profits for the online firm.
There are several factors that contribute to the failure of Pets.com:
1. An unsustainable business model and unachievable expectations
Basically, Pets.com “bet everything on the market”. Pets.com acquired large amounts of funding from venture capitalists without demonstrating any background of achievements or success. Pets.com assumed that the market and its revenues would grow quickly enough to earn for a profit before the funding money was exhausted. Overestimated the number of online customers by e–tailer also is a reason of the failure of Pets.com.
2. Pets.com went public too soon and spent money too quickly
The main reason that Pets.com spent money too quickly is the excessive spending on marketing and advertising. During its lifetime Pets.com spent more than $70 million on marketing and an average of $400 to acquire each new customer. Pets.com made advertisement more heavily than another online pet e-tailer. The excessive advertising made by Pets.com did not only benefit them, it also helped the entire online pet industry to increase sales.
3. Failed to position itself in an effective manner.
It is necessary to provide customers with a good reason for its existence and to satisfy their needs. Pets.com just offered the products that could be easily obtained at the nearby retail stores and pet information about health, grooming, behavior and etc. that did not justify a virtual shopping trip.
4. In a very competitive arena
The online pet market was a crowded one in the time period when Pets.com was still alive, which include Petstore.com, Petopia.com, Petsmart.com, and PetPlanet.com. Pets.com failed to compete with a unique positioning strategy but instead decided to compete with low prices just like its competitors.
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