Magazine article Marketing

What Went So Horribly Wrong with Boo.com?

Magazine article Marketing

What Went So Horribly Wrong with Boo.com?

Article excerpt

It went from launch to crash in just six months. Ben Rosier conducts the post mortem of Boo.com

Online fashion and sports retailer Boo.com went into liquidation this week with the loss of 300 jobs -- so this is more of a 'brand post mortem'.

After months of hype and delay, Boo.com launched in November last year with some [pounds]90m backing from investors including Europ@web, Goldman Sachs and 21 Investimenti. It launched a TV ad push through BMP DDB.

The site used flashy graphics and featured a personal shopping assistant called Miss Boo. But consumers complained it was confusing and required a high-speed connection.

After failing to hit targets, the company fired 20% of its employees in January and began offering 40% discounts. February figures revealed the site had attracted just 500,000 unique visitors.

Burning cash on advertising and brand promotion, the company tried, and failed, to raise an extra [pounds]20m. However, liquidator KPMG seems confident of a quick sale.

We asked two dotcom experts to look at what went wrong. Cindy Greener is marketing director at management consultancy Cap Gemini. Felix Velarde is CEO of Head New Media, a web agency whose clients include Unilever, Mars and UDV.

VITAL SIGNS

Pre-November 1999 Raises $135m ([pounds]90m) from three main investors

November 1999 Multi-million pound ad campaign created by BMP DDB

January 2000 Sacks 20% of staff and sells stock at 40% discount

February 2000 Announces it has only 500,000 unique visitors

May 2000 Appeals for [pounds]20m more funding; fails and appoints KPMG as liquidator. Company is put up for sale.

DIAGNOSIS

Any company, be it a dotcom or a bricks-and-mortar operation, must be supported by a solid business plan that delivers the brand effectively.

Boo.com's initial success was due to its expertise in creating brand awareness. Its founders have admitted that they were not strong financial managers, and it appears that the operational side was weak as well.

One assumes money was spend advertising the brand and not on the less glamorous, but vital, areas of brand-building -- such as making each customer contact pleasurable and memorable, and ensuring goods are available and delivered to promise. It is easy to create hype by wowing your initial customers and driving word-of-mouth marketing, but the Boo. …

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