E-Commerce Failure (week 3)

No doubt about it, if there is a success there must have a failures. IBM’s World Avenue Mall is one of the main failures of E-Commerce.

The reason is because IBM was probably launched too early before online usage became sufficiently popular to justify IBM’s investment in that project. Merchants participating in the World Avenue Mall also complained that IBM did not adequately promote the project. IBM claims it learned another valuable lesson from the project that IBM’s name alone is not sufficient to bring enough customers traffic to the site to make it a success.

One year after it was launched, that failure was attributed in the press to a variety of factors including the weakness in the music industry that year leading to deep discounting by retailers because the site was not easy to use, consumers seemed to prefer ordering through traditional stores.

As a conclusion, it is not surprisingly that there are also problems which may slow down the growth of e-commerce. The U.S. Federal Communications Commission may permit telephone companies to charge special rates for accessing the Internet. U.S. state governments continue to try to collect sales and use taxes on transactions consummated over the Internet. Some traditional "brick-and-mortar" stores are feeling threatened by Internet-only retailers, and are pressuring major manufacturers to stop selling through that channel.