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Dot-Com Death by Degrees

By Keith Regan
Nov 17, 2000 2:24 PM PT

The headlines are daunting. Every day seems to bring at least one dot-com failure to the fore. But for all the wisdom of trying to see the big picture, we need to zoom in and consider what this shakeout means for the individuals.

Dot-Com Death by Degrees

I'm not talking about employees. There's good evidence they're getting hired as fast as they're getting laid off.

I'm talking about the customers. Remember the customers? One by one, they're learning that e-commerce is no longer the cozy community it once was (or seemed), and that it's every man for himself when the money dries up.

Goodbye and Good Luck

As mortality stared them in the face, some dot-coms read the writing on the wall and planned ahead to leave this world with enough cash in the bank to cover their debts to society and their customers.

Others did not. And the most striking example of the latter category, by far, is

ShopLink operated in a narrow geographical area, mainly in New York and southern New England. It had an upscale focus, doing busy work for busy people, including grocery shopping, picking up dry cleaning and the like.

Well, on Tuesday, ShopLink turned out the lights for good, catching everyone who watched the company off guard. Some analysts had even pegged ShopLink as a potential beneficiary of the recent demise of, an online grocer whose headquarters were just down the street.

No Thank You, Don't Come Again

But those caught most off guard were ShopLink customers. By all accounts, the firm e-mailed a letter to its customers, slapped a copy up on the Web page and hit the highway. The letter noted that, as of that minute, "No associates will be available to handle your queries."

The letter goes on to tell customers so much more. Those shirts that we took the dry cleaners for you? You're going to have to get them yourselves. That prescription we were going to fill? Might be waiting at the drug store. Might not. Here are the phone numbers and addresses of the vendors we used. Good luck.

Oh -- and one more thing: "As a security precaution, we would strongly suggest that you alter any garage door access codes that have been communicated to us for delivery purposes, and remove any keys that may be stored in lockboxes."

Thanks a lot.

Saying Sorry

As you might expect, the letter closes with an apology from chief executive officer John R. Icke "for any inconvenience" that might have been created.

Now, I sympathize with Mr. Icke's plight, to an extent. But I don't, as it happens, buy his argument in the letter that capital markets are turning their backs on business-to-consumer Web sites "irrespective of their current performance and long-term value."

In any case, his customers deserved a whole lot more than "I'm sorry." Think of it -- a company that built its reputation on convenience leaving nothing but headaches for its customers.

How much does it take to realize you're going to come to work one morning and have to shut things down? Not too much. No Harvard MBA in the CFO's chair. No complex cash-burn matrix. Nothing except a little respect for the customer.

A Closer Look

Let's take a moment at this point to zoom in. An acquaintance of mine used ShopLink for several months. Now she's faced with a decision: Does she dial up another service? Peapod is operating in the neighborhood already, after all. Maybe she will.

But my guess is that while she drives around doing -- no, re-doing -- the tasks she contracted ShopLink to do for her, she will think twice about hiring another dot-com errand boy. The stain of this bad experience will color her entire view of the dot-com world.

Another acquaintance decided the day before ShopLink's demise to see if the service might simplify her frantic life a bit. She placed her first order a matter of hours before things went dark.

Now she doesn't know whether her credit card information is safe or if it was pilfered by an employee on the way out the door. And she can't get anyone at ShopLink to answer her questions. In other words, the frantic-meter in her life went way up, not down.

Dot-Com Dignity in Defeat

That's two very unhappy customers with stories to tell, stories they are already telling and re-telling to co-workers, friends and family, all of whom are potential customers of every e-tail site on the Web.

Will the sting wear off? You bet... over time. Will people take their stories of woe to heart? Some will... right away.

The diehard e-commerce believers will try to build a firewall, saying that the problems were Shoplink's alone. But the skeptics will use it as one more reason to spend their money only in stores with four walls and cash registers that make noise.

Maybe those burned will be brave enough to try again one day. But there is no way they'll ever forget. E-commerce already has enough hurdles standing in its path to wider acceptance. Does it really want to keep adding another one to the list?

What do you think? Let's talk about it.

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