Are Dot-Com Wunderkinder Behind Holiday Failures?

The week before Christmas, U.S. talk radio shows and newspapers were buzzing with horror stories about dot-coms that were not going to be able to fulfill orders in time for the Christmas holiday.

The ripest target of these reports was Toysrus.com, the online branch of the brick-and-mortar superstore. After a string of e-commerce failures in 1999, the company staged an impressive comeback in November — only to find itself unable to fulfill a staggering amount of Christmas orders. As compensation, Toys “R” Us CEO John Barbour announced that disappointed customers would be receiving $100 (US$) gift certificates toward future purchases.

This unseemly episode gave the talking heads and other critics “evidence” that business conducted online is unsafe and unreliable, and prompted them to claim that these issues are emblematic of fatal flaws in the whole concept.

The Blame Game

In trying to identify the root of the problem, one Los Angeles-area radio talk show host took the debate to preposterous heights by attributing e-commerce failures to “irresponsible 20-somethings” who “lack business savvy.” He added that these entrepreneurs “made too much money too fast in incredible IPOs.”

Numerous callers were only too happy to call in and agree that these 20-somethings had made it “too big and too fast.” Few acknowledged that their brick-and-mortar counterparts also face these very same fulfillment issues, and even fewer made any kind of reasonable connection between youth and e-commerce failures.

Reality Check

The reality here is that many online stores are in need of revamping their customer service and fulfillment. Scalability issues still plague some of the more popular sites, and many potential customers complain that they are unable to access many of their favorites. Still others are having trouble with timely and effective customer service options, and the end result may well be that shoppers are turned back toward more traditional venues.

All the same, failures in the traditional brick-and-mortar world do not attract this type of over-the-top scapegoating. There are plenty of traditional businesses that are run by young entrepreneurs, and there are plenty of e-commerce sites that are run by white-haired blue bloods. After all, how can the Toys “R” Us debacle be blamed on young hotshots who got too rich, too fast?

The bottom line is that winners in business will share the same characteristics, no matter what their age is or which “space” they operate in. Successful companies will offer competitive pricing, strong customer service, and have minimal fulfillment issues, and the rest, as it always has, will take care of itself.