Egghead
...ptcy (Computerworld). Shortly afterwards, bricks-and-mortar-based Fry’s Electronics agreed to buy all of Egghead’s assets in order to keep the site alive. However, the deal was later nullified because Egghead failed to provide Fry’s with certain financial documents (Computerworld). Most recently, Amazon.com bought Egghead’s name and intellectual property for $6.1 million (Computerworld). None of Egghead’s physical assets were involved in this transaction. So, just who are you calling Egghead? Egghead has changed hands four times in the past three years. Now this is certainly a sign of a company in trouble, but Egghead’s problems date back farther than 1999. It is my belief that two crucial decisions doomed the company; first, the decision to completely eliminate the bricks-and-mortar stores, and second, the decision to “diversify” their product line. Many companies make the mistake of not gathering enough information before venturing into e-commerce. It’s one of the few trades where “sounds like a good idea,” and “everyone else is doing it,” seem to be good enough reasons to base a decision upon. Many companies who have used Websites to compliment the image and operations of their bricks-and-mortar stores have found great success. Many such companies who have rushed into a Website without really knowing why have failed miserably. But when you talk about making a transition from being strictly a bricks-and-mortar company to becoming a strictly online company, you’re opening a whole new can of worms. First of all, you are catering to an entirely different audience. For the most part, people bought things from Egghead Discount Software because they like shopping at physical stores, among other reasons. Egghead was selling products to “computer-smart” people. If their customers wanted to shop on the Web, they would have. So, based on this alone they probably lost a good deal of their usual clientele. Fear of shopping on the Internet due to perceived security concerns and complexity was probably enough to scare off the few remaining Egghead Discount Software customers. These reasons, coupled with issues such as successfully transferring image with the transition from bricks to clicks, were probably enough to cause a good majority of Egghead’s faithful customers to lose interest. So basically they had to start from square one. Now, many people who would typically buy software on the Web would stumble on the new Egghead.com site and say, “Hmmm, Egghead… I’ve heard of them. They know a thing or two about software,” and this caused a significant surge in sales in the earl...