ToysRus.com failure and its causes..

Purpose of Toys R Us launched its e-commerce subsidiary (ToysRus.com) were hoping to reach and provide their customers the products and services whenever and wherever they need. In 1999, ToysRus.com had established as a premier online toy, video game and baby store outlet. Unfortunately failing to handle the orders flushed into its website, the company totally lost track of thousands of orders or failed to deliver them on time. Information on the Internet spreads like wild fire. If words of unhappiness are being spread around to potential customers, the reputation would be damaged. Therefore, poor order fulfillment had been affected ToysRus.com. The Federal Trade Commission was fined Toys R Us $350,000. Although the company had pumped millions of dollars into setting up its own online operation and distribution network for order fulfillment it had to announced 75% slump in profit 2000.


For our opinion when the big company intended to do business online they were forgetting some common factors that will affect their company during the holidays. Shipping takes man power especially during peak season. It tends to slow down simply by the volume of orders of the mail service industry receives in short period of time. Frankly, not all the companies have the capital to invest in such a large expansion. If they are going into the e-commerce industry, they can't avoid from not putting in that investment.


Other cause of failure is the inability of the customer to choose products that are more effectively sold online than in the real world. Clothing shopping online requires the customer to guess at what they had looked like in the garments presented on a website. Attempts to sell automobiles online without the test drive have been woefully unsuccessful. And even provisions are a hard sell, the people still want to pick out product that they look for and prefer in spite of having inconvenience to going out to do it themselves.


On the other hand, the failure cause is delivery stock to the customer is not on time. As we should know that, getting customer to the site is one thing, while delivering is another thing. Bricks and mortar retailers have no such problems. Failure to deliver the ordered stock on time to customers caused eToys (Toyrus Company) to give away hundreds of $US100 vouchers to displeased customers.