March 10th marks 20 years since the dot-com crash – the day the markets peaked and subsequently fell sharply. But what caused it and how can another be prevented?
“The dot-com crash was facilitated by a combination of poor digital customer experience and companies overpromising and underdelivering. Companies were getting overvalued in the stock market, and the catalyst was Japan entering a recession which caused a domino effect of global stock sell-off that ended with the dot-com crash.
“The dot-com crash has taught us many lessons, namely the importance of good customer experience in digital commerce and doing business on the internet. Many eCommerce players operating at the turn of the millennium were pouring tons of money into advertising and promotion to increase their market and mind share. Conversely, little to no attention was paid to customer experience, and the loss leader strategy did nothing to attract customers who were authentically interested in buying from these businesses. In particular, websites were getting increasingly bloated with content and effects that outscaled the growth of internet speeds available to consumers at the time, leaving them with a miserable experience browsing these websites. One of the businesses that exemplified these digital experience problems in the UK was clothing retailer Boo.com, which went bust a few months later in May 2000.
“Two decades on from the bubble bursting, organisations, whether they’re B2C retailers or B2B businesses, should be considering the solutions they use (including commerce platforms) based on their digital maturity. The digital maturity of a business is a measure of how ready they are for adopting cutting-edge technology and software, based on their current adoption level of tech in their projects, workflow and day-to-day operations. Online retailers should be shopping for solutions at a level proportional to their digital maturity. For instance, a digitally-advanced company that’s adopted modern ways of working and uses the latest tech stacks should consider a modern, headless commerce platform over a legacy suite, which provides retailers’ IT teams with the ability to pivot, make decisions quickly, experiment, test and innovate.”