Egghead.com

Egghead Software, a deep-rooted traditional chain retailer specializing in computer software and peripherals, had established a nationwide chain of mall and shopping center stores and a well-organized national brand. In early 1998, the company management a highly unusual and perhaps unprecedented decision: the company closed all its stores in North America and moved its retail business exclusively on the Web. This rejection of the market in favor of the marketspace illustrates the differences in … Read more »

Egghead Software, a deep-rooted traditional chain retailer specializing in computer software and peripherals, had established a nationwide chain of mall and shopping center stores and a well-organized national brand. In early 1998, the company management a highly unusual and perhaps unprecedented decision: the company closed all its stores in North America and moved its retail business exclusively on the Web. This rejection of the market in favor of the marketspace illustrates the differences in dealing with the retail business for “information products”, such as software and “physical products”, such as home furnishings or tools. The fact that software could be examined, sampled, bought, and even distributed on-line appears to egghead management were responsible for the high cost in PPE and work through physical retail no longer justified on the category. The brand promise egghead could be effectively implemented at a lower cost of operations on the web, and the web could start new sources of consumer value have the Egghead site used as the unique features and advantages of the digital environment.
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from
Jeffrey F. Rayport,
Jeremy B. Then,
Rob Schmults
Source: Harvard Business School
18 pages.
Release Date: 12 June 1998. Prod #: 898 283 PDF-ENG
Egghead.com HBR case solution