Dot-Com Conversion at Egghead

Abstract

Egghead Software, Inc.’s evolution from a multichannel, traditional retailer of computer software and hardware into an e-commerce-only channel parallels the rise and fall of many e-commerce ventures. At one time, Egghead had a well-defined multichannel strategy, with a direct-sales unit focused on corporate, government, and education customers (CGE); a retail-store unit focused on early adopters of computer software and hardware; and a catalog and call-center unit that targeted consumers and small businesses. Struggling to survive in the face of increased competition and declining margins, Egghead made a series of decisions to sell its CGE unit and abandon its retail stores and catalog operations, shifting all of its resources into an e-commerce strategy. This shift was cited by many journalists and analysts as a sign that e-commerce was here to stay and highlighted Egghead.com as an example that traditional retailers should follow or risk becoming obsolete (Wilde, 1999). This article reviews the history of Egghead, focusing on the decisions and events that led to its demise.