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Egghead Software

Retail store selling all tech-related products
Amazon Cemetery
GENERAL INFORMATION
Category:
Software & Hardware
Started:
1984
BUSINESS FAILURE
Cause:
Acquisition Flu
Closed:
2001

Description

Egghead Software was a hardware, software, and computer accessories store initially located in Bellevue, Washington. 

It was founded by Victor D. Alhadeff in 1984 after he observed that the computer store experience was too daunting for non-tech savvy customers. Egghead’s goal from the beginning was to make the experience less intimidating and more engaging for the average user. To do this, Egghead presented a warm and welcoming brand image with its quirky cartoon mascot, Professor Egghead. In addition to that, Egghead’s staff went through intensive training so they could explain the computer products in simple terms for people from all walks of life.

Egghead had a selection of around 1300 titles that were available for discounted prices. Due to its unique approach and low prices, Egghead soon came into the limelight and its sales took off. It started serving corporate customers including Fortune 500 companies such as IBM and Boeing. This helped Egghead expand its business as it opened stores in several new locations. In the 1990s, the company faced financial issues due to competition from other stores and was forced to shut down its brick and mortar business. Instead, Egghead turned into Egghead.com and started selling products through the internet, phone, and catalog.

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Cause of Failure

By 2001, Egghead had filed for bankruptcy and had stopped taking orders from its website. In the same year, Amazon bought Egghead’s assets in bankruptcy court for $6.1 million. The e-commerce giant had plans to relaunch Egghead. According to Amazon, it had bought Egghead’s assets to leverage the strength of its brand name and to bring new customers to Amazon. The company saw value in the Egghead brand and wanted to combine it with Amazon to create a better service.

According to an Amazon spokesperson, the Egghead site was going to be like the co-branded ones Amazon hosts for Target and Borders. This meant the site would look like Amazon’s other pages but would contain some unique products. As of 2020, Egghead.com redirects to Amazon’s electronic store, which is in line with the more recent trend for Amazon to absorb all its subsidiary brands into the primary Amazon brand (and the Amazon.com website).

References

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