Case Study: The Rise And Demise Of Brandwise.com

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New York -- One year ago the future seemed bright for Brandwise.com.

Riding the wave of e-commerce mania, the cyber start-up came into being buoyed by a novel business plan and rock-solid backers. The concept: To create a space where consumers can research and compare major appliance products, and then buy them -- in-store or online -- through a network of affiliated dealers.

The company's credentials were impeccable. CEO Kathy Misunas was a former travel industry executive who had a hand in the creation of Travelocity.com. Her partners included The Hearst Corporation, whose Good Housekeeping Institute would supply ratings of white goods; The Boston Consulting Group, an Internet research firm; and Whirlpool, which was eager to tap into the new distribution channel.

"We're the next step in the evolution of e-commerce," she told TWICE at the time.

But early this spring, just as the company broadened its scope to include consumer electronics, the experiment began to sour, and by late last month, Brandwise laid off most of its staff and shut down its consumer site.

So what went wrong?

According to Misunas, like anything else, it was all in the timing. On one hand, Brandwise's was premature, as consumers have not yet warmed to the notion of making big-ticket purchases online. "The whole concept for the home durable space is a little ahead of its time," she observed. "The readiness of people to buy some of the high-ticket items wasn't there."

What was there, however, was a workable click & mortar model -- a mix, said Misunas, that consumers like. But once again the timing was off, and just as Brandwise branched out into electronics by forging an affiliation with 800.COM, the NASDAQ plummeted and investors began calling in their e-tailing chips.

"It became a financing issue," Misunas continued. "We had to continually feed the beast," and eventually her backers balked. "Timing is everything," she said.

In the weeks ahead, Misunas will be evaluating the various assets that Brandwise accumulated over its short life, including databases and relationships with vendors and dealers. There's also the b-to-b side of the operation, which provides information and technology products to retailers, manufacturers and other website owners. "The b-to-b plan is solid," she noted, "and we'll have to see if there is still some strategy to pull it off."

Similarly, Misunas still believes in the concept behind her consumer shopping service, but after the "amazing amount of sorrow" that the demise of Brandwise wrought, she's content to leave the effort to others. "At some point something similar to this will be resurrected," she reflected, "and someone will hit it big."

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