Mr James McDaniel

 Mad Hats

To: Mr. Dean Taker

From: Group 46

Date: February 24, 2016

RE: Management Data Analysis

Hello Mr. Taker,

  For the management section of this assignment you asked to,” Identify the factors that drive customers away from a website and contribute to cart abandonment?” and to,” estimate the dollar amount of sales that MAD Hats lost in 2015 due to these factors.” Since Mad Hats was running a web 1.0 website, It was important to gather a list of things that a majority of online consumers loved about e-commerce and m-commerce websites as well as things that they didn’t like:

Things people like about E commerce and M-Commerce:

• Organized Search
• Used detailed descriptions
• Suggest other items
• Make security a priority.

Things people don’t like about E-commerce and M-Commerce:

• Running old software that does not support any of the previous features
• Laggy / slow website
• Bury shipping charges
• Make false promises
• Skimp on customer service

    Not being able to provide the various features that customers are use to seeing on other E-commerce and M-commerce websites is one of the main reasons why Mad Hats, specifically, is facing a large amount of cart abandonment. Furthermore, the reason why they haven’t been seeing any effort to rectify the problem is due to a dysfunctional IT management department.

Problems with IT Management:

   The main problem with IT management is that it really has no vision on how to improve conditions for the company in the future. Its main concern is with “putting out fires” or trying to solve current problems instead of thinking in the long run on what the IT department needs to do to become better. Additionally, the IT department established a list of things that it could do to improve but hasn’t really done anything to enact on any of their objectives.

Reasons for Cart Abandonment:

    Website platform is still using web 1.0 instead of 2.0 so it cant really meet basic customer expectations of a normal ecommerce website. Most Ecommerce website are run on Web 2.0 so most customers are use to having features on a 2.0 web on most ecommerce websites and its disappointing when a site is running an older version.

 cart abandonment is a serious reoccurring problem for E-Commerce businesses. The current average for cart abandonment for 2015 is 68.63% for all E-commerce business.  is Since most online consumers like to shop online due to fact that it is fast and saves time from making that trip to the store. Studies show that a person is more likely to abandon a shopping cart if it takes too long to purchase and order a product. This is the case for made hats when they use a web platform that is too outdated to meet consumers expectations largely crippling the consumers shopping experience.

How to calculate loss:

   In order to calculate the exact amount of money that Mad hats lost due to E commerce conundrums, you first had to compare its earnings to its previous year (specifically 2011).

Using the numbers from the income statement, 2015 sales revenue ($11,138,000) multiplied by the percentage of E-commerce sales in 2011 (0.9570) equals $10,659,066. Next, multiply $11,138,000 by 0.6980. This equals $7,774,324. When you subtract $10,659,066 by $7,774,324 this will allow you to see how much money was loss in E-commerce and M-Commerce as a whole ($2,884,742). It is suggested to calculate loss this way because it basically tells you that if the company had made the same amount of sales revenue as it did in 2015 the only difference would be in how those sales were distributed.

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