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Circuit City Closes Its Doors For Good
bsharma is amongst the hordes of people wanting us to share the news that long beleaguered retailer Circuit City has finally decided to close for good, asking for court approval to close the remaining 567 US stores. "Whalin said management mistakes over the past few years combined with the recession brought down Circuit City. 'This company made massive mistakes,' he said, citing a decision to get rid of sales people and other mismanagement. What's more, given the credit market freeze, Whalin added that no manufacturer wants to sell to any retailer who doesn't have money to pay for the merchandise. At the same time, Whalin said there's still a very slim chance that one or more firms that have expressed an interest in buying Circuit City could still buy it out of bankruptcy over the next few days."
The main mistake Circuit City made IMHO was that their prices were always higher than their primary competitors (Best Buy, CompUSA, etc.). They had a policy that they would match the price of any competitor; however, they wouldn't beat the competitor's price. Of course, their high pressure sales tactics didn't help either but my main gripe was their advertised prices.
Only matching a competitor's price (and not beating the price) meant they were basically forcing their customers to do their job, i.e. price shop their competition. If I find two stores selling the same item, and one store is less than the other, I'm going to the lower priced store. The only time I'd consider going to the higher priced store would be if they gave me a price LOWER than their competitor. A price match is meaningless.
Maybe they changed their policy in later years (after I stopped visiting their stores), I don't know, but the negative perception I developed about them persists to this day. And now they're gone. I wonder if they learned anything?
The NSA: The only part of the US government that actually listens.
I guess the business model of high prices, unfriendly sales staff and poor quality merchandise didn't pan out for them.
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Their own bankruptcy?
Consumers are clearly using their purchase power to go where the deals are (online). BB will be the next to go if they don't compete.
...what's to stop Best Buy from inflating their already-borderline-ridiculous prices even further?
Target, Wallmart, Sam's Club, local retailers, amazon, newegg, froogle, etc...
There's still Office Depot and similar stores, which you may have noticed are moving into consumer electronics to a degree (e.g., that's where I got my TV.) And, of course, the elephant in the living room: online competition. For items like TV's and stereos, most people are probably more comfortable buying something they can actually see and hear in the store -- but when it comes to, say, buying a printer or an external hard drive, there's really no reason to shop brick-and-mortar.
The correlation between ignorance of statistics and using "correlation is not causation" as an argument is close to 1.
But DIVX was just about to take off!
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You know, I was thinking the same thing. It seems to me that brick and mortar companies are going to have to re-invent themselves as true customer service companies if they want to stay in business. They are never going to beat online retailers on price even with shipping costs. If BB can provide informed sales staff and a good selection of products that is at least close to online prices they may have a chance.
A few years ago, all the Radio Shacks in Canada were changed into mini "Circuit Cities," branded as "The Source - By Circuit City" - They were the same size as a Radio Shack, but under the Circuit City brand. I wonder what will happen to them...
Here's a picture of one:
http://flickr.com/photos/photofinderguy/2472113998/
An aunt of mine recently decided to splurge on an HDTV. She'd looked at what was available at Best Buy, Sears, etc. and found a nice 40" Sony at Best Buy that she really liked. But she wanted to buy the tv from a local store, not a big box store, for a number of reasons. She's the kind of person who believes in "mom & pop" types of outfits. She's also a photographer and wanted to use the HDTV to view photos from her computer. We went to the local store she was interested in and found the same Sony there. The sales rep bent over backwards to help us out and answer all our questions. I was impressed when my aunt started asking about viewing photos and pulled a photo CD out of her purse. The guy ran around the store, found a DVD player, hooked it up to the tv she was interested in, and let her view the photos. Then she started noticing some of the other HDTV's there and asked if she could view the photos on any of them. So the guy figured out where the feed to all the tvs in that section was and hooked the DVD player up to it, so my aunt was able to look at her photos on a dozen different HDTVs all at the same time.
We decided to do a little more shopping around and grab some lunch before making a decision. We stopped back at the Best Buy and saw that it was selling the HDTV for something like $200 less than the local store. We went back to the local place and asked if they'd match the price. The guy ran off for a few seconds and came back and said they could but then couldn't offer us the free local delivery they typically provide. Big deal - we were planning on taking the tv with us anyway. And the local shop offers full warranty & repair service AND will come pick up the tv for free if any work needs to be done on it.
You'll NEVER get those sorts of services from places like Best Buy. My aunt was treated amazingly well throughout the experience, and the local support she'll get is top notch. If she ever has any questions/problems she can call the store and they'll help her out.
My guess is that as the economy manages to sort itself out over the next year or so you'll see a comeback in smaller individual stores, local/regional chains, etc. that provide MUCH better service. I think consumers are becoming more and more savvy when it comes to realizing that they need to think about things like after-sale service & support, and the big box stores simply don't provide that with any sense of reliability or consistency.
Of course, the moral of your story is that the little mom 'n pop store bent over backwards to give you high quality service; but only ended up getting best buy prices... That isn't really an inspiring tale of the victory of the little guy.
Well, I have had experience with the old school way of doing things, Beast Buy, Comp Useless, and Circuit Shitty. The advantage they had over the smaller shops is a huge selection and usually steep discounts on big ticket items. The drawback was usually that you got raped on the peripherals and accessories ($20 printer cables you could buy for $2 anyone?) and their staff was usually pig ignorant and useless. Not only that but you also had to deal with scumfuck corporate tactics on returns, were treated like a thief every time you left the stores with mandatory bag searches, etc. Ultimately I both hated these stores but knew they were the only option when I needed something today and couldn't wait for a delivery. The other problem with buying online, especially electronics, is that returns become a nightmare. If I'm buying a big ticket product, I need a place I can return it to if it's broken and I don't want to eat S&H along with 15% restocking fees.
The newer model seems to be represented by the reborn Comp Useless (purchased and owned by Tiger Direct) and the Apple Stores. In the Comp store by me, they're shucked the generalist crap and are tightly focused on computers and electronics. They carry a full range of parts and you can pick out anything you need to build your computer. The tech desks are at the front of the store and there's no walls, it's just you and them. If the people on the sales floor don't have a clue, you can go up and ask a tech and get an answer. I don't know what they're paid but they don't seem as unqualified as the Geek Squad. So far, I've not yet been disappointed but am still keeping a wary eye on them.
The nice part about the Apple store is how they're heavily staffed with people to answer questions and all the toys are out there for you to play with. The traditional big box stores leave you to find your product on your own. As a geek I can muddle along but I have no idea how Joe NotGeek can find what he needs. Apple also schedules classes, has the genius bar (yes, it is a stupid name) open for people to ask whatever questions they need, and tries to demystify computing as much as possible. I won't say they're entirely successful but they are a huge improvement over what you get at the traditional box stores which is nothing.
What it really comes down to is that some business models can be run along the lines of McDonald's and some simply can't. In the restaurant field there will be people who pay $100 for a fine steak and those who will be satisfied with a crappy burger spanked together by surly wage slaves. McDonald's has been enormously successful and will remain so, even as there's a market segment for higher quality fast food stand-in's like Panera's and Quizno's.
The big box stores were the McDonaldizing of electronics and big ticket consumer products. The funny thing is that I thought they would remain as successful as McDonald's and for the same reason. Oddly enough, it looks like the cost-cutting I took for making them profitable did away with whatever vestige of quality that kept people shopping there. It will be interesting to see if there's more of a trend towards competing on service and knowledgeable staffing. Hell, even McDonald's is trying to take a stab at entering the real food market with Chipolte.
One other factor that might also come into play is America's acceptance of cheaply manufactured disposable junk. In good times, people were content to buy a big screen that might be dead in five years because it could always be chucked for the next great thing. People didn't want reliability and durability in their cars because they were trading up every three years. When income is no longer quite so disposable, will people be willing to pay more for quality with the understanding that it costs less in the long-term?
Kwisatz Haderach
Sell the spice to CHOAM
This Mahdi took Shaddam's Throne
You should have paid the $220 more at the local store. They provided the excellent service and deserve it.
Unless you want everyone to provide the same crappy service for cheap prices.
The sales guy earned it, don't you think????
If you ever wonder why you get crappy service at the big box store, it is because when price is all that matters to the customer, then having better informed (higher cost) sales reps is an expense they can't afford.
1) Price
2) Quality
3) Service
Pick any two. If you want better service, reward it.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
I think there was a factory in Argentina where the union kept the shop going after the owners went bust.
Actually, there were close to 200 of them. You can learn quite a lot about it here, and in a couple of months, you should be able to buy my translation of The Silent Change, which is mentioned there.
What if I do the same thing, and I do get different results?
Sorry, but Wal-Mart simply isn't competitive with online retailers for electronics and computers. First, as you noted, they only stock limited items. But, if they don't have what you want, it DOES matter, because you not only wasted a trip (time and gas), but you had to deal with the hell of going to Wal-Mart and being around their annoying customers. Maybe Wal-Mart customers aren't so bad where you live, but here in Arizona, going to a Wal-Mart is not a fun experience, unless you like tripping over countless undisciplined children running amok and throngs of non-English speaking customers who walk very slowly and always insist on taking up the entire aisle, instead of staying to one side so you can get by. And good luck not having someone run into your car in the parking lot.
For clothes, housewares, and many other goods, Target is a much, much nicer and less stressful place to shop, but they don't have many computer parts.
While I do agree with you, I'll take a moment to play Devil's advocate. Small store owners can be dicks just like the big store owners. I do a lot of grocery shopping at hole in the wall ethnic markets and the staff there can be every bit as surly as disaffected slackers in big box stores. The difference (usually) is that good performance goes unrewarded at the big box stores, actually punished at Circuit City since they fired their top salespeople. In a small shop environment, it should be possible for a good salesman to be rewarded for his efforts, therefore you would expect more positive reinforcement and better reps there.
I worked for a computer guy back in '99 as the box stores were rising in prominence. The mom and pop shops couldn't compete with the box stores on price and this guy decided to add PC hardware to his midrange business that was slowly dying off. I told him that trying to make money off of merchandise was ridiculous and that the only way a smaller shop could compete was on service. If we built a proper service department, we might have a shot at surviving. He didn't, I moved on, and from what I've heard of people who have tried running service shops catering to businesses, its a damn rough game to be in these days. Businesses will pay for lawyers and accountants to come in and help as necessary but they seem to think that computer people should be paid the same rates as the janitorial service.
Apple's first big loss to Microsoft was thinking people would pay more for mac quality but the market said Windows wasn't great but good enough. It'll be interesting to see how it goes in the future. The iPods are ridiculously overpriced as mp3 players but those bastards sell like hotcakes. I guess the bit of genius there was equating this to fashion. People will be ruthlessly efficient when it comes to making practical purchases but when it comes to buying impractical things like handbags, shoes, and designer goods, logic and reason go out the fucking window.
Kwisatz Haderach
Sell the spice to CHOAM
This Mahdi took Shaddam's Throne
Having seen plenty of these (Sharper Image and Mervyns come to mind), those liquidations are usually disappointing. First phase: everything is 10-20% off, no better than the rotation of items on sale.
Next, you start seeing the goobers on street corners with "Circuit City Going out of Business - everything 20-40% off" signs. You go in there and anything interesting is 20% off. You buy something for 20%, no returns allowed. You end up hating the item or seeing it on sale at Target for less next week.
Now, the signs say 40-60% off. You go in and it's picked through and open box shit. You go home.
Finally, the 80% off signal. You go in to buy something, anything. The fluorescent lights, their enclosures, and a few display cases are on sale.
If we are going to discuss this in detail, though, I would specify how you define service:
I don't care about salespeople *at all*, in fact, I would generally just like for them to leave me alone unless I ask is something is in stock, etc. I generally know what I want or can read the back of the package (or often just find the partnumber and read reviews online right there on my cellphone.) I don't expect some teenager to know nuances about RAID setup, PATA vs SATA notebook drives, or what webcam is compatible with linux, etc. After junior high I stopped asking pretty much any non-engineer/programmer/somebody-that-actually-made-the-device anything about computers, as I'm sure many of you did.
What I do care about is being friendly and helpful with logistics (delivery of the flat-screen TV) or returns / exchanges for defective parts. A few online companies are absolutely fantastic with this (Amazon, etc.), so I almost end up with everything online unless I need it immediately. FWIW, despite their adherence to retail (and rarely ABOVE-retail prices), Best Buy has always been pretty good in terms of my definition of service for me.
Slashdotter, ID #101. UIDs are in binary, right?
We had one of the first wave of store closings here back in December. The "going out of business" "20-50% off", etc prices were still higher than the BB across the street. I even visited the store on the very last day where even the fixtures were on sale and everything was STILL over priced, even the fixtures. ...and why would I buy a $2k+ TV, laptop, etc from a store that wouldn't even be there the next day?
Do yourself a favor and avoid the temptation to join the crowds of bargain hunters who think they are getting a good deal just because the tag says "30% off". What ever you're looking for will still be cheaper online or at Best Buy, Office Max, Fry's...
Circuit City...overpriced and useless to the very end.
My wife and I had almost the same experience. Our fridge died. We went to Best Buy, Home Depot, Lowes.. Everybody said that it would take four of five days to get one delivered. We decided to check out a local place. They had a great fridge for a great price. Then came the delivery, the answer was how about tomorrow?
Ugh. I hate it when people answer a question with a question. Bastards.
The small guys got the business. In this economy that is huge. Survival through blood, sweat, and tears is rarely "an inspiring tale", except when it is told by the survivors to their thriving descendants.
Radioshack and (if you're on the West coast) Frys still sell niche components
I haven't seen a niche component in stock at a Radioshack in years. Unless you consider a Sprint phone to be a Niche component, anyways.
As far as I have seen, the days of going to Radioshack for circuit boards and resistors for home hobby projects are long gone.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
Weight in this case has nothing to do with it, newegg will be charged by UPS or fedex for the dimensions of the box for a single fan, the fans are too light.
The shipping costs are also for UPS 3-day, which is not ground, and is a more expensive service. It should also be noted that your shipping cost per unit went DOWN when you ordered more than one item.
The fact that newegg can, and does, discount your shipping and handling fee on a bulk purchase does not mean they're ripping you off, or overcharging you when you've only purchased one. There are a variety of overheads involved that need to be covered, and newegg (like every company that does mail-order) tries to balance those costs over both the heavy and light items...this is not unfair, or even unusual, it's how the system works.
If you want to complain about price gouging, complain about the retail prices of cables in the world.
There is nothing abusive about a handling fee, you're not just paying some "minimum wage person" to throw one in a box, you're paying someone to verify the order, multiple someones to get the item from the warehouse, someone to prepare the item, which is the box/prills/packaging etc... there's a number of things to be covered here, not to mention cost of prills, box, tape, and labels. Also, the assumption that someone doing jobs like this deserves to be making only minimum wage is extremely foolish, insulting, and naive.
Shipping costs at newegg are calculated PER individual unit, and the price GOES DOWN with bulk purchasing. Which is why the shipping cost doesn't stay at $3.99 per unit when you order 4 of them.
You've already covered my warehouse manager and workers overhead for going and retrieving the items, and verifying the order for the most part with the purchase of the first item. Having them grab a second, third, or 10th one while they're already there doesn't cost me as much as the initial send, therefore the handling fee per unit goes down.
Shipping does the same thing, you are charged based on the general distance the item needs to be shipped, and the cost per pound goes down as the items weight grows...until you cross one or two particular thresholds.
Newegg is attempting to reward you by passing savings on to you for your bulk purchase, not ripping you off jackass.
When you work in a shipping dept. (as I have) you'll find firstly that Newegg does nothing different from anyone else regarding their shipping, with the exception of offering it *cheaper* than petty much anyone else on the market, and there's nothing unreasonable or manipulative about the process.
You will always find what appear to be outrageous shipping and handling fees on extremely small items unless they are shipped via the post office (and even then most of the time it's not any better), this is the nature of shipping companies and what resellers have adapted themselves to. There is nothing unusual about this practice, and you're going to have a difficult time finding any online company that does things differently.