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The Last Will and Testament of Circuit City
Harry writes "Sunday is the final day of business for Circuit City, the once-dominant national consumer electronics chain done in by the rise of Best Buy, the crummy economy, and multiple failings of its own. I paid a final visit of respect to my local store, and found that they'd gotten rid of just about all the unopened electronics products, and were therefore selling off stuff like broken computers and the toilet-paper dispenser from the restroom. Whether or not you were ever a fan, it was a sad scene." NPR has a segment on the end of the Circuit City era as well.
"Whether or not you were ever a fan, it was a sad scene"
Newbie.
Circuit City cut their own throat in a series of dreadful missteps(culminating in their brilliant "Hey, let's sack all the halfway competent salespeople and attempt to hire them back at downright insulting newb wages" scheme), their demise is well deserved. Even in death, their prices are high and their service lousy. Why is their death sad?
I remember in the early nineties when the Circuit City car audio installation department employed all those otherwise out of work recent EE grads. Good times.
Where do EE majors work now? The wife is looking for work.
Years ago, when I first moved to California, I had never seen a Circuit City, only Best Buys (and was suitably appalled by BB and business practices, they tried a bait and switch on me once).
I found the Circuit Citys I saw to be clean, maintained, decent prices, friendly employees. But then, a few years ago, I noticed a reversal taking place - the CCs near me had become, for lack of a better word, 'ghetto' - unfriendly employees, broken equipment on display, and lack of product - while the Best Buys had cleaned up and trained their employees. I switched back to BB, occasionally walking into CCs, and finding them just getting worse and worse.
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and were therefore selling off stuff like broken computers and the toilet-paper dispenser from the restroom
At the checkout:
"You know, I've got a couple of these toilet paper dispensers, and they always seem to jam at the most inopportune times. Could I interest you in purchasing our exclusive 5-year extended warranty protection plan for only $179 more? It would really give you more peace of mind in the bathroom."
I quickly had written it off my list of places to go when it was in business and hadn't been there in years. When they were shutting down, I figured I'd go and check to see what kind of deals were available. Answer? None that I could find. Most things were no better than retail, I could go to Best Buy and get the same price. Oh sure they were "marked down"... but they'd been marked up first. There were a few things I saw that were lower than you might see in most brick and mortar stores, but not by much and not any lower than you'd find online.
I never understood why they thought that their high prices were sustainable. I mean I understand that retail stores charge more than online. No problem, you are paying for the convenience. However they charged more than other retail stores. Well guess what? I can drive to Best Buy just as easy.
Also you can justify higher prices with better service/experience. Some high end AV shops are like that. The prices are high, even when you consider the gear they sell (which is already very high priced) but the service is top notch. You can spend hours milling around, trying out things. They have knowledgeable people who will answer your questions and such. Thus you are willing to pay more.
Well CC didn't have that, at least not the ones I'd tried. Their sales people didn't know shit and were rather pushy.
Ok so if you aren't going for the service, and aren't going for the price, why go? Well the answer to that question for me and apparently many others was "you don't." Thus they are out of business.
I feel bad for their employees as this is not a good time to be looking for a job at all, and probably doubly bad looking for a retail job, but I do not feel bad for Circuit City. They were a crap business, and that's the whole idea in a capitalist market: You run a crap business, you fail and are replaced by someone better. Best Buy is by no means perfect, but they are better than CC.
"I am writing this message in representation of the employees of Circuit City here in Richmond who are having to deal with inexcusable conditions being brought on by customers with retribution. Walk into any Circuit City store on any given day and you will find a handful of employees and a sea of customers. The fact that people have flocked to our stores en masse on a daily basis, creating Black-Friday style crowds, has been insulting to our employees and our business alike.
Where was this support when we needed it? Liquidation, for us, has brought great havoc on a series of levels. I've been working for the company for almost two years, and I have never seen anything worse than I have seen over the past month. Customers have gotten enraged over the fact that our discounts aren't good enough for them."
While I only shopped there if I wanted something *now*, I did go in once the closures were announced and you could see people loading up on stuff just because it was some % off. I never saw anything that I couldn't get a similar deal online at the time (and also came with warranty) so I couldn't understand the why people descended on the store en masse. The only explanation I can think of is a feeding frenzy brought on by greed. So from that perspective I can understand where the letters author was coming from
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It was a sad day when Enron closed its doors after making horrible management decisions that cost their employees, customers, and the general public billions. But curiously enough, nobody ever blames management. "The market is bad." Yes, the big bad evil market -- tell me, even in a recession or depression, does the market for electronics suddenly disappear? No. It might shrink, but a business that's properly built will shrink with it, not simply die off. A corporate mass-extinction like this has only one cause: Bad management. Period.
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Actually that sort of thing is handled by the liquidation company and in no way is set by the former Circuit City management.
Basically, as in all liquidation sales, they put everything up to MSRP, then take 10%(or whatever the starting discount is) off. Chances are you'd have gotten a better deal the week before liquidation began.
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1) customers do not owe businesses "support", If a business treats their customers with courtesy, good service, and respect for their intelligence they will earn customer loyalty even in bad times.
2) Customers tend to get outraged when they hear about 40% off sales and then go in and see that the 40% off item was marked higher than it had been the week before the sale started. Its not a matter of "didnt get the discount they wanted" its a matter of being suckered into a store and having their time wasted.
3) Their customers didnt kill their store, their bosses did. They shouldnt blame their customers for simply looking for an honest bargain.
Having an extensive memory like I do and also having lived in Richmond many years ago and then most recently; I feel I have a pretty damn good over view of the whole fiasco. The problem was with management. The problem was with management every single step of the way.
When I was a teenager, Circuit City was THE place to buy anything electronic. Why? The salespeople worked on commission so it was in their best interests to know what they were talking about. You could stand and talk with them for however long it took and the lions' share of them knew what they were talking about in every aspect of what you were considering buying. The service was so good that people used to refer other people to the salesman that had helped them by name.
I can remember CC winning design awards for stereo eq that came out on occassion as well as many other things. At the same time, their return policy was bar none, the best you could get anywhere. So what happened?
First, management decided they wanted a larger chunk of their employees pay. To that end, they cut all the salespeople and offered them entry level wages on a per hour basis. Almost immediately, the good sales people left. They moved on to greener pastures. Instead of walking in and talking to someone who knew what they were talking about, you got a teenager who was more concerned with who he or she was going out with on Friday night. Not that there is anything wrong with teenagers, I used to be one too. But, a teenager making minimum wage is never going to be able to compete with someone who lives and breathes whatever the product is that they are selling.
Next came the elimination of the large appliances. Who is honestly going to buy a washer and dryer from a 16 year old kid? You see, when people realized it was kids in there, the high dollar purchases ended. It ceased being THE store and became a store...like so many others. As many of the commissioned sales people left, many of the management also left. What they were left with was a company with salespeople who did not understand what they were selling along with a management team whose understanding of technology was "It's the next big thing!"
In a mad dash to recoup the losses generated by idiot management, they turned to many deals that were ill advised at best. The most glaring of these was the DIVX support. They tied almost all of their fortune to Toshiba and in turn provided the buffer zone financially if the whole thing fell apart. As we all know...Americans like to own their media (we can argue about that later).
When DIVX collapsed as everyone who knew anything about formats knew it was going to, CC took the brunt of it. Then as we all know, the dot com boom blew out and that was it. One of my favorite incidences that occurred was about 10 years or so ago, you found out you had been laid off on Monday mornings by a sign on your desk. If your stuff was in a box and there was Kleenex next to it on your desk and a security guard in your department wandering around, you were laid off. You can only do that so many times to employees in your headquarter town before you hit a point where noll amount of advertising is going to save your company from bad press.
But, time had moved on and Best Buy had shown up on the sidleines and was edging their way in. BB opened stores that were clean and bright and made their fortune off of friendly helpful people who knew what they were doing. As CC began to circle the drain, more stores closed, more layoffs took place, items got cheaper and their price went up. Where at one time in CC you could walk in and buy just about anything for a great price and have your neighbors over and have them oohh and ahh for the next three days; now, it was a shady looking place where you kind of expected someone to offer you 'grey market' items in a dark corner.
They never dropped their prices after they stopped paying their commissioned salespeople. In many ways, CC was THE MOST EXPENSIVE place to buy something. Yes, you
Circuit City is text book example of what attempting to become very rich very quickly almost always results in. It is a perfect analog of the national and world economy. The blue print for demise Circuit City followed:
Action: Remove staff with knowledge and ability and start paying less to less capable people.
Reason: Keep immediate profits high.
Outcome: Reduced sales due to less customer service.
Action: Leave prices high.
Reason: Keep immediate profits high.
Outcome: Failing to see that the consumer electronics market is shifting to a Walmart model (aggressive pricing, low profit, high volume) sales go down.
Action: Eliminate deep discounts on open box, out of production, or discontinued merchandise.
Reason: Keep immediate profits high.
Outcome: Reduced repeat and casual traffic resulting in reduced sales.
This is what happens when any business runs itself based on the principle of "Keep immediate profits high" rather than "Keep customers coming back".
Gordon Gecko was wrong - greed is bad.
Yeah, I went in there yesterday for the sale. Got a pretty sweet deal on a Divx player. Anyone know how long the "waiting for server" screen takes?
The Kool-Aid man showed up at my house with a couple of guys wearing suits last week. Was he curious about my new habit of purchasing competing products? OH YEAH!!!
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