Monday, November 10, 2008

Do you miss Circuit City?

So, Circuit City is toast. And the public doesn't seem to care. I typed in Circuit City in and most comments are negative, reminding others of the layoffs of 3,400 'overpaid employees' (just followed by the golden parachute of its outgoing CFO), asking for the future of their extended warranties and overall complaining about Circuit City as a brand with sub-standard service:

"No one ever waited on me when I went to Circuit City. I'd just walk around and leave."
"Why are they even still around? I have a pretty long list of useless retail stores. They're on it."
"The sales people seemed to eager."
"Dear Circuit City, I never loved you. You never made me happy. Now I'm leaving you by the side of the road (at a strip mall)."

Just like many other electronic retailers, Circuit City was a company that never considered service as part of their core offerings. The advent of the Internet made these stores almost obsolete, maybe with the exception of big ticket items like flat screens and dishwashers. Laying off the majority of their overpaid (meaning: most qualified) employees dramatically increased this severe lack of professional service and focused the company on car dealer like sales techniques.

When you reduce your competitive advantage to 5% off and other direct sales approaches, you reduce your business to a flea market. A flea market filled with deals and no-name vendors that have no storefronts, no fancy advertising, just Google on their side.

I feel bad for all the employees and vendors owed money by Circuit City (HP and Samsung are owed more than $100 million each.) The layoff of 3,400 seasoned employees should have given you an indication of things to come. Cutting to the bone might have been a good thing in the 80's when companies had huge bureaucracies. We've been living in lean times for a while and cutting the juiciest parts out is a sure sign of a company in distress and close to failure.


Ray said...

My advice to those Circuit City peeps that lost their jobs, hit the jobs boards fast while there are still jobs posted - (professional networking) (aggregated listings) (matches jobs based on your skills)

Good look to those looking for work!

deepi said...

Well, I personally kinda miss Circuit City. They weren't too bad.. Also, they're the second largest electronics retailer after Best Buy (which I like better, but whatever). With Circuit City down, the competition's been greatly reduced for Best Buy, and that's definitely a negative in my opinion.

I wish the best of luck to those that lost their jobs.

Charles said...

I was on the opening team for Circuit City store 800 on Wrighstboro Road over 22 years ago. I have been wandering through the store almost every day for the past couple of weeks, looking for product and fixtures for my own retail business and talking with the employees of store 800. As I walked through the offices and looked at probably the same desks I sat at 20 years ago, I realized that the cash office was still called the cash office, that the PSB (Product Summary Book) was still called the PSB and still contained the “A” and “B” price. The jackets, ties and sales binders are gone, but the culture has not changed at all and to the testament of the hard working associates and management team, it will last to the very end.
For 60 years Circuit City was our consumer electronics store of choice. I am sick and tired of hearing people complain about “lousy bargains” and “rumpled salespeople”. These employees are honest hardworking Americans in one of the hardest, most stressful professions of all-a consumer electronics retail environment. 34,000 of them are about to be out of a job. I think most of them will be snaped up, even in this tragic economy, because Circuit City training was the best in the world. I was a sales associate, I was a sales manager, I was on the training team, I spent time in Richmond VA at the home store and I can tell you that as far as retail goes, Circuit City was an icon of customer service.
Circuit City was undone by the very thing it sold-technology. In actuallity, it was a combination of the internet and anxious customers who prized price over service and a hat trick by Best Buy that weakened the Circuit. A terrible economy has unplugged it forever.
If you want service now, you are most likely out of luck. When I was a sales manager, we were told to do whatever it took to make the customer happy and we did. Our associates made good money and our customers were happy. Our buyers were very smart and our product traning was astoundingly good especially considering the wide range of products we stocked.
All of the experiences of my life have helped me to be successful in my own business, but none of those experiences comes even close in value as the three years I spent with Circuit City. Without my training at Circuit City, I could not have possibly survived 14 years in the retail computer business. Since we opened in 1995, every single one of the competitors in this market have gone away. Not one is left that was open when we opened-except Circuit City and in three days it too will be gone. I wish it were not so.
As we charted our metrics dashboard today with Steve Fortunato our advisor from GA Tech the numbers looked good. As we planned our next strategic meeting to talk about inventory levels, I realized that the suggested inventory levels (3 weeks of average sales) was a Circuit City standard number. As I think on it, many, many of my decisions as President of my own small company are guided by my training at Circuit City, from HR issues to inventory, to sales strategy and competitive tenaciousness. But the overarching message pounded into me an every Circuit City Employee since probably the very beginning was to make the customer happy at almost any cost and to know your product like no one else.
I was taught by Circuit to “ctc” (cruh the competition) by actually shopping other stores and writing down the prices and promotions… it was part of my job. As owner of my own business, I was not quite as aggressive, but always remembed to keep an eye on my competition. If anyone did pick a fight like the time the mighty “Computer Renaisance” marketing director walked into my store and threw his sales flyer on my counter announcing he was going to put me out of business, I usually just ignored them.
I learned not to disparage anyone, anywhere, anytime, not the competition, not an inferior product, not a person or thing. I was taught to fight fair and present facts as facts and opinions as opinions. I was taught to know my product inside and out, to treat people like people and employees like family.
I worked with great people like Mike Trotter, Mark Atchison, Jeff D, and the legendary Bill McKinley, who also owns his own retail store, Wireless Solutions in the Augusta Market. I considere myself proud to have beaten him just once in sheer retail monthly sales volume. Ask Bill McKinley what he learned at Circuit City and he will tell you the same thing I will. We learned a lot of very important things about how to technically execute an efficient retail business, but most importantly we were encouraged do the right thing for your customer, be honest, earn their trust and work very, very hard.
I wish I had some employment openings in my retail stores now, because these employees at store 800 in Augusta,Ga represent the best in the business. They were carefully screened, re-screened, interviewed and re-inteviewed, then trained and re-trained by an organization that has a culture of customer service and incredible hard work. Well done employees that make up store 800. Well done to all of the Circuit City employees, past and present. Well done.

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