There's trouble at Circuit City

Circuit city is such an easy retailer to turn around. I'm really surprised that they haven't done it. They probably got a CEO that doesn't come from sales, nor does he seem to understand where CC's past success came from.


In the past Circuit City was successful by their pay model. Employee's where mainly paid on commissions or a minimum wage salary. The way to higher pay was simple, direct, and effective. You sold more, you got paid more. Store Employee's where a part of the marketing decision process. Helping to decide on new ad campaigns and marketing messages. Why shouldn't they be, since they were usually making between 60- and 90k a year in commissions. The reason for their higher commissions came from a greater understanding of what did or didn't sell to customers.

Today, the effect is nothing. You sell just enough to keep your manager from yelling at you. Because you really don't have anything to gain by selling more. If you manager yells at you too much and gives you too much pressure. Just quit or move to a different department. Store employee's are paid very little. Side effect of the lower pay is that you got very low quality people working for them. They have no idea how to add on products that the customer might want or need for their new purchase. They have so little knowledge of the retail process and the customer service that goes along with it. The management push for add-on products sounds like a broken pressure recording. Management is so new they don't know how to sell training with the enthusiasm that employees need.

Best Buy was at least smart in their method of attracting associates away from commissions. They didn't really turn them off. They simply supplemented it with a different model that gave nearly the same incentives for growth in their employee success. If you were consistently successful, you got more hours, higher pay raises, bigger giveaways and sent to big training events where they had big giveaways. You also got more specialized training to advance into other departments and jobs.


And, here is the worst problem of it all... management is simply going out to play golf while the company fails...

I don't care much for Curcuit City. But you are correct, they could turn this around if they did certain things, and stopped what is causing them problems. Management at Curcuit city are going to see stocks take a plunge, people who have a vested interest Ex: stocks, will sell their stocks while they can get a decent profit, then jobs will disappear. Then guess who elses job will disappear?

If Best Buy is having issues with margins, then Circuit City must be twiced cursed with reduced margins and shrinking marketshare to competitors Best Buy and Wal-mart (yeah, Wal-mart is a growing competitor in electronics retail, too).

I wish Circuit City the best, although that's about all I'm willing to offer. Why buy a dying stock, when you can cultivate many beautiful bloomers.

It's all about having someone with vision as CEO. You have to know what the customer wants, or you will fail.

The last time I walked into a Circuit City store I was immensely disappointed -- at the layout, lack of inventory, and overall atmosphere. It looked so unorganized. And I didn't see one thing I would want to buy. That's so different from how Circuit City used to be. I used to love just going into the store. Now it's depressing.

Kevin in comment #1....

Nothing is ever that easy. Back when commission was king you couldn't walk through the store without being assaulted by obnoxious sales people aggressive enough to please a used car sales manager. Don't forget, a lot of people deliberately visit car lots when they are closed.

Sorry, but that format was doomed to failure even though it probably was a temporary success. Perhaps with the right training and more emphasis on product knowledge than commission structure it might be reinvented but don't count on it.

I haven't been back much lately but when I am it seems that nobody in the store could care if I'm there or not.

Circuit City needs to find a new sweet spot that will appeal to consumers again.

This is simple just go to walmart or best buy,. tremendous difference,.. enough said

When I go to the Union Square store the escalator is usually broken either up or down. poeple just walk away.
The inventory is so sparse. Nobody seems to care and the retail pricing is way above the Virgin Store and PC Richards on either side of them Management is asleep at the switch. They have lost their way.
Its sad to see such a mighty force laid so low

Now, theres a combination we all can live with,Best Buy and Walmart, Best Buy is the better of the 2.

Circuit City destroyed itself. When it had the capacity to dominate the electronics retail world, they turned a blind eye and a deaf ear to Best Buy and focused on running a used-car business CarMax.

Since the 90's, everything they've done has been suicidal- letting their best talent go (dms, salespeople, techs, senior management). But even their suicidal strategies and tactics were poorly executed- dumping their appliances, poorly remodeling the stores and just... doing nothing right. Is the board of BBY running CC?

This company is a Titanic. Ninety-eight percent of the people who built the company in the 90's have been terminated or have jumped ship.

No chance to defeat Best Buy- the war is over. Put the fork in, this turkey is cooked!