Why Circuit City was electrocuted

As one of the 3,400 who was let go in march of last year, I can't be happier to see the company in shambles today. Schoonover is an idiot, was from day one, and I had long knew that his assanine decision would come back to haunt him. I just hope they dont give that a$$h0le a job at some other company, sending them into another tragic downward spiral. Rot in hell, Phil, rot in hell.

Yes, and Schoonover should never be hired by any other company. Any idiot nows that you never get rid of your top producing people. If you notice, I said top producing people not people like Schoonover.

I knew 3 people,let go,and they predicted thew 3400 firings,would collapse Circuit City,they were Correct.

I totally disagree with the analysis of the writer of this article. I agree that cutting jobs as he did was not good, but in all reality, the internet sales and shopping channels are getting the lions share of sales now. People are not going out to look at merchandise in any stores to speak of if it is available online. Yep ! That is what is happening in all the retail sectors. That is why all are crying in most malls and strip malls and all over for that matter. Circuit city would be better off to have ten strategically placed warehouses of their merchandise and end all retail store front sales. They could then rent locations less than 1/10th the size and just be there for service. That is the reality today. Receive orders and ship from the warehouse. That is where America is today as they have changed their way of shopping. Service providers are the only ones who will survive now.

I feel sorry for the people losing their jobs, but I had a bad experience with Circuit City when I tried to return a video camera that cost 850, restocking charge was 115, they didn't care that I wanted to exchange it for a digital camera. I contacted them and was told that was their policy, I told them my policy was to inform everyone I knew, never to frequent thier stores. It took three years, but I can see that stupid policies came from the top, which put them at the bottom. I'm sure Best Buy is hiring.

Bait and Switch is not the way to run any business. Good Riddance!

In today's economy it is all about service. The service I received at Circuit City was so bad that I went back a second and third time feeling that no store could be that bad. Suffice it to say they were that bad and worse and I have not returned nor will I.

Remember when Circuit City was a favorite in "Good to Great" by Jim Collins. Remember when we thought being big gave you clout with customers and vendors to produce long-term returns (Michael Porter's 5 Forces Model). It's time we recognize that the old approach to management doesn't work in a rapidly shifting competitive world. There are winners in today's market, but they follow a different approach. Read more at http://www.ThePhoenixPrinciple.com

For Christmas in 2007, we bought computers offer by Circuit City. The saleperson told me if I bought two, I would get the discount on both.
The Company stated they only give discounts on one. I was out $250 which was the only reason I bought the computers. Why would I buy two computers in my household if I knew I couldn't get the rebate. I keep email them and they sorry - no can do.
I have learned my lesson well. Mismanagement and poor customer service. I still want my money Circuit City.

Let's not lose sight of the fact that Circuit City has been getting hammered for years. Best Buy offers better pricing, selection and service in a physical store and Internet stores offer infinite selection and better prices. This is just another example of a bad company that can't survive a downturn.

jmanley
http://saleboutique.com

The problems at CC started before Schoonover...Remember McCullough? He put the first nail in the coffin when he decided to drop "Major Appliances." He said they needed the room for coming of the digital revolution. Then they filled the space with tons of CD's and DVD's. Meanwhile the smart retailers knew that families came to their stores when they needed to get a new washer, dryer, fridge,etc. and while they were there and since they now had an account with them those customers will continue to buy from them. What a shame.

MikeB, you nailed it on the head. My husband was a store manager of the Roadshop side of the store (car audio) from 97-01. He predicted when they dumped applicances it was the beginning of the end for Circuit. Reorganization of the stores, combinging both store & car audio under one store, getting rid of commission sales all led to the poor service. Sales people were no longer driven to make a sale or educate themselves in their product. Such a shame...

Your comment:

"The people he fired happened to be the ones who knew what they were talking about when it came to electronics and those sales people went to work for the competition, taking their customers with them."

I think misses the mark, completely. What killed off Circuit City was the changing nature of consumer electronics.

The electronics sector is changing. He had to fire the highest paid people just to stay alive. Why should I go to Circuit City or any other "big box" store and talk to a "salesman" about an electronics purchase, when I can go to Wal-Mart, Sam's Club, Price Club, or the like and just put these things in my cart and check out? Or buy them on the Internet for cheap?

A 42" flat-screen teevee is now $600 to $800. This is not a 'big ticket' purchase that requires financing, extended warranty, or a "salesman" to "help you choose the right one!"

Circuit City made money by marking up electronics and selling add-ons like financing and extended warrantees. When prices fall, these add-ons are no longer necessary.

Car Stereo is another area where the game has changed. Most cars come standard with 8 or 12 speaker stereos, so who needs an aftermarket one? And am I going to let the teenagers at Circuit City cut into the wiring harness of my BMW to install one? I think not. That whole market has shrunk.

Consumer electronics are now CHEAP and DISPOSABLE. Digital processing means that consumer-grade electronics are now on a near-par with what used to be considered "audiophile" electronics.

As for appliances, the big-box lumberterias have this nailed down. Circuit City could not go head-to-head with Lowes or Home Depot, which don't have to pay sales commissions.

The Circuit City model was completely wrong for this market. Electronics are a commodity now - like a bushel of beans. You sell them for as cheaply as possible and in mass quantities. The idea of going to a dimly lit store and spending hours selecting components with a salesperson is outmoded.

Maybe in 1975, we'd go into the "high end" stereo room (with sliding glass doors, natch) in hush awe at the "audiophile" speakers and receivers. But no more.

In addition, an aging population doesn't really care about those sort of things anymore. Heck, half of them are deaf from Rolling Stones concerts.

Yes, the sales people were fired. They probably took jobs at lower pay with other stores. But did customers "follow" them? Do I remember the name of the sales person I last bought a piece of electronics from? I think it was the Internet....

The so-called "downturn" in Retailing is not a momentary pause, but a permanent change in how we do business. When I want to puchase anything these days, I first check the Internet for pricing, and then locally for availability. Much of what I need can be ordered online for less than in a local store. So why would any rational person buy at a store?

The idea that the store provides "service" is ludacrist. Electronics, when they fail, as disposed of. Product returns on the Internet are as easy as at a store. So there is no advantage to buying at a store - and you pay more.

Traditional Brick & Mortar Retail is DEAD, and companies will have to remake themselves to compete.

The last thing I bought at Circuit City was an iPod, and that was after ordering it online and picking it up at the store. Before that, the last thing I bought at Circuit City was a $99 TeeVee in 1987. The experience was so unpleasant, I never went back (bait & switch, pressure to sell extended warranties, etc. BTW, the TeeVee still works, no extended warranty needed. But it is analog, so in the trash it goes. Electronics are DISPOSABLE, folks!).

Circuit City is just the start. Other consumer electronics retailers will feel the heat next. Best Buy is another unpleasant, overpriced buying experience that no one really needs. Maybe the selection is greater, but do I really need to choose from 50 different TeeVees? Just offer six or so, and lower the prices.

My next purchase will probably be a flat-panel TV. But I'll probably buy it online or at a discount store (Wal-Mart), rather than a dedicated consumer electronics store.

Why spend tons of money on a "high-end" screen, when they are basically a disposable commodity? It would be like paying extra for a "gourmet" Big Mac.

FWIW.