Comments on: Circuit City: A eulogy

The consumer electronics retailer, whose roots can be traced to the opening of a television store in 1949, has finally hit the end of its days.

[Chris Grayson]

Hmm... so the remaining stores will start massive blowout liquidation sales starting tomorrow, Saturday. Wonder if either of the Manhattan stores are still open. I don't even know. Will have to look into that.

[botscop]

goodbye circuit city. you sliced your own throats when you fired your top producing sales people. it's called AN eulogy

[jture]

actually 'a eulogy' is correct, because words that begin with the "yoo" phoneme, even if they're spelled with vowels, are treated as if their first letter is "y".

[d--keller]

AN eulogy? Seriously? What is wrong with you? Does that sound right at all? Who corrects someone's grammar without having any idea what they're talking about? I know... A idi0t.

[steve5200]

Or someone named botscop.

[charcaroth]

Customer service from Beast Buy? You're kidding, right? We ARE talking about the same store that championed the 10 day return policy and whose training program seems to consist of being able to find the power button. Maybe you're too young to recall, but Circuit City used to train its sales staff on each new product that came into the store. This was in the late 80s and early 90s, when they paid their sales staff in part on commission. This made the staff actually WANT to sell instead of standing around in small groups discussing the new Kid Rock album. Granted, the recent performance of the CC staff near where I live has been lackluster, but at least they exist. Circuit City has/had a presence in many smaller markets where there just aren't any stores to put your hands on a particular piece of technology. So many tech writers seem to have a perspective only from major metropolitan markets or California. I've been to Frye's and I've ordered from online resellers. Both are located in other states, which makes it a bit difficult when my hard drive decides to die on a Friday night and I'd planned on a few hours of gaming over a weekend. There is no substitute for being able to go to your local store to see, test, and touch a piece of technology. Beast Buy seems to have a "let the peons come unto us approach" both in their store locations as well as the attitudes of the barely trained sales staff. We can stand around all day and point fingers at what caused the demise of Circuit City, because the causes are myriad, but let's not lose perspective.

[quaglax]

To the guy above me....as much as I hate Best Buy and their customer service...is it MUCH better than that of Frys. Im not gonna go into my hellish experiences I've had there cause I'll be writing an essay but needless to say...the customer service and employees that Fry's hire have to be the worst and dumbest I've EVER seen in my entire life.

[Pokerfish]

Agree with you about Frys' customer service. I definitely do not shop there to get good customer service. However, I'm a sucker for bargains, and Frys is consistently the most competitive on price, as far as brick-and-mortar electronics retailers go. Frys is good for the tech-saavy who know exactly what they want and don't need to ask the ignorant employees any questions.

[krex0725]

I still blame Circuit City's ill-fated attempt to push the DIVX (Digital Video Express) media over DVD in the late 1990s. Officially it cost them $140 million when it was finally closed down, but I have to wonder if it didn't help send CC down toward their eventual demise ten years later.

[Hairy_Bagel]

are you serious? the demise of circuit city did not start with their backing of DIVX. It failed, they moved on...to sell millions of DVDs since then. the author got it right: they failed because their management was clueless and their customer service ("where the rubber meets the road") was terrible.

man, how long have you been waiting to use THAT excuse?

[randy_sessions]

Having worked as a manager at CC from 1995-97, I completely agree that DIVX was a stepping stone on the path to their collapse. Hairy_Bagel is obviously welcome to disagree, but anyone who thinks CC's problems were only created by management in recent years doesn't know this company at all. In fact, Circuit was sowing the seeds of its demise during their rapid expansion in the mid-90s. A lot of people have forgotten what CC was like prior to the switch from commissioned to hourly wage associates in 2003. Prior to that, buying electronics at CC was exactly like dealing with a used car salesman. "Sales counselors" in cheesy blazers and huge nametags shoving a copy of the "low price guarantee" in your face as soon as you walked in, trying to upsell you the highest-margin product they could, and then hammering you for the extended warranty like their lives depended on it. They actually trained sales people not to quit pitching the warranty until they got the third "no". And the sales people HAD to berate you about the warranty, because if their warranty percentage wasn't at a certain level they would be "counseled" twice and then walked out the door. Their jobs literally depended on it. People talk about the mass firings in 2003 and 2007, but those were simply the end result of a management culture that had always viewed employees as necessary evils instead of assets. CC stayed on top during the late 90s because they had added 200-300 stores in the previous few years and were still opening stores in new markets. Anytime a big shiny new franchise opens in a town, there is going to be a honeymoon period as people flock there out of curiosity. The problems arise when customers have made a few purchases and find out exactly what they're dealing with. So even as CC remained #1, big cracks were forming. The problem was then-CEO Rick Sharp's arrogance, believing the outdated CC business model (commissioned sales staff, much smaller stores than BB, inventory kept back in the warehouse instead of on the sales floor) was bulletproof. He didn't get that customers were already starting to reject it even as the company was growing exponentially. As a manager I did see them rejecting it every day, and it got worse the longer I worked there (and the longer our store had been open). That business model ran particularly counter to the younger, tech-savvy customers who were already starting to dominate the marketplace. They knew what they wanted, and didn't need some high-pressure sales person helping them decide. They didn't want to stand at customer service waiting for their product to get sent up from the warehouse like Service Merchandise. They wanted Best Buy - a big store with a huge selection where they could walk in, grab their product, pay for it and leave. CC should have figured that out at least 5 years sooner than it did, and maybe more. Instead they spent the 90s building 300 or 400 stores that would be woefully inadequate in 2003 when they finally decided to ditch commission for the Best Buy model. Sharps's inability to read a dramatic shift in consumer preference put CC on the path that led them to this morning - of course he was long gone by the time things started imploding, and it doesn't help that the following two worthless CEO's screwed up everything they touched. As for DIVX...this was another prime example of Sharp's arrogance -- "we'll invent a competing pay-per-view technology that will kill off free DVD, and we'll own the whole thing and make a fortune". It finally hit the market about a year after I left, but it was under development while I was there. We heard a lot about it, and the only people who seemed excited were upper management. DIVX got killed on the internet from the moment it was announced - no one liked this idea, except of course for Sharp and the clowns in Richmond. And of course it tanked in less than a year, cost them $100+ million and made CC a laughingstock for persisting with what everyone practically screamed at them was a terrible idea. Had they been managed properly and paid attention to the market, they would have shifted their business model far earlier, and perhaps all that money they lost on worthless ideas like DIVX could have been spent instead building the bigger, brighter stores that were needed to successfully operate a BB-style format. Instead, they made bad decision after dumb decision and ended up where they are today. CC's problems truly go back at least a decade, and it is amazing they limped along for this many years.

[BigGuns149]

@ randy_sessions:

There are some things I disagree with you on (eg. I think eliminating commission was part of CC's downfall because CC simply became a CC simply became a BB wannabe with worse prices and less selection), but I do agree that DIVX was part of the eventual downfall of CC. While there is no question that CC could have turned their company around well in 04-05 by the time anybody started talking about turning the company around they had compounded so many mistakes as to make turning back from bankruptcy almost impossible. The Walmartization of retail and just the general trend of lower margins even at MSRP has made it critical for anybody doing retail to not sell stuff people don't want.

For example I think in the post P2P/iTunes/Netflix era I think that CC dedicate too much floor space to CD/DVDs, which even an somebody who barely follows the industry knew was a dying market. While customers don't want pushy they also don't want employees hiding from customers either. Maybe CC needed a commission system that reflected new priorities, but paying flat salaries almost never results in employees putting much effort into their work unless you pay them so much that they would have trouble finding a similar paying job.

I remember walking into a CC and asking about Penryn based processors almost 6 months after they came out and nobody knew what I was talking about. Standalone BD-ROM drives were nowhere to be seen. Unless you can afford to have the best instore prices you better offer really high quality service because cloning another store's model only works well if you either one up them in some respect (CC certainly wasn't one upping BB in price or service) or if you don't overlap much geographically (most CC stores were <5 miles from BB stores). Either one has to be a niche retailer (eg. Microcenter, Pacific Sales, etc.) that focuses on a couple of things and attempts to do it really well or you have to go the route of Fry's and attempt to one up BB in selection to the point that you are so all encompassing that unless it is a common item you don't bother to go to BB because you know Fry's has a better chance of carrying it.

[TotallyMadeUpName]

Customer perception is critical to the success of any business. Circuit City's attempt to introduce a pay-per-view DVD with DIVX really soured me on the company. Their practice introduced in the '90s of selling selling CDs below cost to lure customers into the stores, which damaged independent music stores, only contributed to my dislike of the chain. The final straw was laying off 3,400 experienced sales staff because $10.40 an hour was too much to pay when replacements could be hire much cheaper.

[epross]

Wonder what is going to happen to "The Source: by Circuit City" - the former Radio Shacks in Canada? I bet they are doomed too. Too bad the people on the sales floor have to pay the price for poor management in the corner offices and its failure to adapt to changing market conditions. The North American economy just doesn't need to keep taking these hits. Plus one less competitor means much less competition. Are higher prices coming to a store near you...? Let's hope not.

[thejokker]

Are you also shutting down your operations in Canada?

* No, our Canadian operations will continue. They are not affected by the liquidation of Circuit City's U.S. operations. The Canadian operations employ approximately 3,000 associates.

http://www.circuitcity.com/closed.html

[pcwilliams]

It's funny how people seem to know everything when they post comments on these articles. Comments stating CC had bad or good service are not totally accurate. I have been to some CC's where the service was bad & to others where the service was good. It's gossip & rumors like this that make companies seem worse or better than they actually are.

[ps_martin]

"it's called AN eulogy"

If you are going to try to be snarky, at least be correct. It is "a eulogy".

Let's go back to English 101:
http://owl.english.purdue.edu/handouts/esl/esliart.html

[epross]

I agree:

"An" goes before all words that begin with vowels:

* an apricot
* an egg
* an Indian
* an orbit
* an uprising

with two exceptions: When u makes the same sound as the y in you, or o makes the same sound as w in won, then a is used.

* a union
* a united front
* a unicorn
* a used napkin
* a U.S. ship
* a one-legged man

Eulogy is pronounced [yoo-luh-jee] so the "a" rule is correct.

Did Don correct the article title after the comment was posted?
Journalists have deplorable spelling and grammar these days. Depending too much on spell checker I'd say.

[rafe]

Our copyeditors say we go with the rule (from the site linked above) that says, "The choice of article is actually based upon the phonetic (sound) quality of the first letter in a word, not on the orthographic (written) representation of the letter. "

Thus, "A eulogy," or the counter-example, "An honor."

[J-Hawaii]

The proceeding article ("an" vs. 'a') is dependent on the next phoneme, not the next letter. Amen, my brothers.

[G5isAlive]

You're kidding me right? Not about the demise, but trying to suggest customer service is better at Best Buy? Just not true. And this author overlooks that competition, any competition, is good. Watch for rising prices at Best Buy. I myself liked having the choice... and buy/bought from both.

[BenHouck]

@Chris The CC on 80th & B'way was still open as of the beginning of this month.

[CinnyMan]

Peace out you crappy Electronics store. The only place I know of that I can walk in and spend 2x the price for a pair of cheap 10 dollar pair headphones... they burned them selves to the ground

[bbradley3334]

Customer Service, Customer Service, Customer Service
I hope other companies not just Best Buy take note

[BigGuns149]

It was a major factor no doubt, but selection and prices weren't great either. There are a lot of stores (eg. Walmart) where customer service is weak, but stay in business thanks to decent selection in most departments and generally decent to good prices.

As someone said in another forum CC had neither good prices nor good customer service so it is no shock they bit the dust. I will agree that BB didn't have terribly great service either, but at least they had better ad items than CC. CC for the most part didn't know how to advertise anything without a rebate(ie. actual price cuts). I think a lot of people tolerated BB's poor service because while it wasn't much better than CC at least they had decent prices from time to time. You can't ignore other competition either.

I worked for Fry's for a while and I know somebody walked in asked for a someway to hook up two computers to one printer and I bent my knees and picked up a Siig 2 to 1 USB switch and showed him that it included all the cables and how the buttons on the front worked. He remarked that CC claimed such a device didn't exist! BB wasn't the only store stealing CC's customers one by one.

[Throgged]

martin just FACED poster #B

[TheForestFloor]

How many times did he need to write 'the end is near' in this article?

[raitchison]

Not surprising but indeed sad to see it go.

Best Buy on the other hand is no doubt jubilant, they now have _no_ direct competition. They be able to raise their prices while continuing to suck at least as much as they do now.

[nukepicnic]

au contrair! to me Best Buy is JUST the showroom to physically see Amazon's stock... and that certainly doesn't mean I'm going to ask any of the morons in my local store any relevant questions about any of the products they sell. I've tried that and I don't need the slack-jawed mouth breathing anymore. I can find all the info I need with Google and by looking at the display model.

[tigrzeye]

For electronics that do not need visual verification for purchase I must admit I buy off the internet where it's cheapest. But when I needed .. er excuse me WANTED... a new HDTV no where on the internet could I hook up a Blu-ray player with my test movie in it to the 2 or 3 TV's I was considering. I could at Circuit City. No matter how many reviews you read it still comes down your visual likes and dislikes on video equipment.

II knew the Manager and several sales people on a first name basis and they were helpful to the max. My neighbor worked for CCity. He bought a house locally. Bought his cars locally. I wanted to buy from them as they helped to support the local economy. Internet purchase dollars go who knows where. Maybe why we are were we are economically.

I don't understand the comments that Circuit City was overpriced. If what they were selling was less at a competing brick and mortar store, it was called a price match. Same as with Sears, Best Buy, Wal-mart, and others do.

No way could a brick and mortar store compete with an internet only store. (There are things that employees all expect to receive like a pay check, vacation pay, sick pay, and health benefits.) But on the flip side you could walk in get what you wanted and if it was a problem or not what you expected you could take it back too. No having to contact, get an RA#, pay for shipping (sometimes both ways), etc.

I will miss Circuit City, not because they did everything right. But because they were a face and a place in today's market. Not an invisible sit on your butt and push a key to order from who knows who service.

[fjellt]

As a former "O'riginal" Geek Squad Special Agent, and then a BestBuy Geek Squad Agent, Best Buy is in fear of Wal-Mart in electronics, which I always found was lacking in QUALITY electronics and SERVICE!!!

As long as BestBuy doesn't do something stupid like removing higher-paid hourly employees (I know of a few in MN that have been), they should be set. One thing that I think that has added to Circuit City's downfall is BestBuy starting to carry higher-end electronics in their Magnolia Home Theater sections of their stores. In Minnesota, if you wanted consumer electronics, but higher end, you went to Circuit City or Ultimate Electronics since the stores carried the nicer things.

Wal-mart sells lower-end (lower-quality) than other retailers, BestBuy was always set to sell the largest ammount of the middle of the road electronics, which most people wanted. Circuit City sold to higher-end consumers.

[kineticarl]

newegg's still around, right? carry on....

[aztec92154]

Never thought I would do this but... Newegg FTW!

[ameetns1979]

I have shopped at circuit city recently. Some of their stores really improved a lot in terms of customer service during the holidays, with sales associates being very helpful. But with the holidays, the additional associates recruited were gone, leaving the customer to find their own way through the stores.

It's nothing different in best buy. You have a question and you have to wander around the store to find someone to answer your questions. I guess if Best Buy and such don't learn the importance of customer service from this sad end of circuit city, they never will.

[dbur1000]

I am mostly sad to see circuit city go because it will make best buy get even more out of line with there shotty service and over pricing. It wasn't that circuit city was much better, although my local stores have improved recently.

I hope we see a new nationwide electronic retail chain grow up as we come out of this recession.

[bwh1248]

The one thing I always liked about Circuit City was their website. They and Amazon were some of the first to have good user review and comment sections and give you the ability to buy and pick-up at the store minutes later. Although they now have some of the same features, Best Buy still hasn't match Circuit City's website from 2004. Other then that, and the somewhat reduced price competition for BB, I can't say I'll miss them.

[BigGuns149]

I gotta agree with you that CC had a better website albeit I don't think that BB's website is as bad as it used to be. Had CC had better selection and prices they would still be around today for sure. A lot of the changes to stave off bankruptcy that they made in the last year were too little, too late. CC like CompUSA before didn't realize that the market was changing and the old model that they were relying upon didn't work.

[1eye1]

If only they could have sold a few more HDMI Cables....They would have been okay.

[BigGuns149]

Somehow I think it was more than not attaching enough $100 HDMI cables to their TV sales. When they were hundreds of millions of dollars in the red in one quarter alone you are talking about *millions* of extra HDMI cable sales. Furthermore, even the expensive brand names like Belkin aren't quite as lucrative to resellers as they used to be because I see quite a few resellers even brick and mortar stores are reselling Belkin Pure AV HDMI cables for <$50. Heck, I have seen they for as little as $20. It is pretty hard to sell them for $100 when I can buy the exact same cable for $30-40 down the street. CC was simply buying too much stuff that sat around too long. Except for accessories you can't afford to have stuff sticking around much longer than a month because the price may drop to less than what you paid for it in which case you are either not drawing enough customers or you are buying too much of that item.

[TotallyMadeUpName]

All of the big-box stores I know of sell their cables for extremely jacked up prices. I buy ALL of my cables online, where they are typically 1/4 or less of the price at local retailers.

I'm glad CC is gone. The company got what it deserved. It reminds me of the demise of Comp-USA, another company that really needed to go out of business.