Posts tagged Circuit City

In January Circuit City went bankrupt. The once proud retailer is a prime example of what happens when a company is managed poorly. During the Summer of 2002 I left Home Depot to pursue a job at Circuit City. After over a year at the Home Depot I liked the fact that Circuit City offered a commission sales structure and that was a far more attractive option at the time. Plus, the location of the store was close to where I went to school.
At Home Depot one of my favorite customers was a gentleman who was from Australia. He was a former rugby player and I aways had a great time talking to him. When I told him I was going to Circuit City he told me that he’d see me around, but never at Circuit City. When I asked him why he said it was because their commercials made men look like idiots. I never saw this gentlemen again.

In hindsight, maybe he was right. The first six months at Circuit City were challenging. My co-workers were mostly seasoned commissioned sales employees. All the sales employees were encouraged to sell warranties which wasn’t a big problem. There was a financial incentive to sell the warranties since we were being paid commission. I worked in the computer sales section; however, I was allowed to sale in other departments if I wished. Everything changed when Circuit City ended their commissioned sales structure. I survived the round of layoffs mainly because I hadn’t been there long enough. For the next year and a half I would never receive another pay raise. The reward for being most knowledgeable person in my department was that I got to do inventory every week. In many ways the writing was on the wall for Circuit City.
After the change in pay structure Circuit City became Best Buy Lite. The stores weren’t as appealing as the Best Buy stores and the employee morale was dismal. The managers at the store were under immense stress from corporate. Corporate management created an atmosphere of fear and intimidation for everyone who didn’t hold the company line. There was no tolerance for not selling warranties. Since I worked in the computer department this was annoying. There is no sales margin in computer sales so the only way Circuit City made money was on accessories and warranties. Selling a $150 warranty on a $450 e-Machine isn’t exactly an easy sell and it’s also a bad idea for the customer. That $5 USB cable you can buy online would only cost you $25 at Circuit City. With so much information available on the internet Circuit City didn’t have a clue what it was doing.
After a year of constant change my attitude had changed and I wasn’t the pleasant sales person I was when I started. It was a miserable place to work and I was completely stressed out. My store manager Virgil (who wasn’t exactly the sharpest tool in the shed) had me written up on one occasion because he said I didn’t “offer a warranty on a laptop sale.” The truth was he just didn’t like me. I had worked with the woman before and had already talked to her about the warranty. This is the kind of nonsense that was going on every day. For Virgil, besides having gizmovision that allowed him to see across the store in crystal clear HD he could also hear conversations 100 feet away. I still don’t understand why he was floundering around as a Circuit City manager when he had superpowers. I digress. It wasn’t Virgil’s fault. He had worked at the company for his entire life. He didn’t have a college education so the company was his clearest path to advancement. Virgil either did what management said or he’d get canned. In fact, the previous manager had been fired. I should mention that the location for my store was terrible and that caused a lot of headaches for everyone.
Eventually I moved on to greener pastures. A lot of the employees were going to college and it was a temporary stop on life’s road. I always felt bad for everyone else who had to stay. Circuit City was going south and the corporate management didn’t have an answer.

Meanwhile, not far up the road, Best Buy was selling largely the same products but in a way that was actually fun. Today, those two retailers can be taken as mirror images of one another — two approaches to the same challenge, one successful, one disastrous.
“Circuit City did not have a distinct brand position — they didn’t stand for anything in particular,” said Mark Michelson, who conducted the consumer research that was used to design the last round of Circuit City stores. “Best Buy is known for low price and good service; their employees are also among some of the most satisfied at any retailer. Wal-Mart became a stronger player in electronics, with dominance of the low price position. Amazon.com and other e-tailers offered convenience with low prices. Circuit City simply did not have a position, except a bad reputation for poor service and mistreating employees.”

The internet age was not kind to Circuit City. Shoppers were now more educated about products and were more concerned with price and availability. Best Buy’s stores were larger, more open, and their sales staff wouldn’t bombard you as you walked in the door.
I should also mention my immediate manager. Bobbie was her name and she was great. I believe she is retired now, but she was a tough woman who didn’t have tolerance for mediocrity. We butted heads on a few occasions but she was fair and I had a ton of respect for her. The people I worked with were great and I have a lot of great memories despite the fact the company was headed south. I still have friends who I worked with during that time and most of us are happy we don’t work at Circuit City anymore.