mrducttape

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    • Tue Jul 15th 02:00 AM | Rating: 0 0
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      Who Can Buy Circuit City AND Successfully Turn It Around?
      Being one of the Damn Fools© who actually works for Circuit City, I see the following problems...

      1). Store operations are a disaster: From clueless Store Directors who have NO CE KNOWLEDGE, to fresh Operations Managers who watch the store being stolen from underneath them, there is no competence at the STORE LEVEL as to what the business of store merchandising is. This is the biggest reason the stores always look horrible from a branding standpoint. In CC there is a "team" of people expressly hired to merchandise the store called "product flow". Unfortunately these people have no concept of what the product is, where it goes, and no expectation to PRICE IT CORRECTLY. I currently have 180 day old laptops killing me in DISCO/DEVAL but PFT has to merchandise them as sales has no control over this. ( and we had no idea we had this product until last week, when I saw it physically). The fix is to dismiss all PFT members and get the department managers/supervisors to actively manage DISCO/DEVAL. Currently there is no incentive to do this as it adversely hurts the Store Directors margins, which is where there compensation is based.

      2). Selling by rote: In the stores the sales people ( like me) are expected to fill out a 8½x11 forms that tell me everything to attach to a sale, it's a variation of the used car salesman ploy used to give legitimacy to all the addons we are expected to do except that given the lack of training on product, many sales associates have to use this to sell. What's missing from this? The product, why is a HP better that a Toshiba for the customer? Why is selling Gateway better for me as a store ( higher margin, more actual profit dollars), but worse than Compaq if something goes wrong ( I can bill HP for service, I can't bill Gateway for warranty work). And this is just computers, cameras and TVs has the same learning curve problems, which leads me to my final point...

      3). Reliance on addons to make money: Circuit City relies on addons to make money. Were talking not only the warranties, but the overpriced services, to the Humble little USB cable to hook up the "free" printer you just got ( that will kill you in 6 months with the ink it uses). Lets take the USB cable, it cost you retail at CC $30 us, I can go down the street to Home Depot and get the same cable for $7.97. For CC that cable is ~95% margin, it adds 50% more profit dollars to the sale of a PC ( 8% of $549.99 is $44, 95% of $30. is $28.50, this is gross profit). Unfortunately for CC I'm not the only one who can figure this out. many people are opting out of warranties, services, and extras as they either have it, can get it cheaper somewhere else and perceive no value in getting it done at CC, or see the product as a disposable commodity that if it fails it is simply not economical to fix. All of these together doom Circuit City as the perception of failure looms over the company reinforcing the disposable nature of the product and people servicing will not be there in the future, so why invest in it.
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