"This company made massive mistakes."Circuit City announced today that it would be closing its doors forever after purging its inventory. Somehow, this just isn't news. Circuit City has been in its death throws for over three years now. They can blame the economy, or Best Buy, or any number of other factors, which I'm sure all played their role. But there is no denying that, like so many other businesses that are shutting down operations, someone on mahogany row was asleep at the wheel.
-George Whalin, in response to Circuit City announcing that it is closing.
It was July of 2008, and the company I worked for was expecting to bring on 8 new sales reps. One of my responsibilities, in addition to designing and delivering the sales training, was to get all of the new reps' gear together; this included getting them new laptop computers.
I did a little searching online and after visiting a few different retailer sites, I found a nice deal for a Compaq laptop, something in the area of $600 each, on Circuit City's web site. This looked like the deal we were looking for.
Now, I have some retail experience, and I know that you should always make sure that, if you are going to get the merch at a brick-and-mortar store that you should call and confirm that the merchandise is there first. I can't tell you how many times that a disgruntled customer would have seen a sale item on the web site and then yelled at me when there weren't any of that item left on the last day of the sale. So I call up the Circuit City near the Christiana Mall in Delaware.
ME: Do you guys have 6 of the laptops I see online?
CIRCUIT CITY: "Yep, I've got 8 of them
ME: Great. I'll be paying with a corporate check, will that be OK?
CIRCUIT CITY: Let me check. (puts me on hold for about a minute) Yeah, that should be fine. Just have your driver's license.
This is exactly how the conversation went. Now you, the lay-reader, probably don't see any issues with this transaction. Neither did I. Apparently, there was more to this conversation...there were undercurrents.
Fast forward to about 4:15 pm that same day. I have a corporate check for the sum of close to $3,600 (trying to take advantage of that there is no sales tax in Delaware). I stroll into the store and figure I would take a minute to look at portable DVD players, as we were going to need some of those as well.
There were 4. I should have been suspicious. C'est le vie.
So I walk over the to computer section. And wait. I think I was there for a good 7 minutes before anyone acknowledged my presence, which, in retail terms, is like an eternity. Already I'm starting to question Circuit City's dedication to customer service, being that it wasn't a busy day there.
Around the 7 minute mark, the adolescent proto-human finally comes over and begins our interaction:
SALES REP 1: Can I help you?
ME: Yes, I would like to buy 6 of these laptops.
SALES REP: I can't sell you 6, I can only sell you 1.
Pause for a moment. Did he just really say, I can only sell you one? Certainly, my ears have deceived me.
ME: Did you just say that you can only sell me one?
SR1: Yes. It says so in the flier.
ME: I didn't find this in a flier, its on the web site.
SR1: I can only sell you one.
ME: I need to speak to a manager.
This couldn't be right. I was sure that this child had misunderstood some benign corporate policy, and that the manager would be able to set us on the correct course again.
Another three or four minutes passes by, and I can now see the first sales rep wandering around the front of the store, not getting a manager. As my frustration level starts to grow, another sales rep, this one in his 20s approaches me.
SALES REP 2: can I help you?
ME: Yes, I would like to purchase 6 of these computers for some new sales reps that we have coming in next week, and I have been told that I can only purchase one. Here is the corporate check I have for the purchase.
SR2: Let me check with customer service and see what I can do.
A few more minutes pass by. Who would ever have thought that giving a retailer your money would be such a belabored task?
Now, both Sales Rep 1 and 2 have returned.
SR1: Customer service said that you can purchase 1 today and buy the other 5 through them, and they can ship it too you.
ME: OK, that seems reasonable. When would I get the other ones?
SR2: In 7-10 business days.
OK, hold on a second...7-10 business days? That's nearly two weeks for something that I can see right in front of me! And I have reps starting in exactly 1 week. I once again ask to speak to a manager.
Now, I'm starting to get full hot on the deal. So if I were a parent, and I had twins who were going away to college, what Circuit City is trying to tell me is that they will only supply one computer to one of my children, and the other must suffer.
The store manager rolls up, and I can see by the smug expression on his face that we are about to go to war over this. At this point, I really don't care about the computers, as I'm sure that there are other deals with other companies, but now its about the principle of the matter.
MANAGER: Can I help you?
No, clearly you cannot, but we'll go ahead with this charade anyway.
ME: I would like to purchase 6 of these computers for my incoming sales reps, and I have a corporate check right here for said purchase. I am being told that the only way to get the number that I need is to order them through customer service, but they will not arrive in time for when the reps start. I see that you have 8 right here, can I please purchase 6 of them?
MANAGER: (showing me the flier, the smug expression deepening on his face) Well, as you can see here, sir, the flier clearly states that there is limit one per household for this item.
ME: I didn't read the flier, I found this online.
MANAGER: The web site and the stores are two totally different things.
ME: Clearly.
Yes, you read correctly, and that is an exact quote. Apparently, the Circuit City stores and the Circuit City website are the equivalent of two separate business entities. Now mind you, the stores that are not suffering through this economy in a way that is endangering their business, such as Target and REI, have fully integrated their web site and physical stores so that there is a seamless shopping experience. So, perhaps, this is one of those big mistakes that Mr. Whalin was speaking of.
The conversation continues:
ME: So let me understand you...I want to buy these computers, and you are going to turn away an almost $4,000 sale?
MANAGER: Yes.
ME: What if I bought one now, then put it in my car, then came back in and bought another one? Would that be OK?
MANAGER: Yes. (emphasis added)
Yes. I think that we have finally found the root of Circuit City's problem: they don't want your money! Why would they, as a retailer of discount electronics items, a company born in the very image of capitalism, want your money in exchange for goods and services?
Ultimately, we purchased the computers at a lower price from Staples. And now Circuit City is burning.
There were a few issues here that the leadership team should have addressed years ago:
- Empower your staff to make smart business decisions. Sure, there are rules and policies, but there needs to be flexibility when it will be a good move for the store. Who cares if 1 person or 8 people get to spend their money on the same item? The revenue would have been the same.
- Train your managers better. This guy was more interested in being right and lording his (perceived) power over me than in making a smart business decision and delivering stellar customer service. I know that being a manager in retail can sometimes create situations that are a blow to your ego...get over it. That's the job.
Ultimately, Circuit City's downfall is their own fault, as they continued with a business model that was virtually xeroxed from Best Buy, and any college freshman in a business program can tell you that is not the best way to run a business. Years ago, Circuit City was known for having some of the most knowledgeable sales people around...now, its some $7.50 an hour teenager who can barely spell anything not in "text speak". Circuit City sold their soul long ago to make a quick buck, and now, its time to pay the piper.
I'm guessing that my story here is not unique. Its this kind of corporate culture that perpetuates in perpetuity when paired with greed and ignorance that will continue to cause the downfall or businesses.
And it always starts, and ends, at the top.
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