Curcuit City

Started Nov 18, 2008 | Discussions thread
Brooks P Veteran Member • Posts: 9,183
Re: Curcuit City

Califlefty wrote:

I remeber about a year ago Circuit City laid off all its experienced
employees and replaced them with low wage new hires, customer service
went into the tank. Lets hope someone learned their lesson.

That was actually the second time they did that. About 1996-1997 they fired all of the commissioned salespeople, some of which had been working for CC for many years, and were making very good money. These people also had many repeat customers who would buy only from the salesperson they had dealt with for years. When the commissioned salespeople left so did a good portion of CC's core customer base. The replacements were for the most part part-timers, making minimum or just above minimum wage. They didn't have a thorough knowledge of the product and little incentive to learn. When I worked at CC I frequently attended training sessions at CC regional training cemnter or at vendor's training centers, all that disappeared too.

The pay of the salespeople who stayed with CC gradually increased, and this latest round of cost cutting helped to reduce payroll costs. But again, it also cost CC customers.

Retail analysts are saying that CC can no longer compete against BB, and closing 20% of their stores will put them in an even more precaious position to compete. Their best hope of survival is to transform into a store that caters to a different customer base. Sell more high-end equipment through more highly trained and knowledgeable salespeople, sort of what J.C. Penny did a number of years ago. Penny's realized they were competing for the same customers as K-Mart, Sears, Target, Wal-Mart and a few others, and there just wasn't enough customers to support all those stores. They moved upscale, not up competing with the likes of Nordstrom's but a cut or two above Wal-Mart et al.

Can CC survive? Depends on who ends up piloting the ship.

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