How to fix Circuit City - James Marcum

Submitted by Patrick Grote on Wed, 10/01/2008 - 12:52pm.

The site The Consumerist is fantastic for handling consumer issues. Recently, they asked how you would turn around Circuit City and make it a success. It's a fascinating topic and I have a couple of ideas:

Outsource to Amazon: You need to move your online presence to Amazon. There's no reason to duplicate functionality since A) Amazon does it better and B) You need to pay attention somewhere else. While you're not going to make more money in the short term, in the long term it's going to help you focus on your brick and mortar stores.

Separate the clerks: The decision to dump employees with long tenures was stupid. While I don't think you can hire them back, you need to make sure that you have two classes of associates. The ones in red shirts are there to help you find things, stock the shelves and handle other "grunt" tasks. The white shirts are the knowledge experts. They're people you've sent to training, invested time in and pay much better. White shirts develop relationships with your customers by helping them solve their entertainment or business problems. I would imagine a white shirt would spend upwards an hour with a customer thinking about replacing their home entertainment system.

Allow online access in stores: You know people are going to shop around, so make it easy for them in the store. Don't pull a Best Buy and have different sites. Open the kiosks up. Let people get onto Consumer Reports or cNet to check out reviews. Let them price shop.

Handle customer issues publicly: Internet publishing is basically free, so anytime you have a complaint in the store, through email or postal mail, publish it. State the complaint and how your team handled it. Everything. Be transparent at how you solve customer issues.

Enjoy second place: Best Buy isn't going anywhere for the next few years. Don't be a Best Buy, Jr. Just because they have a geek squad doesn't mean you need to have a firedog. Make yourself different than Best Buy by caring about your customers.