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How Circuit City could steal market share from Best Buy

circuit city Several years back it looked like Circuit City was really spiraling downward. Their business model was outdated (commission-based), they suffered some losses from a few bad moves like the DIVX fiasco and in-house appliance sales, and it seemed like the company was really losing market share.

In the last few years they have gone through a bit of restructuring, had gotten quite a bit of a facelift and once again seems poised to give Best Buy (17% market share) a run for its money.

They took some bold moves in the process, like offering customer reviews of all their products on CircuitCity.com. Best Buy must still fear a supplier backlash because they are not offering that feature to this day, which is a shame. Amazon has been doing this for years successfully, so I don’t know why a major chain wouldn’t.

I believe the next step should be bringing those reviews right into the store. They should setup either a number of kiosks that allow you to look up any shelf product or offer a “shopping companion” handheld device that allows you to scan any product and read the aggregated customer ratings and reviews for that product.

What made me think of this? I went to Best Buy yesterday to buy a printer for my mom. I wanted one with decent quality and low ink replacement costs. All the associates were busy and after waiting for 10 minutes I left and drove to Circuit City. I asked if I could get some help with printers and was told an associate will be right with me. After 10-15 minutes of waiting I got annoyed and left. I will now purchase it online.

Both stores lost that sale because no one could help me and I am too busy to wait half an hour for an associate who may or may not know the answer to my question. If I only had a connection (from a kiosk or a handheld) where I could browse socially-tagged and aggregated reviews, I would have made my decision based on other people’s experiences, without a paid associate’s help.

I think that’s the holy grail of retail stores - bridging the gap between online reviews / socially aggregated information and the physical store where you can instantly buy the product. How about it Circuit City? You have the data - just bring it into the store.

November 3, 2006 · Filed under marketing, social networks, web 2.0

Alex said,

January 20, 2007 @ 1:26 pm

While it would be convenient, and yes, very helpful to us associates; I’m willing to bet that neither CC or BBY will do anything of the sorts.

They want associates to engage you, because associates, as real people, are easier to relate to and can more successfully sell you drivers–that means installs and service plans. Now I’m not saying that these associates are trying to sell you things you don’t need (at least not CC); they’re moreso helping you find out what you do need. Intangible things are very commonly overlooked by the customer, and end up causing frusteration. In the end, this reduces returns as well. Many a computer I have seen returned because the person caught some virus or some spyware and got frusterated with it.

Offering drivers on price tags, in ads, or by “electronic helpy thingy”, simply doesn’t and hasn’t ever worked.

Markus said,

January 20, 2007 @ 1:49 pm

Thanks for commenting Alex, but the issue is that often times the associates are way too busy so you lose the sale altogether.

There is a certain percentage of your customer base that does not need (or want) hand holding.

bubba said,

February 1, 2007 @ 11:21 pm

hey hey, heres an idea. Instead of waiting for someone to take your hand and tell you whats good and whats not, do some research on those products. you know, do that thing called reading, artards. You people cry when you think the employee has screwed you over with a sale but when you dont have someone to help you because you don’t take 20 seconds on the net to look you cry even louder. if you don’t trust us then actually do something for yourself (yes i werk at a large retail store). and omg people RTFM (google it if you’re too stupid to know that too)

bubba said,

February 1, 2007 @ 11:22 pm

And don’t say, “you lost my sale”. I don’t lose anything. I get a break.

Markus said,

February 2, 2007 @ 12:01 am

Thank you for your insightful point of view bubba.

korbin said,

March 24, 2008 @ 10:26 pm

Being employed at Best Buy for the past several months now and being a tech geek since i was 8 i feel i can somewhat address your rant here… From an employee standpoint, it’s difficult to give each and every customer that walks through our door a personal customer experience(which is what is taught and aimed for in all Best Buy stores with an approach they call CAREplus)… It’s my job to be up to date on customer reviews on all products (which is offered) and even customer reviews for each and every department in each store… Best Buy is a high consumer-rated company. we take pride in this. and it’s my sincerest apologies that you did not get help that one day. Perhaps it’s even several days or just the store you go to in which you received poor service. this is experienced industry wide though.

Being a consumer pre-best buy and while outside of work i do demand prompt, friendly, and knowledgeable service. Yeah, all of us demand it but do not receive it every retail business visit.

Having said all that, i do not believe Circuit City is really going to overtake or even come close with Best Buy in the near future in service or market share. Best Buy continues to lead the way(as it always has since the name change in 1983) in the consumer electronics retail market with its company goals and vision. Let’s face it. Best Buy was the first retailer to sell DVD. First to go totally anti-analog and totally digital. Best Buy decides to promote Blu-Ray and leads Toshiba to drop the pursuit of HD DVD competing high definition disc technology.

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