Today’s gossip around the electronics campfire is that Circuit City is the next big chain to fade away. If true, Circuit City’s closure will confirm my belief that any electronics chain named after a geography is doomed for failure, joining the ranks of CompUSA, Computer City, and Incredible Universe. In reality, if Circuit City shuts down, it will add to a long list of chains that have gone under in the last two years including Ultimate Electronics, Good Guys, Tweeter, and Sharper Image. Not to mention the merger of K-Mart and Sears / Sears Essentials.
Many have blamed the economy for Circuit City’s struggles, while others point fingers at Best Buy (non-geography), who has pummeled Circuit City for many years. However, a quick visit to both stores quickly exposes Circuit City’s weaknesses. Messy aisles, unorganized displays, confusing pricing, old inventory, un-centralized check out registers, and the reliance of its unintelligible “Firedog” PC Service center have put Circuit City a distant second to its big rival.
Another theory is the growing size of today’s TVs. A good portion of Circuit City stores are located in mid-size shopping centers, that have limited floor space, but more importantly, very limited head room. As massive, 55-65 inch, flat screen televisions have become more affordable to Joe Shopper, the shelf space and wall space
required to offer a wide selection has become enormous. Circuit City’s low ceilings simply cannot display enough sets to keep up with the selection offered at Best Buy, whose tall ceilings are lined with television after television. Circuit City’s initial plans to litter metropolitans with mid-size stores perfectly fitted for shrinking electronics gear has essentially backfired.
Best Buy’s first carrot to attract shopping traffic to its stores were low-cost CDs and then DVDs, a tactic that Circuit City was quick to adopt. However, iTunes, MP3s, and Netflix have effectively ended the buzz that CDs and DVDs bring to retailers. Today, large screen televisions are the new carrot and Best Buy’s massive floor plans have been able to take full advantage of this phenomena. If Carl Icahn gets his way and Blockbuster (who is also hurting from Netflix) acquires Circuit City, look for the chain to shut down a number of its short stores and rely on its taller locations to push more and more televisions.
And please…change the name to Circuit Place.