Circuit City


Circuit City was an electronics retailer first founded in 1949 and defunct as of 2009.

As Circuit City gained popularity in the 80's and 90's, they became known for their red storefronts and more importantly, trained commissioned sales help.

Unlike most of Circuit City's competitors, salespersons were extensively trained to learn not only how to sell, but about the products they were selling. This allowed for an educated, if inherently biased, opinion about the products being sold. It also ensured customers were given attention, whether they wanted it or not.

A ongoing series of bad decisions and mismanagement in the late 90's and early 2000's set the stage for collapse. In 2000 Circuit City, the second largest home appliance retailer in the US, exited that business (leaving behind 1.6 billion in sales revenue). The housing boom in the coming years meant significant missed profits.

Seeing the success of Best Buy and its non-commissioned sales help, and noticing how much money many of CC's own sales staff was making, CC did away with its final differentiator: commissioned salespersons. This blatant misunderstanding of the situation (that someone on commission making $100,000 a year was worth SIGNIFICANTLY more than 4 untrained clerks making $25,000) gave customers no reason to shop at CC over any other retailer. Sales further suffered, and with the economapocalypse in the late 2000's, there was nothing behind the sign to keep it afloat. The executives that ran the company into the ground left with golden parachutes, while over 30,000 people lost their jobs directly, and many more indirectly as the consumer electronics industry took a significant hit.

Today, Circuit City's retail presence is, a subsidiary of Systemax, which also owns TigerDirect and CompUSA. There is no relation to the former company past the name.

Circuit City's main competition was Best Buy, but also Target, Walmart, Costco, and so on.

For more information, check out the Wikipedia page.

Read a great take on the incompetence that lead to the demise of the once strong retailer.


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