Archive for October, 2008|Monthly archive page

Circuit City: The Lost Years

I started my professional career as a programmer with Circuit City in 1985 and I remember vividly how very cool a place it was to work.  Not only were you part of a company that sold a cool product, but the organization treated people like family.  On top of that, consumer electronics retailing was a specialty back then and Circuit City was the king of the mountain.  There were many reasons for their dominance but the biggest was that for all intents and purposes, it was still a family business and the values that founders Sam Wurtzel and Alan Hecht built the business on were ingrained in the culture.

I’ll digress for a minute to share some very early Circuit City trivia as a way to convey how savvy a businessman Sam Wurtzel was.  Bear with me, there is a reason for this detour.  It was the summer of 1948 and Sam was driving his family to Florida for a vacation.  Coming through Richmond, VA, Sam saw a billboard announcing that WTVR – “The South’s First Television Station” was on the air.  Sam figured that with a TV station here, Richmonders were going to need a TV store.  With that as his business idea, Sam rented out a corner of a Sears tire store and went into business selling TV’s door to door.  The concept of Tryvertising has been talked about in recent years, but it’s basically how Sam approached selling TVs.  He would deliver the TV on Tuesday and let customers keep it for a week to try it out, which of course meant that they got to see NBC’s hit Texaco Theater with Milton Berle on Tuesday nights. The following Tuesday, Sam was to pick up the TV, but not wanting to miss that evening’s Milton Berle show, most customers decided to purchase it instead.  Simple idea, brilliant approach!

Sam and Al developed the WARDS TV business during the 1950’s.  The “W” stood for Wurtzel and the “ARDS” were Sam’s kids’ initials.  During the next three decades, several other store formats were experimented with. The name change accompanied a regional expansion and public stock offering in the 1980s.  All along the way, Wurtzel, and later his son, Alan, built the business on the the 4-S Model: Service, Selection, Savings & Satisfaction, which was credited in Jim Collins’ 2001 classic “Good to Great” as the differentiator that allowed Circuit City shares to perform 18.5 better than the market between 1982 and 1997.

The 4-S model was the customer lens through which every “associate” viewed their work. Whether developing software or working on the sales floor, everything you did was about delivering those four S’s to the customer. Earlier this week, The Consumerist posted a video compilation of old Circuit City TV spots from the company’s heyday years of the late 80s and early 90s.  The messages in these spots rang true then, but sound like empty promises a decade after the 4-S model was abandoned and management stopped focusing on what mattered – The Customer.  The results speak for themselves.  With a stock price now around $0.28 (yes, that’s 28 cents!) and likely to follow CompUSA into retail oblivion, it’s sad to think about how the leaders of this company were able to destroy it in just ten short years.  The comments on The Consumerist post tell the story of how the brand is perceived today.

Take a walk down memory lane (if you’re old enough), and remember that you brand is not what you say it is, but rather what your customers say based on their experience with you.

The Future Really Is Now!

The exterior of the Spaceship Earth ride at Disney World’s Epcot park is perhaps one of the most recognized landmarks on Earth.  Housed in the giant geodesic sphere that serves as the gateway into the Future World section of the park, the ride is one of Disney’s finest examples of audio-animatronic magic.  Created in 1982, this ride takes the traveler on a journey through the history of communications technology starting with cave drawings and ending with Disney’s vision of 21st century communications.  After 25 years, the ride was updated this past February but its amazing to to consider how accurate the original vision of the future was.

The final scene of the old ride depicts two teenagers talking to each other; not on the telephone, but over an audio/video link using a computer and flat panel display.  The kids are neighbors of sorts, although in this future view, they are part of the same “global neighborhood”.  One is apparently in the US; the other in Asia.  They can see each other and the computer is translating their words into each other’s language.

In 1982 when the ride first opened, this idea must have seemed fantastic, but in the last few years, the technology and bandwidth have become generally available to enable this type of interaction.  The realization of the future really being now hit home this afternoon as my family was sitting outside enjoying a warm October afternoon.  As teens like to do, mine was pretty much ignoring her mom and I, and was instead, having a conversation with three friends.  Of course, teens no longer tie up the landline phone for this activity like they did back in 1982.  Mine prefers to use her computer and social sites like BlogTV which enables video streaming.  The friends she was talking to were neighborhood kids.  Global neighborhood kids to be more accurate; from Norway, Sweden and Austria.

Consider the implications of that for a minute. What was considered part of a fantastic future just a few years ago is now an everyday activity for teenagers. Soon, they will be starting their careers, building families of their own and generally running the place.   How fast will their ideas and trends travel as the distance and barriers between different cultures becomes smaller and smaller?  How much will they begin to see and respect one another for what they have in common instead being fearful of differences?

Spaceship Earth image courtesy of Jeff B

Not Expecting Great Things at Kohls

I’m a frustrated customer.  I drove to a local Kohl’s store today to purchase the Men’s Nike Air Tri-D II running shoes that they advertised in their 10/1 – 10/11 sale catalog.  The shoe department at that store was a disaster.  There were very few men’s athletic shoes on display and the shelves were in disarray.  The shoe I wanted and that they had gone to the expense of advertising, was not even on display.  I asked someone to check stock and the answer came back that they only had a size 8-1/2 in the back room.

Years ago, retailers used to practice a fraudulent tactic called “Bait & Switch” in which a desirable item was advertised at an attractive price, but in reality, there was little or no inventory to support the offer.  When the customer arrived at the store to purchase the item, they would be offered an alternative item which often provided the retailer with higher margin.  There are Federal Trade Commission laws that make that practice illegal.  If a retailer knowingly advertises a product that has limited availability, they have to say so in the ad (“quantities limited”). I understand that sometimes operational issues come up which can result in advertised products not being available and I’m assuming that is what happened in this case.  Nevertheless, it was a frustrating waste of an hour of my time.

Multichannel Retailing to the Rescue (or NOT!)

I wanted the shoes to take on a trip this week, but settled for ordering them on Kohls.com so I could take advantage of the additional discount offered to Kohl’s Charge customers.  A search of the site took me right to the shoe, but when I went to put it in my cart I saw that it was only available in sizes (wait for it….) 8 and 8-1/2!

I could understand a single store in a 1000 store chain not having a particular advertised item, but to not have enough product available through a national website is a big problem.  Kohl’s Merchandising team has to know about this.  Any merchant responsible for a line of products checks to be sure they have sufficient stock chain-wide before advertising something.  In this situation a good approach would have been to put a note on the product detail page acknowledging the shortage of inventory and apologizing for the inconvenience.

This is a great example of a really bad customer experience.  Kohl’s tells me to “Expect Great Things”, but based on interactions in two different channels (web and store), I “expect” that I won’t be shopping at Kohl’s in the future.

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