Update: According to the Huffington Post, "Circuit City Stores Inc. hopes to sell its brand, trademarks and e-commerce business to Systemax Inc., the same company that purchased electronics retailer CompUSA’s intellectual property when it closed in 2008."

Original Article: It was recently brought to public attention that the late Circuit City had a message on its site claiming that it would be re-opening online in "the coming weeks." The message suggested that while its brick and mortar stores were gone, the company might continue as a web-only entity.

Commenting on WebProNews, Doug Meacham of NextUp says:

Any relaunch of circuitcity.com will be in name only. As part of the liquidation of the corporation’s assets, the URL for the site was put up for sale. The change in messaging suggests that someone has purchased it. So to answer your question about what other plans Circuit City has up it’s sleeve, the answer is none because it no longer exists.

That may be the case, but the message seems to indicate that someone has plans for that brand/domain. Meg Marco at the Consumerist suggests, "Perhaps some poor fool has plans to buy the brand and open a web-only store— similar to what happened with CompUSA."

Hitwise looks at who benefits the most from Circuit City’s absence. Not surprisingly, Best Buy, Walmart art, and Radio Shack are among the premiere beneficiaries. Take a look at Hitwise’s graphs:

Not that whoever re-opens (if they do) circuitcity.com won’t face stiff competition from sites like those mentioned above anyway, but Best Buy has recently launched an affiliate program/API initiative called Remix, which will put Best Buy products in a lot more places around the web. It’s going to be interesting to see if circuitcity.com can be resurrected to any significant degree of success. For the time being, I’m not even getting a page to load at the URL anymore.

Hitwise reports on where online consumers go after being greeted with CircuitCity.com’s Sorry-we’re-closed message. Twenty percent of them float downstream to Best Buy’s website. Ten percent go to Wal-Mart, followed by Kmart.com and Sears.com with four and two percent respectively.

These are obviously the brands on the top of consumers’ minds and their online behavior might very well mimic offline behavior: Oh, Circuit City’s closed. Let’s go to Best Buy across the street, then.

But what was really interesting about the report was Radio Shack’s aggressive poaching of Circuit City customers in the search results. Though non-searching consumers may not have thought of Radio Shack as often, searchers using branded terms from a portfolio of Circuit City’s portfolio of branded terms were met with paid search ads for Radio Shack.

Three percent clicked through to Radio Shack’s website. Best Buy, on the other hand, ran no targeted search campaign, and only just over one percent clicked through to the site from the organic results. This was a very clever and apparently effective strategy on Radio Shack’s part.
 

As you can see, the site is not operational at the moment, but will be soon. How will it do though if it does re-open though? The brick and mortar version of Circuit City obviously couldn’t cut the mustard any longer, but the company’s online presence was on something of a downward spiral as well.

Back in January, WebProNews referenced research from Hitwise indicating that web traffic was suffering. "For the week of Thanksgiving, which is typically a peak traffic week, the market share of visits to CircuitCity.com had dropped 33% from the previous year within the Appliances & Electronics category," Hitwise’s Heather Dougherty reported.

 The competition online hasn’t eased up at all while Circuit City’s been out of the game. In fact, Best Buy, one of its biggest competitors has launched an affiliate program and API that has the potential for putting its products all over the web and driving all kinds of business its way.

I wonder if Circuit City has similar plans when it relaunches. The web has far more competition, but it also has room for way more opportunities and innovation. It’s going to be really interesting to see what Circuit City has up its sleeve, and perhaps even more so – if it will work.

Circuit City had proven to be quite a bit less popular with shoppers this holiday season than most.  Hitwise’s Heather Dougherty notes, "For the week of Thanksgiving, which is typically a peak traffic week, the market share of visits to CircuitCity.com had dropped 33% from the previous year within the Appliances & Electronics category."

 (Credit: Hitwise)

Perhaps worse still (in terms of speed), going from Thanksgiving to Black Friday to Cyber Monday, Circuit City managed to slip from being the fifth most visited site among the Retail 500 to seventh and then ninth.  Eep.

Then there’s the matter of what sort of customers were abandoning Circuit City.  Dougherty writes, "The biggest loss was affluent shoppers with an income over $150k where a share of 4% of total traffic represented by the group was lost and replaced by visitors with lower household incomes."

For the sake of the economy and however many employees, hopefully we won’t see these patterns getting repeated anywhere else in the near future.

Just last week Circuit City announced the closing of 155 stores which meant 155 fewer music stores.  Today the retailer filed for Chapter 11 bankruptcy protection.  According to the Associated Press:

"…the nation’s second-biggest electronics retailer, filed for bankruptcy protection on Monday but plans to stay open for business as the busy holiday shopping season approaches.It filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a reorganization plan. (more)

Comments

At this point, you could almost say Circuit City’s latest promotion is a last-ditch effort to right pricing-policy wrongs. The One Price Promise guarantees customers the same price in the store as the one listed online. But that couldn’t be the reason the company is failing—Best Buy was found out setting up fake intranet sites to trick customers into thinking they were mistaken about a listed online price, and their stock’s doing better than ever tons better than Circuit City’s.

It strikes me as odd that Circuit City even bothered with a promotion about as if it’s something special they’re doing, or that they bothered with a press release where they act surprised customers expected the online price to match the store price.

Egads! Low and behold—how strange—customers think there’s something shady about that!

News flash, CC, obviously there’s much more wrong than that. I’m not going to pretend I know what in particular is going on—Blockbuster took a look at the books and bailed, though—but I know from experience negotiating for a new TV was revealing. The TV online was something like $729, and when my wife and I got to the store the price was quite a bit higher—don’t remember exactly but it was at least a hundred bucks more. Your sales rep pulled it up on the computer and found it for the in-store price. Luckily, my wife had her BlackBerry with her and because I’d seen what went on with Best Buy I asked her to look again.

I don’t know how that would have turned out because as soon as she started downloading the Circuit City site, the manager showed up, pointed to a better and bigger TV he’d give me the same price we remembered from online.

That’s just bad business, hypothetical Circuit City executive. It makes you look really shady. At least I got my bigger and better TV. Can’t believe, though, you ever thought it was Kosher to quote different prices on the same merchandise.

Just my opinion. (Commentary is that of this writer only.)
 

 Google Search Results For Polaroid T730 Compact 7mp Digital Camera

Two things I learned: 1. When writing a review, don’t be an ass; 2. If you’re going to spend a lot of money on competitive keyword advertisements, it’s likely a best practice to give the searcher what they are actually searching for.

The top organic spot for those keywords doesn’t belong to Polaroid, as one might expect. Actually, Polaroid is nowhere to be found on the first page, organic or paid. Way to be in charge of your brand, there Polaroid.

Had the company been more proactive about SEO – yes, they actually have a website, and even a product page for the T730—interested customers would not have to suffer through number-one-spot squatter Woot.com’s excruciating review by "WOOTBOT," which earned the number one ranking as of midnight this morning. Despite the stupidity of it, I was still miraculously interested in learning more about the camera*, mainly because WOOTBOT didn’t mention a price.

Back to the search results, then. Not willing to brave another organic, non-Polaroid page on the product, I turned to the retailers who popped up for the keywords, who surely would have detailed (unbloviated) product information that included pricing, especially since I had to spend their money to find it.

Top result: Circuit City. Of course they’ll have all that. No, they don’t. In fact, clicking on the top paid search result directed me to a listing for Bissell Pet Odor & Removal Formula with Scotchguard, which retails for $12.99, in case, unlike me, you actually have a pet or find yourself in need of that information on The Price Is Right.

 Circuit City’s Paid Search Destination

Good job capitalizing on that ad spend, Circuit City. I’ll bet Office Depot knows how much it costs. Nope. Their paid link takes me to a landing page advertising 10% off, well, anything I guess. So if I ever actually find the camera and learn the price of it, I can save some unknown quantity of money.

Shopping.com? Close. Polaroid T730 memory cards, but no camera.

Amazon? Blank white screen. Service unavailable.

BizRate? Everything but that particular product.

Target? Enter your zip code to see the Target Weekly Ad. No thanks, and go screw yourself.

 Target’s Sign Up For The Weekly Ad

Wal-Mart? Polaroid TVs, cameras that perhaps are similar, but no trace of the T730.
 
Back to the organic results, then. Byrev.net had a much less BS-ified review, but still no price. DealsPlus: jackpot. $74.99, $5 shipping. Too cheap for me to be proud of as an expectant father, and I’m way too invested now to be disappointed with general affordability. I’ll dream about that $850 Canon listed below, and eventually buy something in between.

But here’s the point: Every one of the major, corporate retailers failed the search marketing test. None of them SEO’d their sites well enough to pop up in the top 10 organic rankings where searchers automatically associate credibility—until they read something written by WOOTBOT—and none of them actually capitalized on an interested buyer via great, relevant, and/or useful landing pages.

Lesson: Shoppers, especially during the discovery process, will give you, maximum, ten seconds (more like four) to earn their visit and/or business. They need information, not fluff, redirection, malfunction, or similar/related product pitches. Give them the right landing page and you’ll not only not waste your daily ad spend, but you may just earn a loyal customer who’s very tired of the BS.

_{*My best guess was that the review overall was positive, after sifting through stories of fat men and vacuums, and obscure Latin and German phrases nobody searching for camera information on the English version of the Internet needs to ever, EVER know.}  
 

The market analysis is that the deal would be less than stellar for Blockbuster, but would be a needed shot in the arm for Circuit City. At least, that’s what the change in share price seems to suggest.

But it’s actually a darn interesting idea, one that is a clear and logical partnership if you have walked into an outlet of the more successful Best Buy (NYSE:BBY) chain: Best Buy devotes a good 50% of its floor space to DVDs and music CDs. It’s an interesting mix because it shows the company focusing on both players and content, whereas Circuit City has barely any space devoted to movies and therefore is missing out on the "blade" part of the old adage that you give away the razor and sell the blades (or, the modern equivalent, lose money on the printer but make a killing on the cartridges)

Further, Blockbuster stores now stock limited hardware too and it would make so much sense for Blockbuster to expand to having a store-within-a-store where people could, for example, buy a Playstation 3 and rent a half-dozen games to go with it, or buy a low-end Blu-Ray player and get a few free rentals on the spot so they can enjoy the marvelous world of high-def TV.

Co-branding offers great potential too: For example, why not have a "Blockbuster Video Central" located within Circuit City, denoted with a different design, color scheme, and even an employee or two in Blockbuster uniform, and — a key idea — allow people to rent movies while they’re in Circuit City.

Vice-versa works too, of course. Imagine walking into Blockbuster and there’s a 500sf corner where they’re selling the ten hottest items from Circuit City’s video inventory, along with special in-store promotions. Have one well trained Circuit City employee (yes, I now that’s an Achilles heel of modern retail consumer electronics stores) on site and now the Blockbuster folk can focus on recommending movies and games, while the Circuit City person can answer compatibility and capability questions.

Just as critical, the two chains need to act as one in all but brands, so if I were to buy a DVD player at Blockbuster, I could take it into Circuit City for repairs, and if I rented a few movies while at Circuit City buying a new phone, I could drop them off at the local Blockbuster and they’d magically find their way back to the correct location. For that matter, buy a DVD player or TV at Circuit City and get three months of free membership in the Blockbuster online video rental service that competes directly with Netflix.

I’m excited at this prospect and think it holds great potential for mutual benefit in a way that most potential acquisitions/mergers don’t seem to truly offer benefit to both the acquirer and the acquired.

Yes, there are storm clouds on the horizon, most notably the razor-thin margins of consumer electronics which has been what hobbled Circuit City in the first place and the imposing recent entry of Wal-Mart into consumer electronics, but there’s a logic to this partnership that makes me puzzled why the Journal is reporting that Blockbuster is bringing its offer public because "[Circuit City] has failed to give the "due diligence necessary to allow Blockbuster to make a definitive proposal."

I think Blockbuster + Circuit City is a solid pairing. Now let’s see what the market thinks and how it all unfolds…

Comments

The Circuit City prototype store is part of an IBM complex opening to the public next week in the virtual world of Second Life.

Rather than perusing an online catalog of items, Second Life residents will be able to use their avatars to actually “shop” in the virtual Circuit City store, picking up and checking out products in a manner that more closely reflects a realistic shopping experience. Customers will then be able to order items in the store and have them delivered to their homes.

Click for Full Size Image

“Teaming with IBM in the virtual world is as much about sensing and learning from the community as it is about commerce. These immersive environments provide an interactive forum for testing and feedback as we focus on the next generation of customer service,” said Bill McCorey, senior vice president and chief information officer of Circuit City.

“Our ultimate goal is to understand the implications of virtual 3-D worlds on multi-channel retailing and to extend the connection we have with our customers to new spaces.”

Additional features in customer service are also on the horizon for the IBM/Circuit City venture. The companies are developing technology where customers can actually go to the virtual store for troubleshooting purposes, receiving a live tutorial on how to remedy common technical issues.

The two companies are also working on ways to provide live demonstrations of product features, which are aimed at giving customers a visual point of reference when it comes to operating new equipment, acting as a supplement to the product manual.

Will this compel competitors such as Best Buy to jump into the Second LIfe fray? It will be interesting to see what impact this move has on the retail industry at large.

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Joe is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.