Tuesday, April 03, 2007

Circuit City Stores Inc., the second-largest U.S. electronics retailer after Best Buy Co., fired 3,400 of its highest-paid hourly workers and will hire replacements willing to work for less.

So they are firing what are probably their best, most experienced workers and replacing them for people who will work for less. Earlier they had moved from a commission-based pay structure to an hourly rate, only to see sales drop. They are firing the wrong people. They should fire the highest payed salaried employees. Boycot Circuit City!


Anonymous David H. Stern, M.D. said...

You don't have to boycott them. They will be out of business soon. Internet competition is hitting electronics retailers hard, and stores are dropping like flies. It is getting very difficult to find a place to walk in and buy equipment and even videos in many places.

Internet stores have the advantage of near-zero overhead for sales and minimal overhead for service. The cost in exchange to consumers is that there is no help in decision making or general guidance.

In many cases, consumers are willing to spend a little more to buy from a human being who will help them choose the product and be held accountable for what they are told. The only hope for survival in a shrinking market for "bricks and mortar" retail outlets in this category is to offer excellence in sales and service. They need to exploit their advantage in being able to establish a relationship with their customers.

Instead, some genius at corporate has decided that Circuit City needs to compete with Internet marketers directly, by trying to match overhead.

I was in a Circuit City recently, and service was extremely poor, primarily because of being understaffed, and the staff were were there were shackled with ridiculous bureaucratic policies that limited the individual's freedom to help the customer. They also had some surprising holes in their inventory. If you wanted something they didn't have, the answer was to check their web site.

I knew nothing of this story, but in the course of conversation, I told the manager that his bosses are deliberately killing their retail business. Instead of hiring more people, they'd rather close the doors and sell everyhing on-line.

This story seems to reinforce that impression.

10:38 AM  

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