It’s Déjà Vu All Over Again: The Future of Retail Will Include Circuit City. They’re Back!

Circuit City Logo

I have written quite a bit lately regarding the changing landscape of the retail industry and how e-commerce is affecting that change. It seems that not every game changer in the future of retail is based online.

We all remember Circuit City, right? At one time, it was the giant in the consumer electronics retail space. With hundreds of stores, it was once the place to purchase your electronics gear. Started in 1949 as a tiny retail storefront in Richmond, Virginia, Circuit City grew under the leadership of Sam Wurtzel and his son, Alan. The company eventually became a household name and employed over 60,000 people.

And then, all of a sudden, it was gone. Circuit City filed for bankruptcy in 2008 and shuttered all of its 700+ stores, the last one in 2009. Its demise has been well documented and has been attributed to many things. Senior management’s attention being diverted from its base business by the startup of CarMax and the concentration on a failed DVD strategy called DIVX didn’t help. However, it is likely that Circuit City’s fall was largely accelerated by the success of Best Buy and Walmart. Of course, then came the recession of 2008. Lights out! An attempt at a total e-commerce approach was later attempted but was unsuccessful and ended in 2012.

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But wait. The Circuit City chain is being resurrected by Ronny Shmoel and Albert Liniado, a pair of “New York area veterans,” according to the trade magazine Twice. Schmoel bought the brand, domain name and trademarks last year and has plans to offer small, manageable stores targeted “directly at millennials.” The model also calls for a robust e-commerce presence. Shmoel envisions 50 to 100 company-owned Circuit City stores by the end of next year and 200 additional stores operated under eventual franchise agreements. The first store is due to be opened in Dallas in June.

The stores will be no larger than 4,000 square feet, a far cry from the old Circuit City footprint of 33,000+ square feet. The stores will also serve as same-day shipping fulfillment centers for online sales. Also planned are as many as 1,000 kiosks and in-store displays for proprietary Circuit City merchandise inside of other retailers within five years. The new stores will include pre- and post-paid smartphones as well as tablets, notebooks, wearables, networking equipment, gaming products, headphones, drones, 3D printers, health appliances, and DIY devices. Also included will be items designed to enhance the consumer purchase experience, such as a manned service desk, electronic price tags and interactive retail terminals that link customers to what is envisioned as a multi-SKU selection online.

It all sounds great and exciting. But the question is, why? Consumers can buy the same type merchandise that Circuit City will sell at Best Buy, Walmart, and Amazon, among other multi-channel retailers. And Radio Shack, although in bankruptcy, is still operating 1,000 stores similar in size to those that Circuit City is proposing. The critical difference and the possible key to success may be the fact that Circuit City’s business model takes direct aims at millennials, the group I identified in a recent article as the “future of retail purchasing power” in the United States. And, as Shmoel puts it, the hope is that Circuit City’s “tremendous traction and brand awareness” will drive success. We’ll have to wait and see.

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