Circuit City Plugs Into Cross-Channel Retailing

Despite the convenience of shopping online, many people still use the web only to research products to purchase offline. Multi-channel retailers with both physical stores and online stores have a leg up on pure-plays when it comes to serving and converting these buyers.

Circuit City is an example of a retailer that’s in tune with what customers want and expect from the cross-channel experience, offering customer service features that leverage its competitive advantage:

Most Customers Want to Pick Up In-Store

2/3 of web buyers prefer would rather research online and pick up in store than wait for the goods to arrive at their door – especially for big-ticket, considered purchases like major appliances, consumer electronics and computer hardware and time-sensitive purchases like gifts (Forrester Research, 2007).

Circuit City has offered in-store pickup since launching its ecommerce site in 1999. It is now known for its 24-minute in-store pickup policy: if your order is not ready at the counter 24 minutes from when you receive your email confirmation after purchase, you receive a $24 gift card.

There’s an added benefit of luring customers in-store. CompUSA reports that customers who pick up in-store spend an additional 35% while in-store.

Consumers Want Consistent Pricing Across Channels

Just this week, Circuit City has launched a new universal pricing program across its retail and online channels. The “One Price Promise” means you won’t find price disparity in flyers, in store or on the Web. However, there are exceptions for items like DVDs, CDs, video games, bundled offers, clearance merchandise and open-box items.

This is a great value proposition because it instills confidence in consumers that they won’t purchase from one channel only to find out they could have bought it cheaper through the other. It also makes it easier to plan offline purchases – simply look up the price online, in the weekly circular or even with a mobile phone.

Consumers Don’t Want to Pay for Shipping or Returns

2/3 of consumers say they are more likely to buy from retailers that offer free shipping. With a super-low free shipping threshold of $24, most everything Circuit City sells ships free.

1/2 of US online households believe it’s a pain to return items purchased online, and for 25% it’s enough of a hassle to prevent them from shopping online at all. Forrester Research, 2006 An easy in-store return policy helps ease the anxiety – so long as it’s communicated clearly that it’s offered.

What if you can’t offer in-store pick up (you’re a pure play or don’t have the IT systems in gear) – how can you convert customers?

If you carry products that are readily available from a number of brick-and-mortar shops – let’s face it – you’re at a disadvantage if indeed 2/3 of consumers would rather research online and buy locally. Get really, really, really good at communicating your value proposition.

Consumers love to use your site for research, but consider the reasons they avoid purchasing online:

  • Will the product arrive on time?
  • Will it arrive in tact? What if it’s damaged or not as described?
  • Am I getting ripped off with these shipping charges?
  • What if hackers obtain my credit information?
  • What if the online store starts spam emailing me?
  • How can I return the product? Will I foot the shipping bill?
  • If I’m not home when the courier drops by, I’ll just have to drive to the post office anyway…

In addition to a strong value proposition, does your website address these FUDDs (fears, uncertainties, doubts and dealbreakers)?

And why do customers love shopping online?

  • It’s convenient – I can comparison shop without a trip to many stores
  • I can save time, gas, parking lots and line-ups (especially during the holidays!)
  • Can shop with Bill-Me-Later or PayPal
  • There can be better deals online

Make sure your site design, marketing messages and customer service policies all address the common FUDDs and motivate shoppers to buy from you – whether you’re multi-channel or pure-play.

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6 Responses to “Circuit City Plugs Into Cross-Channel Retailing”

  1. Since Circuit City is about to go bankrupt, it kind of puts a damper on whatever they are doing. Check the stock quote for CC and you will see it is trading at $0.29 per share.

    They are trying to hold on until after the holiday season, but we will see if they can.

  2. MIchael says:

    @market bust – What do Circuit City’s financial issues have to do with the quality of their ecom experience?

  3. Um let’s see, if they can’t make money then they won’t be in business to support their ecom experience.

    What kind of ecom experience will it be when they don’t have a website presence?

  4. Market Bust is right. If Circuit City has such a quality eCommerce multi-channel experience, then why are they closing 150 stores in the US?

    Quite frankly, it’s either that not enough customers aren’t aware of the eCommerce component of Circuit City (because most people just walk into the store anyway–a very small percentage of people actually do shop online anyway), or Circuit City just doesn’t have a quality retail experience that buoys their online channel. Most Joe the Plumbers (or Six-Pack or eCommerce Consultant) want to be educated of the tech they’re buying and CC severely lacks that. The brick and mortar retail stores hire too many uneducated sales reps that don’t know an Intel Atom from their friend named Adam.

    I worked in a CompUSA as a sales rep–I know.

    CC has established itself as a retail presence and if they can’t get that right, then they’re worth just 29 cents a share.

  5. You missed a big motivator for “research online, purchase offline” – for me at least.

    For a lot of technology stuff it’s one thing to know that product X beats product Y on specifications, but things like holding it in your hand, feeling the size & weight and playing with the user interface can make the difference between sale and no-sale.

    I’ll often go to an electronics retailer after I’ve done my research and play around with the product. If I like it and their price is competitive then I’ll buy it, otherwise I’ll go home and wait a week for someone to ship it.

    Oh, and the “one price promise” is a good thing to push. Remember a year ago when Best Buy got caught out – their shop-floor computers pointed to a special intranet version of their website which looked identical but showed the offline prices rather than the online prices from the internet website. Consumers would come into the shop, see a product they liked, check the price on a computer (thinking they were checking the online price), find it was the same and so make the purchase there & then – when they might have saved money if they’d left the store and bought online.

  6. P.S. Congrats to Harry & Jason on yesterday’s award. Worthy of a blog post I think!

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