Circuit City plots retail comeback—online and brick-and-mortar
Circuit City has revealed its relaunch plans.
The once-bankrupt consumer electronics retailer will return to the scene on Feb. 15, starting with the launch of an “experiential website supported by IBM Watson’s AI commerce platform, CEO Ronny Shmoel said at the Consumer Electronics Show in Las Vegas, reported consumer electronics website Twice.com. The retailer will eventually expand to open kiosks, in-store shops and eventually its own showrooms, according to the report.
Circuit City has hired national integration service Skinny IT to provide home installations, and has contracted with Taylored Group to design experiential showrooms that mirror the website and range from 8,000-10,000 sq. ft., the report said.
Circuit City filed for bankruptcy in 2008, after which it closed its stores and attempted to operate strictly online. But it went out of business in 2012. New York area retail vet Shmoel acquired the brand, domain and associated trademarks in fall 2015 from IT supplier Systemax, which had bought them in a bankruptcy auction.
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Predictions, Observations for 2018
• Expect returns from holiday 2017 to be a big challenge. With the short labor and logistics problems that have begun to emerge, trying to return items in-store — still the preferred method even if goods were purchased online — is likely turn nightmarish. Again, this is an area that retailers have lost sight of in light of having a sharper focus on outbound issues such as delivery and targeting with consumer data. Returns will be retailers’ first and most difficult challenge to address in 2018.
• Expect a burst of bankruptcies early in the year followed relative calm. Following that, retailer financials will have stabilized enough to be able to say we have passed through the storm. The next wave of distress will come from financial mistakes rather than failure to shift to the digital era.
• Store labor is already one of 2018’s biggest retail challenges. Between short sales staff even at some high end stores, and the need for more highly trained staff even at regular and mass retailers caused by the in-store experience imperative, labor looks to be one of the most sizeable cracks in retail’s infrastructure. This was much in evidence this holiday season.
• Logistics and tech breakdowns will be another area retailers will really need to focus on in 2018. With the focus on the in-store experience, some of these crucial back-end functions were overlooked, resulting in several costly crashes over the holidays. Retailers need to refocus on their online offerings as a digital store experience, as opposed to the current utilitarian view taken of websites.
• Expect a growing number of cross-segment, cross-industry mergers. We refer to these as neumarkets with CVS-Aetna as an example. Companies will move beyond traditional retail to blur markets and redefine consumer expectations. Adjacent industries such as entertainment, technology, hospitality and healthcare are potential players to get involved.
• Investments in supply chain – from origination to last mile – will accelerate as retailers try to get their physical assets on par with the investments they have made in digital data and customer insights.
• Reacting to a fear of being left behind, retailers will begin to experiment with cryptocurrencies in ways that will be clunky and potentially disastrous financially. Meanwhile, consumers will shy away from mainstream use of cryptocurrency in favor of the frictionless transaction enabled by mobile commerce.
Greg Portell is lead partner in the consumer and retail practice of A.T. Kearney, a global strategy and management consulting firm.
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