{"id":10710,"date":"2007-05-05T09:15:04","date_gmt":"2007-05-05T13:15:04","guid":{"rendered":"http:\/\/www.thecarpetbaggerreport.com\/archives\/10710.html"},"modified":"2007-05-05T09:15:04","modified_gmt":"2007-05-05T13:15:04","slug":"welcome-to-circuit-city-where-stupidity-is-state-of-the-art","status":"publish","type":"post","link":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/welcome-to-circuit-city-where-stupidity-is-state-of-the-art\/","title":{"rendered":"Welcome to Circuit City, where stupidity is state of the art"},"content":{"rendered":"

Guest Post by Morbo<\/a><\/p>\n

As the Carpetbagger mentioned<\/a> briefly on Wednesday, the electronic store chain Circuit City is in trouble. A few weeks ago, the super-geniuses who run the company decided to adopt an innovative cost-cutting measure: 3,400 of the chain’s most experienced — and thus highest paid — employees were told to hit the bricks.<\/p>\n

I’m don’t pretend to be Adam Smith, but at the time I remember thinking, “That sounds stupid.” My reasoning was this: Most people who like electronic gadgets and gizmos follow new developments very closely. They like to have the latest stuff and probably want to deal with a salesperson who knows all about what’s hot. Yet Circuit City just sent those people out the door and replaced them with inexperienced, low-wage newbies.<\/p>\n

How’s that working out for Circuit City? Not well, I’m afraid. The Associated Press reported<\/a> this week:<\/p>\n

Circuit City Stores Inc. shares plunged to a new 52-week low Tuesday, after the electronics and entertainment retailer said it expects to post a first-quarter loss because of poor big-screen TV sales and withdrew its earnings outlook for the first half of the fiscal year.<\/p><\/blockquote>\n

I realize that Circuit City might be having these problems even if it hadn’t fired anyone. The chain faces tough competition on big-screen TVs from (surprise!) Wal-Mart. But I can’t help but think that an experienced and knowledgeable sales staff might help offset that \u2013 especially if the chain valued these people and maybe even viewed them as an asset.<\/p>\n

A story<\/a> in The Washington Post’s Business section supports my view. The piece quotes analysts who assert that canning experienced and knowledgeable sales stuff was a dumb thing to do: “I think even though sales were soft in March, this is clearly why April sales were worse. They were replaced with less knowledgeable associates,” said Tim Allen, an analyst with Jeffries & Co.<\/p>\n

Circuit City has managed to annoy its entire customer base. Its potential customers probably fall into one of two broad camps: People who are really into electronics and people who just need an upgrade or a new device.<\/p>\n

Consider the second camp. My guess is it has some semi-Luddites in it.
\n
\nLet’s say you’re a tad intimidated by new technology. Maybe you’d like to have a giant TV or an MP3 player or a digital camera that’s also a GPS or whatever. People like that might be willing to pay a few extra bucks to get some help from an experienced salesperson rather than just plunk down some money at Wal-Mart and walk out with an item they can’t even turn on.<\/p>\n

A Circuit City ad campaign that offered customers the ability to draw on the experience and knowledge of a seasoned sales staff might have made the difference. Instead, Circuit City decided these people were a burden and handed them pink slips.<\/p>\n

Finally, there is this: Many people probably read the original news accounts about the firings. At least some of them are not likely to patronize a store that treats its most loyal employees so poorly. “Workers of the world unite” and all that. It’s yet another reason to bypass Circuit City.<\/p>\n

Hoping to save a few bucks, Circuit City has thrown itself into a death spiral that will probably lead to bankruptcy, restructuring or maybe even collapse. Its well-compensated executives have no one to blame but themselves.<\/p>\n","protected":false},"excerpt":{"rendered":"

Guest Post by Morbo As the Carpetbagger mentioned briefly on Wednesday, the electronic store chain Circuit City is in trouble. A few weeks ago, the super-geniuses who run the company decided to adopt an innovative cost-cutting measure: 3,400 of the chain’s most experienced — and thus highest paid — employees were told to hit the […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[617],"tags":[],"class_list":["post-10710","post","type-post","status-publish","format-standard","hentry","category-general"],"_links":{"self":[{"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/posts\/10710","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/comments?post=10710"}],"version-history":[{"count":0,"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/posts\/10710\/revisions"}],"wp:attachment":[{"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/media?parent=10710"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/categories?post=10710"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/tags?post=10710"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}