Bye Bye Circuit City
Quick, which of these TVs is the best one? And how are these poor consumers are supposed to figure out which TV is the right one for them? It's darn near impossible to know, and often you only realize in hindsight that you bought the wrong one....
Operating in the depths of this quandry, Circuit City has officially bitten the dust. This comes about 21 months after laying off their most experienced sales staff in an effort to cut costs, so now the second largest US electronics retainer is letting its 30,000 employees go as the company closes its remaining 567 US stores. (Competitor Best Buy’s stock got a temporary bump from the news.)
Circuit City was founded in 1949 to sell televisions, but found itself unable to compete in a new world of digital TV, video games, and personal electronics. Why did it fail?
Only the insiders know the real story that the numbers tell, but some indication comes from a Dutch study of consumer electronics, which found that nearly half of all products returned by consumers are working fine, but the customers couldn’t figure out how to use them, or set them up, or connect them to the other gear they already own. According to the study, on average Americans are willing to invest only about 20 minutes fumbling with new hardware before they give up and bring it back.
This astounding information gives some indication of how important service and sales consultation is in this increasingly complex market sector. So when Circuit City gave the heave ho to its most experienced sales staff, it was probably already too far gone to save.
And although the Circuit City management certainly holds some responsibility for the collapse of the company, the broader picture of increasing complexity and confusion points to a great opportunity for any manufacturer that can simplify the process of getting the thing out of the box and making it useable.
This is a market niche that Apple has been faithfully developing since Steve Jobs returned to the company, as simplicity has been one of the primary design criteria that the company has applied with great success. So why aren’t more companies imitating Apple? One wonders …
For one thing, the discipline of product design in the consumer electronics world is notoriously mis-directed. Products are designed by engineers – who know what they're doing and are renowned for their willingness to tinker around until it works. Quite unlike consumers, who may not know what they're doing and have no interest in diagnosing the finer points.
Which means that products should not be designed for engineers; hence, greater attention during the design process is mandatory. And the sales process is essential, too, so by getting rid of its experienced sales people in 2007, Circuit City consigned its own collective IQ to a level below the minimum required to function; the minimum, that is, necessary to give customers suitable advice about which TV to buy, and how to set it up.