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Circuit City’s CEO Philip Schoonover has done a couple interviews this week, one with the WSJ and the other with the Times-Dispatch of Richmond, VA (Circuit City’s Headquarters).  Here are some of the more interesting questions and answers from the two interviews. 

WSJ: Why do you think the new, smaller-sized store will improve Circuit City’s profitability and sales growth?

Mr. Schoonover: It offers a different experience. Customers can touch and compare, and learn how to use the most complex products and services that we sell.
 
It is a more efficient use of space. Typically, our stores are 35,000 square feet, and less than 18,000 of that is selling space. The new prototype is 20,000 and has 17,000 of selling space. This fundamentally changes the economics. We can get higher revenue per square foot, higher-margin dollars per square foot, and we can find additional sites that weren’t necessarily available for our old box.

I’m a big believer in high interactivity shopping experiences, so it will be interesting to see what they do with the new store format.  The main concern I have is the smaller stores.  Will this mean a smaller product selection?  Will they turn into the Radio Shacks in the malls?  It’s almost as if they are positioning themselves between Best Buy and Apple, and I’m not sure they can build an identity between these two and flourish.   Apple has set the bar high for shopping experience and Best Buy’s product selection is better than all except for Fry’s and a couple regional players. 

WSJ: How is Circuit City’s multichannel approach — store, Internet and call centers — any different from the approach of its two bigger rivals, Best Buy and Wal-Mart Stores Inc.?

Mr. Schoonover: We have a culture that is beginning to cooperate and work together to provide a customer experience that is different and better.

One example is our “24/24″ promise. Order online, and we’ll have your purchase ready for you at a store in 24 minutes. If not, we’ll give you a $24 gift card. Our technology is unique and allows us to make that promise. Another is content. We have product reviews by leading consumer magazines. We have a whole explanation on what you need to make this new digital entertainment world work.

The 24/24 program that Circuit City has produced is one of the best implementations of Buy Online, Pick Up In Store, however they have to figure out how to integrate it into the rest of the store.  Recently, I bought a hard drive for my wife’s computer via the 24/24 program.  The BO/PUIS experience was great, service was fast, and it was waiting for me when I got there.  When I walked into the store, I saw a DVD on the rack that I’ve been meaning to pick up as well so I took it to the counter with me.  When I asked the store associate to add it to my order he explained that he couldn’t.  I figured it was a systems technology issue since the web order had already been paid for on the web, so I asked for the associate to just do a second transaction after we were done with the first.  Surprisingly, he said that they could only do 24/24 orders at that counter, and that I should go to lane 1 to check out for the DVD.   This is obviously a dissappointing downturn to the experience and I wonder how many lost opportunities this has presented for Circuit City.

 The other thing I would have liked to hear in Philip’s reply was that Circuit City would be capitalizing on a wider product selection available on the web with the ability to deliver to store; or order from the store and deliver to my home.  As Murphy’s Law dictates, as soon as I replaced my wife’s hard drive, her DVD burner went out and I had to go shopping for a new one.   So I went online to CC’s website and looked for a DVD burner with a SATA interface.  They had one in the web catalog yet out of stock, and none in the stores.   So I switched to Newegg.com where they had 26 different burners available from about 9 manufacturers.  Multichannel retailing to me is about giving the consumer the best benefits of each channel and choice of how & when I get the product. 

TD: What do you think the business will look like in five or 10 years?

Mr. Schoonover: I think it could be a great services business with retail roots.

I think it could be the best and most convenient multichannel retailer in our sector.

And I think we can have a very different but very cool store experience.

I thought this was an interesting reply.   I’m with him on these three, but I think he should reverse the order of the answers.

A few other interesting pieces on Circuit City this week.

Circuit City’s Schoonover Just Doesn’t Get It  - Seeking Alpha

Circuit City prototype comes to Houston