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Circuit City Customers Destined for Best Buy, Wal-Mart
NPD doesn’t see much ROI for CE pros from former Circuit City customers.
When Circuit City was on the verge of liquidation, Jim Ristow, executive director of Home Entertainment Source, spun it into a positive for his specialty electronics buying group members.
"It's billions of dollars of consumer business that has to go somewhere," he said.
Unfortunately for the specialty electronics industry, 66 percent of Circuit City customers will take their business to Best Buy or Walmart, according to the NPD Group.
In a recent survey of Circuit City customers, 55 percent say their future electronics purchases will be from Best Buy and 11 percent plan to buy at Walmart. The most popular reasons for their choices:
As for the other 34 percent of surveyed Circuit City shoppers, it's not clear if they are specialty candidates either, Baker says. "The only statistically valid findings were Best Buy and Wal-Mart. After that there were a bunch of stores named but not in sufficient quantity."
Baker doesn't think specialty dealers going after former Circuit City customers will have a lot of return on investment (ROI).
"You have to be proactive. Get in front of people. Circuit City was a big-box store with big-box products, but it also had big-box advertising. For [CE Pro] readers, that's difficult," Baker says.
"They don't have many locations. They don't do advertising like that. Circuit City customers are mostly transactional. Customers for CE pros are more solution-oriented. Even if there is a piece of that [former Circuit City customer business] out there that’s available to [specialty dealers], the sweet spot isn’t large."
"It's billions of dollars of consumer business that has to go somewhere," he said.
Unfortunately for the specialty electronics industry, 66 percent of Circuit City customers will take their business to Best Buy or Walmart, according to the NPD Group.
In a recent survey of Circuit City customers, 55 percent say their future electronics purchases will be from Best Buy and 11 percent plan to buy at Walmart. The most popular reasons for their choices:
- Price (40 percent)
- Product selection (29 percent)
- Store location (22 percent)
As for the other 34 percent of surveyed Circuit City shoppers, it's not clear if they are specialty candidates either, Baker says. "The only statistically valid findings were Best Buy and Wal-Mart. After that there were a bunch of stores named but not in sufficient quantity."
Baker doesn't think specialty dealers going after former Circuit City customers will have a lot of return on investment (ROI).
"You have to be proactive. Get in front of people. Circuit City was a big-box store with big-box products, but it also had big-box advertising. For [CE Pro] readers, that's difficult," Baker says.
"They don't have many locations. They don't do advertising like that. Circuit City customers are mostly transactional. Customers for CE pros are more solution-oriented. Even if there is a piece of that [former Circuit City customer business] out there that’s available to [specialty dealers], the sweet spot isn’t large."
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About the Author
Tom LeBlanc, Senior Writer/Technology Editor, CE Pro
Tom has been covering consumer electronics for six years. Before that, he wrote for the sports department of the Boston Herald. Migrating to magazines, he was a staff editor for a golf publication and an outdoor sports publication. Now, as senior writer/technology editor of CE Pro magazine since 2003, he dabbles in all departments and offers expertise in marketing.
1 Comments
Page 1 of 1 comment pages
This is not surprising. I think that any specialty retailer that thought they would see a real gain from CC going away was dreaming. These are big box store customers and have a different mind set then those who would shop a specialty dealer. Not to mention that the specialty retail customer is on the decline. In a market filled with Ipods and MP3 players customers are less and less interested in the mid or high end audio video . Even companies like Best Buy are having a difficult time with their Magnolia brand. Tweeter tried to convert these customers and couldn’t. Sad to say I feel that the specialty retailers are in for even more lean, hard times.