A nice post-mortem on Circuit City
Joel Spolsky writes excellent software and also writes excellent essays on the computer world and business in general. His blog:
Joel on Software is not to be missed.
Here is his take on
the Circuit City meltdown:
Why Circuit City Failed, and Why B&H Thrives
Many companies that have gone bust didn't die because of the recession. They failed for one reason: They treated customers poorly
When Circuit City went kaput in January, I didn't waste my time on the chain's so-called going-out-of-business sale. First of all, Circuit City never had anything good in stock, even before it decided to go out of business. A year ago, I looked at the retailer's entire selection of laptops, and all I found were these huge, ugly, shiny things festooned with garish stickers announcing that they had "Intel Inside" and were "Vista Adequate" and "Y2K Ready." Also, I had read on the Consumer Reports website that Circuit City's liquidator had actually raised the price on many items for the going-out-of-business "sale."
Truth be told, I don't think I ever bought anything from Circuit City anyway. On weekends, I would occasionally wander into the local branch, attracted like a moth to the bright wall of plasma TVs. When I actually needed a new TV, however, I found the Circuit City salesperson to be so aggressively unknowledgeable and remarkably useless that I fled to Best Buy, where I was helped by a cheerful, 20-year-old twerp who knew everything. I later learned that in 2007, Circuit City had fired the chain's 3,400 most experienced salespeople and replaced them with generic, untrained, near-minimum-wage workers.
So it was no surprise to me that Circuit City failed. The chain's CEO, in an e-mail, blamed the demise on "poor macroeconomic conditions" -- an assertion that was repeated by The Associated Press, which cited "the expanding financial crisis" for the liquidation.
You know what? I don't buy the argument that the economy caused Circuit City's failure. Take one look at its competitors, and you know that the market for consumer electronics and computer equipment remains strong, even in this economy. You can walk into any Apple Store and see large crowds of people lining up to buy computers and iPods. But enough has been said about how wonderful Apple is. I want to tell you about another first-class consumer electronics retailer -- a much smaller business you probably haven't been to, unless you live in New York City or are a professional photographer or an avid hobbyist. It's called B&H.
B&H opened in 1973, and it's an amazing place. If you are in Manhattan, you should visit the store, on Ninth Avenue at 34th Street. The first thing you will notice? The place is humming. Originally a camera store, B&H has grown to carry more than 250,000 items, including all kinds of pro audio, pro video, and computer gear. The company is closely held and somewhat press shy, so it's hard to know how successful it is. "Our business remains strong, particularly considering the overall economic climate," a spokesperson says. I suspect that's an understatement. The store is always packed with customers, browsing through hundreds of varieties of camera bags with every possible combination of lens compartments; the room full of telescopes; and, of course, enough lenses to burn all the ants in the Sahara to a crisp. The electronic superstores in Tokyo's Akihabara district are the only other places where I have seen so much gear under one roof.
I have never had the pleasure of visiting B&H but have dealt with them online many times and every single transaction was flawless.
There is a business in Bellingham called
Hardware Sales that operates on the same pattern. The place has been around since 1962(they started out selling logging and mining supplies and dynamite) and have morphed into a general hardware, tool rental, office furniture and high-end home decorating supply (kitchen and bath cabinets and lighting primarily). The owner, Alta McClellan is 93 and still comes into work each day (except for her vacation when she spends a week in Vegas).
Joel also touches on one of the wonderful quirky aspects to B&H and closes with these two wonderful paragraphs:
But wait: The conveyer belts, the prices, the smart salespeople, the fact that they recommend cheaper products almost as a rule -- none of these is actually the most amazing thing about B&H. Really, the most amazing thing is that because the owners of B&H are Orthodox Jews -- Hasidim, in fact -- the store closes every Friday afternoon for the Jewish Sabbath, and on Jewish holidays. Moreover, B&H's website, which reportedly accounts for 70 percent of sales, shuts down, too. Bhphotovideo.com is, to my knowledge, the only major online retailer that closes for 25 hours every weekend.
Even as competitors like Circuit City go bust, B&H remains packed with loyal customers. And that makes me very happy. For a business owner, there's nothing more satisfying than watching honest dealers expand their operations while the schmucks, with their going-out-of-business markups, go down the drain. It's inspiring to know that starting with the premise of treating your customers well really does pay off.
The standard nickname for B&H is Beard and Hats due to the Hasidic dress.
Like I said, wonderful place to shop.
Posted by DaveH at May 5, 2009 9:54 PM
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