Q: In the absence of any offline marketing support — no print, no TV, no event sponsorship, no direct mail, no new products, nothing outside of activity in the digital space — can a struggling or dead brand be brought back to life? With all the communication pros piling on social media, it begs the question, especially for those of us in the brand-revitalization arena who are charged with finding the right media vehicles to turn a brand around.

A: Actually, we can see a few that are trying, including the online-only Circuit City. In addition, there is the British online version of Woolworth’s. Anderson-Little is also being launched online. And numerous print publications are going online. We also know of some local small stores that have shut down, and only exist as small online shops.

This is smart. Please read our old on the issue from January, 2009, entitled Valuation of Circuit City’s Web Operation. Circuit City was a top 100 site, and the intellectual property was worth a lot.

The agreement has been submitted for approval to the Bankruptcy Court for the Eastern District of Virginia, Richmond, Division. On November 10, 2008, Circuit City Stores, Inc. filed a petition for reorganization under federal bankruptcy laws. Completion of Systemax’s proposed acquisition of the assets is subject to both approval by the Bankruptcy Court as well as the auction process, and it will not be completed if a higher or better bid for the assets is submitted and approved by the court.

About Systemax Inc.

Systemax Inc. (http://www.systemax.com) sells personal computers, computer supplies, consumer electronics and industrial products through a system of branded ecommerce web sites, direct mail catalogs, relationship marketers and retail stores in North America and Europe.

RICHMOND – So Circuit City is in trouble, and the press is reporting that the company has days to either be purchased, or liquidated. We can’t predict what will happen. All we know is that we went into the Sarasota store today, and there were customers.

That might show where the value lies. Busiest places?

• The cellphone kiosk, with three staffers talking a handful of customers
• The Ipod accessories area
• The Firedog area, where folks were lined up waiting for computer help

The question becomes. What if Circuit City could keep those businesses if most of the rest of the company disappeared. Is that possible? Is that practical?

We raise a second question. We were looking at the Quantcast stats for the top 100 websites. And lo, between Typepad, and below FoxNews.com, is Circuit City. CircuitCity.com draws more Internet users than LinkedIn. Amazing.

Certainly, the retail operation feeds the online operation, but we bet that many people who shop online at Circuit City do not intend to go into the store. An astounding 9.4 million uniques a month. Wow.

Here are the top Internet sites, from 75 to 96:

• 75 foxnews.com 11M+ U.S. monthly people. The site is popular among a fairly wealthy, more educated, slightly more male than female, skewing older audience.
• 76 people.com 11M+ U.S. monthly people. The site caters to a more affluent, slightly female slanted crowd.
• 77 nih.gov 10M+ U.S. monthly people. The site appeals to a more educated, skewing older, somewhat female audience.
• 78 reuters.com 10M+ U.S. monthly people. The site attracts a heavily male, more affluent, more educated, skewing older following.
• 79 smarter.com 10M+ U.S. monthly people. The site caters to a slightly more female than male, 50+ audience.
• 80 wunderground.com 10M+ U.S. monthly people. The site attracts a skewing older, more affluent, slightly male slanted, mostly Caucasian, more educated crowd.
• 81 wikimedia.org 10M+ U.S. monthly people. The site caters to a slightly more male than female, teen, more educated audience.
• 82 nbc.com 10M+ U.S. monthly people. The site caters to a adult, more female audience.
• 83 ezinearticles.com 10M+ U.S. monthly people.
• 84 kmart.com 10M+ U.S. monthly people. The site caters to a more female crowd.
• 85 barackobama.com 10.0M+ U.S. monthly people. The site appeals to a more African American, fairly wealthy, skewing older, more educated, somewhat female crowd.
• 86 vzw.com 9.9M+ U.S. monthly people. The site appeals to a fairly wealthy, slightly female slanted, youthful audience.
• 87 symantec.com 10M+ U.S. monthly people. The site caters to a skewing older crowd.
• 88 att.net 8.8M+ U.S. monthly people. The site is popular among a very slightly female biased, skewing older audience.
• 89 rockyou.com 9.8M+ U.S. monthly people. The site is popular among a mostly female, teen following.
• 90 sun.com 9.8M+ U.S. monthly people.
• 91 findstuff.com 9.7M+ U.S. monthly people. The site caters to a slightly female slanted audience.
• 92 kohls.com 9.7M+ U.S. monthly people. The site caters to a more affluent, mostly female audience.
• 93 netflix.com 10M+ U.S. monthly people. The site caters to a adult, very slightly female biased, more educated audience.
• 94 typepad.com 9.6M+ U.S. monthly people. The site caters to a more educated, more affluent audience.
• 95 circuitcity.com 9.4M+ U.S. monthly people. The site attracts a adult audience.
• 96 linkedin.com 9.3M+ U.S. monthly people. The site caters to a very slightly male biased, middle aged, more affluent, more educated following.

As a child and as a devotee of brands, I shared a love (and frustration) with the Radio Shack (NYSE: RSH) of the 1960s, 70s and 80s. (Great history is at www.antiqueradio.com) On the plus side, it had everything I ever wanted. I would count days until the arrival of their yearly catalog, and pour over their various antennae, phones, connectors, kits, toys and electronics. From Radio Shack, I weaned my parents from their old lease relationship with a Bell System telephone; Radio Shack sold Canadian telephones from Northern Telecom, I think. Their Archer antennae, Realistic speakers and audio components and Optimus speakers spoke to me, in the geekiest sort of way. In each product category, Radio Shack had a branded product of its own, often an exact copy of another product on the market. If it sold branded electronics, it would be merely a dealer. They did stuff that was cool.

The company also had a messianic spirit about it; I particularly appreciated their electronics kits, which were actually a number of different diodes, switches, light bulbs, solar panels, buzzers and such on a flat board, each part connecting to two springs. The kit came with all sorts of diagrams. By changing the wires, a kid could learn how to build basic circuits and electronic components. Wire it one way, and you have a buzzer system; another, and you have a radio. It taught me the basics of electronics; who knows how many boys were persuaded to go into electrical engineering careers because of it. As I look back on it, I can appreciate how the company was committed to learning; ultimately it made me respect Radio Shack as a competent and only sometimes glamorous supplier of all things electronic.

Rural folks had Archer antannae

One part of the Radio Shack experience bugged me, at least then. It was their use of store brands. You might remember the brands; which were not only specific products but specific types of products. Archer went on antennae tuners; throughout the rural south the name sat on top of TVs. Realistic on audio components. Optimus on speakers. Then there were the individual products like the Weatheradio, which was a cool little fake wood-grained box with an antenna sticking out the top. It only received National Weather Service forecasts, which could be had by pressing the little white bar on the top with a click. Every boat person had one on their boat or in their piney paneled dens; in a simple way it asked the question we all ask; what’s the weather today and tomorrow? The most genius product? It would have to be the Radio Shack Flavoradio, which was a simple transistor radio that came in tasty colors; we think it was the inspiration for the iMac. (See Phil MacArthur’s excellent article in www.antiqueradio.com.)

I digress into this because I strongly believed then that it was silly for Radio Shack to have its own brands when I could see that they were just exact duplicates of other items I saw in other stores. In my 70s pre-teen mind, I found the company sort of corny and old fashioned, and wondered why the cool brands that I craved – then Koss, Pioneer, Hallicrafters, AIWA and Sansui (particularly AIWA reel to reels) – were not sold at Radio Shack. How cool Radio Shack would have been if it had just stocked all of that! Like Kmart (then ONLY store brands), Murphy’ s Mart and Howard Johnson (why, HoJo cola?) which only sold its own brands back in the 70s, it was limiting itself.

Looking back on it, Radio Shack seems all the more wiser, and I didn’t realize how brilliant the differentiated products were. For in gathering up all these electronics under its own brand name, and creating its own products, it created its own brand mystique. And Radio Shack’s consistent pricing, catalogs and well stocked stores ensured that almost always I turned to Radio Shack, as did the rest of the nation.

Time Heals Bad Brands

This could have been good brand strategy by Radio Shack. It could have also been time and a stick-to-it-ive luck that made it work. For there is a rule with brands; it is the “Time Heals All Bad Brands.” It means this—if a company delivers a good product over and over again with a brand name that doesn’t work properly or is not well executed with graphics and such—it can still work as a brand and gain traction in spite of the poor execution of the graphics, packaging, advertising and marketing.

Sadly, Radio Shack tampered with a goofy formula.

Today, at Radio Shack, the brands are all diminished. The store and website is now are cluttered with Onkyo, RCA and Sony. Not a big loss for civilization, I suppose. But I don’t think Radio Shack gained anything by diminishing the Realistic brand in favor of Radio Shack.

They negated 30 years of their own, odd brand premise by diminishing the old names and now the weird practice that I have finally gotten used to has now disappeared. And they appear just like anybody else. In fact, because the stores were so small, they just look like diminished superstores, not audio boutiques.

That being said, their stock (NYSE: RSH) was at $19 at presstime, off from $35 in 2004 and $72 in 1999. That’s not too good, but compared to some others, it means that the company has life. And with clever management, it has room to grow again, with its advantages in location convenience (small stores in strip centers) and technology changes in television, radio and electronics that require store traffic. Profits are up, in a horrid time.

That’s really good news. Realistic good news.

Read our other posts on Radio Shack:

• Radio Shack’s Invention Lab: A Great American Invention
• The Solution for Radio Shack’s Problems
• 100 Brands to Bring Back
]]> http://www.brandlandusa.com/2008/09/12/the-soul-of-radio-shack-was-flavoradio/feed/ 5 http://www.brandlandusa.com/2008/09/07/ten-ways-to-fix-circuit-city/ http://www.brandlandusa.com/2008/09/07/ten-ways-to-fix-circuit-city/#comments Sun, 07 Sep 2008 20:52:46 +0000 Garland Pollard http://www.brandlandusa.com/2008/09/07/ten-ways-to-fix-circuit-city/ I was talking to a lower-level Circuit City exec in Richmond, Virginia, around 2001-02. He had just left the company. He shall remain nameless, mostly because I can’t remember his name! Wait, back on subject. So I am chatting with this fellow, and ask about the Alan McCullough era at the retailer (both are gone [...]]]> I was talking to a lower-level Circuit City exec in Richmond, Virginia, around 2001-02. He had just left the company. He shall remain nameless, mostly because I can’t remember his name! Wait, back on subject.

So I am chatting with this fellow, and ask about the Alan McCullough era at the retailer (both are gone now). His words were “all the wrong people got promoted.” This was an awful time at the electronics retailer. A staffer had committed suicide by jumping off a balcony, and the company was furious at our newspaper, Inside Business, for running the story. In addition, we were running story after story about problems with the company, and its stock price. (Then it was worth something.)

Growing up in Virginia, we all knew a different Circuit City. It was Ward’s Loading Dock, and it sold electronics cheap. That was it. The stores were ugly as crap, and located in all the wrong places. Salespeople were commission. Sunday supplements didn’t think about branding or service, only price. And the sale.

Management  around the year 2000 didn’t get what was wrong. One day it was selling CDs and DVDs, the next it WASN’T selling appliances. Stores were redesigned. Signage was changed. The mention of the store in the Collins book Good to Great went to their heads, and what a fall it has been. There is new management at the company, but it is stumbling too. The reason? They have lost sight of what made them. Sales.

So what to do for the new James Marcum (he’s the latest to try to turn it around)? A list of ten suggestions from a person who has observed the company for the last 30 years:

1. Push loss leaders. Emphasize a minimum number of loss leaders in every category, with hand-written signs. These prices would be dominant at the stores, so you could not miss them. Like IKEA, (it has “impossible” prices) the pricing strategy of Circuit City used to be all about one low priced item in every category. In the 1980s, there was an impossibly priced AM/FM receiver, a VERY cheap television, a very cheap refrigerator and the like in every product category. The idea was not revolutionary. The person goes in with the loss leader as the lure. They get there, and realize that spending $30 more for something TOTALLY better isn’t a ripoff, and usually spend more.
2. Emphasize “crack” products. In the store’s heyday, they sold products that would lead you to buy more. A stereo system could start with a receiver, and then you would add on pieces. While that model doesn’t work with today’s one-piece stereo systems, it does work with things like the iPod. So if you get them to buy an iPod, you show them the multiple things they need after they buy it. They sell some of this stuff, but it isn’t laid out well.
3. Stop all branding and marketing. Ditch the Second Life and Sports fan channel on YouTube. Ditch any ad that is not a direct call to action and price driven. It was price that brought people in. Do you hear us. PRICE. Branding is for mature companies that are not in a fight for their lives. And stop mining customers for too much consumer data. If it sells, sell more. If it doesn’t, move another product up to the front and put it on sale. Allow your store managers to organize merchandise. Is there still a Plan-a-gram department? If so, send them out to the stores to help managers do it themselves.
4. Stop the pushy sales folks. It creeps people out. We recall going to a store fairly recently, and the goofus who was trying to sell us something followed us around. It was desperate, and it came after the commissioned folks were sent bye-bye (though some might have returned). In the old days, the commission folks were a little eager, yes, but they weren’t desperate. But if you are going to stick with the pushy geeks, please allow them to haggle over prices. It’s no fun to have pushy salespeople unless they can really cut you a deal.
5. Middle market. Middle market. Middle market. Circuit City didn’t always have snazzy brands. It was low to middle market, and was filled with receivers and such made by Superscope, Garrard, Technics and Sharp. Audiophiles were NOT amused. But it didn’t matter. It turned the middle market into stereophiles.
6. Quit the CDs, DVDs and such, except a few by the door in displays. You will never compete with Borders and Barnes & Noble. And what the %$#%%$ are they doing selling any magazines, let alone Mad Magazine?If it doesn’t plug, it doesn’t go on the shelf.
7. Sell anything plugged in. Sell appliances, big ones. Sell small appliances and electronics. Sell toasters, and other things you plug in. As I recall, Circuit City was THE place to get a cheap microwave oven, as well as a cheap college fridge. Circuit City was about things that plugged in. If it’s cheap and electric, it will drive foot traffic. These days, appliances are made so cheaply that you have to buy things over and over again.
8. Sell appliances again. No, don’t sell the Sub-Zero (see #5). Sell entry level pricing for cheap ovens, refrigerators, etc. Certainly, the delivery system doesn’t accomodate them very well, but deal with it. Setting up a bargain basement appliance department will allow for new types of foot traffic. Anytime someone moves, they need new appliances. These customers go into the store, see pretty HDTV’s on the wall, and get diverted. Circuit City might lose on the stove, but the customer will spend on the TV.
9. Encourage sub-vendors inside the store. Are there other leased businesses that can operate inside Circuit City? Delivery? Appliance repair? (Microsoft just announced a VISTA store).
10. Take advantage of the new technology. The television switchover is a once-in-a-lifetime opportunity. Don’t miss it. Ditto with HD radio. I would love one, but have never been enticed or sold on it. What would get me in? A low entry price point.
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