Even though Circuit City Stores Inc. delivered disappointing third-quarter financial results, CircuitCity.com is generating record holiday traffic and sales, CEO Phillip Schoonover recently told Wall Street. With solid holiday results, total web sales for CircuitCity.com should top $1 billion in 2006.
In a recent conference call with Wall Street analysts, Circuit City chief financial officer Mike Foss noted that CircuitCity.com established a number of new traffic and sales records for the long Thanksgiving weekend. “On Thanksgiving Day, we set a record for sales on CircuitCity.com with sales growing more than 200% versus a very strong prior year,” Foss says.
In time for the holidays, Circuit City redesigned CircuitCity.com and added a new merchandising approach. ‘We relaunched CircuitCity.com on Nov. 7th and while we made many changes to the site, a major focus area for this new release was on solution selling,” Schoonover says. “We unveiled a new mass test that emphasizes three ways to buy; we added perpetual shopping carts so the customer doesn`t have to navigate through multiple pages to make their purchase; and we enhanced solution offerings, including the addition of FireDog services. Selling the total solution is important to growing average ticket and improving profitability with our web-generated sales.”
In the third quarter, web sales rose by 67%, though Circuit City, No. 17 in the Internet Retailer Top 500 Guide to Retail Web Sites, didn’t break out specific numbers. For Q3, Circuit City posted a net loss of $16 million on revenue of $3.1 billion vs. net income of $10.1 million on sales of $2.9 billion in Q3 2005.
“We now expect that more than half of our fiscal year 2007 web-originated sales to be picked up in stores as the shift to more televisions in online-only products continue,” Foss says. “We continue to expect to generate $1 billion or more in web-originated sales during this fiscal year.”