Circuit City CEO: Retailers must better weave channels

Many multi-channel retailers look at sales channels as separate entities that require separate strategic plans. To gain market share and more successfully operate as a business in the years ahead, retailers must learn to better integrate their sales channels, says Philip Schoonover, chairman, president and CEO of Circuit City Stores Inc.

Planning for the year ahead and beyond, Schoonover has been crafting a strategy that places the web at the center of Circuit City’s success with an aggressive policy that guarantees fast pick-up for merchandise ordered online and an investment in new technology that replicates the online shopping experience in stores. “Retailers that continue to treat sales channels separately and don’t look at shopping from the customer’s point of view will lose,” Schoonover says.

When it comes to having a presence in more than one sales channel, Circuit City, No. 17 in the Internet Retailer Top 500 Guide to Retail Web Sites, has conducted business in multiple channels for years. However, the company is in the midst of making significant changes to bring it in line with Schoonover’s forecast of the need to better integrate channels to perfect the overall shopping experience.

Circuit City, for instance, is guaranteeing that in-stock items ordered online will be available for pick-up in a store within 24 minutes of when the customer places the order. It also has launched a test program that enables sales associates and shoppers in 10 stores in Boston and 10 in Florida to use wireless tablet PCs to study product specifications and compare products and prices as they walk through a store. “We’re creating a new kind of in-store experience, bringing the power of web content into stores,” Schoonover says. “Customers can study the specs online while simultaneously touching products in a store.”

The merchant also has been changing its entire business structure to break down barriers between channels by investing in new or more call centers, catalogs and web-selling technologies and changing the psychology of the company and its employees. Its chairman adds that the retailer is far from done with its efforts to better weave together sales channels to best satisfy the wishes and needs of customers.

“Executives must force this mindset throughout their organizations and remove obstacles constraining this strategy,” Schoonover says. “Re-examine compensation, look at company structure, identify and promote employees that understand and advance the philosophy and hold them up as a new generation of leaders, and dig in and change the mechanics of the company.”