August 27, 2001, 12:00 AM

Forrester analyzes the new Circuit City/Amazon deal

Forrester Research says the new deal struck last week between Amazon.com and Circuit City stores could hurt Amazon`s own online customer experience.

Cambridge, MA-based Forrester Research Inc. already is predicting the impact of Amazon.com’s new deal to distribute electronics through Circuit City stores. The firm says that Circuit City “wins big” because Amazon will serve as an inexpensive customer acquisition tactic. In addition, Circuit City will have an opportunity to increase sales as consumers who choose in-store pick up for electronics may buy impulse items while at the electronics store.

However, Forrester believes Amazon may be getting the short end of the stick because, unlike the Toys R Us deal, the Circuit City deal does not go far enough to get Amazon out of a money-losing business. The firm says that Amazon may be jeopardizing its great customer experience by selling Circuit City consumer electronics side by side with different pricing and product assortments, noting that it "will confuse and even anger consumers."

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