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Why did Best Buy survive buy Circuit City went under? They were basically the same thing, so what did they do differently?
Circuit City's management made several consecutive catastrophic fuckups which ultimately led to the company's demise. The most widely publicized one was firing all of their experienced staff and attempting to backfill all of those positions with minimum wage newbies. This obviously backfired spectacularly.
They also dropped a stable, profitable high-margin product category (appliances) to focus on an unstable, low-margin category instead (TV's and personal electronics).
They also invested heavily into selling loads of televisions. They stocked up on TVs for the holiday season using purchase orders (basically using an IOU to pay back later), but when they were stuck with all thier unsold stock they folded since they couldn't pay those bills.
Oh and Best Buy owes its survival to investing heavily into cell phone plans and contracts. They would've folded without it.
Even now they get lots of company kickbacks from Sony, Samsung, Apple, Sonos, etc to be a showroom for stuff.
Oh and Best Buy owes its survival to investing heavily into cell phone plans and contracts. They would've folded without it.
Radio Shack limped along for maybe a decade after their core business stopped making sense, because of their cell phone deals. This Onion article from 2007 captures the cultural place that RadioShack operated in at the time, and they didn't file bankruptcy until 2015 (and then reorganized and filed bankruptcy again in 2017).
Worked there in the mid '00s and oh my God did they never shut the fuck up about selling those same 5 phones and plans ugh.
I wanted to work in an OG RadioShack not a shack with shitty radios.
Especially Samsung, and especially Samsung appliances.
Samsung's appliance division would probably be completely dead to consumers by now if it weren't for the fact that they bribe Best Buy to put their stuff front and center in the showroom.
Circuit City blew all their money trying to create a disposable DVD called Divx. It was intended to replace video rental stores.
Oh that was wild too, those color changing DVDs.
You are probably referring to FlexPlay, a completely different implementation of the same basic idea.
Might be. I remember them being marketed as "no return rentals"
Yeah. The DIVX discs mentioned here need a special player
I think it's a Highlander scenario, there can only be one.
As someone that shopped at both, but preferred Circuit City, I think Best Buy initially did a better job of "wowing" customers and had a better store layout. They also were better at trying to squeeze money out of people and thus were more profitable than Circuit City, so when times got leaner they survived and then had the whole market.