Transformers Getting From Bricks To Clicks

No one has figured out how to make a modem spit out a camcorder or a big-screen TV for on-line shoppers who need instant gratification. Until some physicist does, Circuit City Stores Inc.’s Alan McCollough thinks he’s found the next best thing: building real-time links between its Web site and its brick-and-mortar stores.

A customer can shop on-line for a camcorder, check whether a model is in stock at up to three nearby stores, reserve it at one of them and pay for it on-line. She can then hop in her car, drive to the store and pick it up at the front desk – and do it all, McCollough likes to boast, within a lunch hour. “It’s a seamless transaction for the customer,” says McCollough, president and CEO of the US$12.6 billion consumer electronics chain. also lets customers shop the old-fashioned Web way – that is, order products on-line and have them shipped directly to their homes from a Circuit City distribution centre. (Previously, the company’s Web site had no on-line shopping capability at all.) But more than half of on-line customers choose to pick up their purchases in a store rather than wait for them to be shipped. That doesn’t surprise McCollough: “If you decide you’re going to give us $1,000 for a new digital camcorder, how long do you want to wait before you start playing with it?”

While much lip service has been paid to the benefits of integrating clicks and bricks, Circuit City is one of the rare companies that actually allows customers to order on-line and pick up at a store. The company has a bit of a technology edge, McCollough says – a few years earlier, it rolled out a homegrown point-of-sale (POS) system that could track inventory by SKU and by store in real-time. By contrast, most retail POS systems update inventory levels only once a day. Since the company already knew where the inventory was at any given minute, its biggest challenge on-line was linking the Web site with the POS system.

The revamped launched in July 1999 and now offers more than 2,000 products. The company’s execution of a true click-and-mortar strategy will no doubt make customers feel more comfortable about buying on-line, according to one analyst. “There’s a lot of uncertainty about buying over the Web,” says Tim Washer, vice-president of NFO Interactive’s media and telecom practice in Greenwich, Conn. “This reduces that uncertainty.”

Although Web sales are still only a very modest slice of Circuit City’s revenues, McCollough says, the company is happy with its investment: “We believe it’s our obligation to sell however the customer wants to buy.”