PORT WASHINGTON, NEW YORK, FEBRUARY 26, 2009 – After 60 years in business, Circuit City is winding down its business for good. It was an announcement that was somewhat expected, but nonetheless one that will change the consumer technology retail landscape. Billions of dollars in sales are up for grabs as Circuit City liquidates, and retailers and manufacturers are preparing to spend maximum effort to capture more than their fair share.
According to an NPD report, Consumers React to an Evolving Technology Retail Landscape without Circuit City, the big winners will be the two retailers which have already been reaping the lion’s share of the benefit as Circuit City has faltered. Approximately 55 percent of consumers who have purchased technology products at Circuit City say that Best Buy is where they will shop when Circuit City closes. Walmart was a Circuit City alternative for 11 percent of consumers. Price, product selection, and store location convenience were cited as the top three reasons for choosing the replacement store at 40 percent, 29 percent, and 22 percent, respectively.
“The loss of Circuit City eliminates a shopping option for consumers, a selling option for manufacturers, and a merchandising option away from both,” said Stephen Baker, vice president of industry analysis at NPD. “As we have seen in recent weeks, with announcements like Microsoft’s decision to open retail stores, manufacturers will need to become savvier about how they go to market in the future as volume could potentially concentrate in the two largest retailers. However, consumers’ criteria for replacing their Circuit City experience suggests that while the retailing strengths of Best Buy and Walmart may make it difficult to keep consumers from turning to those retailers, there are other retailers and channels that can compete with those two on the basis of price, selection, and location, or some combination thereof. ”
For more information on the Consumers React to an Evolving Technology Retail Landscape without Circuit City report, contact NPD
1-866-444-1411 or contactnpd@npd.com
For more insight into Circuit City’s closing and how it will impact the industry, check out http://www.npdgroupblog.com/2009/01/a-death-in-the-family/.
Methodology
This survey was conducted from November 14-17, 2008 among 583 consumers from NPD’s online panel who were pre-identified as recent Circuit City buyers.
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