Walter Watts
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The Gutting of CompUSA
« on: 2007-03-08 16:33:37 » |
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The New York Times
March 8, 2007, 12:10 pm
by David Pogue
The Gutting of CompUSA
Did you hear? In the next couple of months, CompUSA will be closing over half of its 225 stores.
You can find a list of the doomed stores here, if you’re interested.
But something tells me that if anyone were actually interested, those stores wouldn’t be closing.
This may sound a little harsh–but frankly, I’ve never quite understood how CompUSA stayed in business to begin with. Most of the stores I’ve visited have been sterile and soulless, and pervaded by a feeling of abandonment. You’d think a gearhead like me would get all excited to be there, but for some reason, I just can’t wait to get out.
Here’s the official reason the chain is shuttering 128 stores, as it appears in a statement by Roman Ross, CompUSA’s CEO: “Based on changing conditions in the consumer retail electronics markets, the company identified the need to close and sell stores with low performance or nonstrategic, old store layouts and locations faced with market saturation.”
Well, whatever.
I think the real culprit behind the gutting of CompUSA is Internet pricing. You can order computers, accessories and electronics from the Web for a fraction of CompUSA’s in-store prices–and evidently, most people are doing exactly that. (It’s not just CompUSA, by the way. Circuit City is closing 70 stores, too. And don’t forget the 30-year-old Good Guys chain–46 electronics stores in California–which CompUSA bought in 2003 and then closed in 2005.)
Even among retail shops, though, I’ve found CompUSA to be overpriced. One day last year, I stopped in to a CompUSA to buy an Ethernet cable; the least expensive one they had was $25. I found a $6 cable next door–at a Home Depot.
But what about the old argument that local shops offer hand-holding, friendly advice and personal service?
Well, there may be CompUSA employees who provide all that. But I haven’t met many of them.
In 1999, I wrote an article about CompUSA for a computer magazine. I visited CompUSA stores in five states, posing as a computer novice and asking questions. I tallied up some of the ridiculously misinformed remarks made by the CompUSA sales staff. My favorite: “That computer doesn’t have a level cache.” (I believe he meant a Level 2 cache, but what the heck–maybe the thing really was a little tilted.)
The company’s corporate spokesperson at the time acknowledged, “Getting staff is a problem across the board. We need specialized talent; finding it can be a challenge.”
Between her lines, you could read the truth: technology experts are in demand everywhere. At $6.50 an hour (what CompUSA was paying at the time), you’re not going to attract many people who, ahem, excel in both personal and technical skills.
It’s really a shame that CompUSA managed to fritter away its ubiquity and name-brand advantages. Despite the Internet’s price pressure, there’s a crying need for local computer stores; the average person’s sense of technological helplessness is growing these days, not shrinking.
Besides, Internet or no, it’s not impossible to create a successful computer chain. I’ve never been to a Fry’s computer store–it’s a regional chain with no stores in my region–but it has armies of loyal fans.
Maybe a corporate analyst can say what’s wrong with CompUSA’s business model from a spreadsheet standpoint. But it shouldn’t take an MBA to spot the greater problems; just checking out these forlorn warehouses and sullen salespeople ought to make the problems perfectly clear.
Even now, as over half of the stores prepare to shut down, CompUSA misses an opportunity to be customer-friendly. Its final offer isn’t much of a fire sale: 10 percent off everything in the shuttered store–and no returns.
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