Retail chain fights the online wave




Three years ago, the large electronics retailer known as CompUSA was sold to a private group who announced they were closing all 103 of their stores. In 2009, Circuit City declared bankruptcy and turned out the lights on over 560 stores nationwide. Then, out of the blue, one company stepped in and bought them both.

That firm – Systemax – is out to prove wrong all of the people who said that retail tech stores were dinosaurs, soon to be replaced by the growing consumer preference for buying online. So far, Systemax is getting the last laugh.

In their last quarterly report, Systemax reported 14% growth in total sales on a record $862 million in U.S. dollars. Make no mistake about it: both CompUSA and Circuit City would have been breaking out the caviar and champagne if they had seen quarterly growth rates anything close to that when they finally went under.

Asked by this columnist whether “brick and mortar” electronics retailing is headed for the graveyard, Systemax,’s CEO of their Technology Group, Gilbert Fiorentino, stares at his questioner for a moment then actually growls. “There will always be a place for retail stores,” he says with a certainty that leaves no room for doubt.

“Both CompUSA and Circuit City didn’t have an identity,” explains Fiorentino. He’s set out to change that by retooling the in-store shopping experience through what he calls “Retail 2.0.”

If you go to a CompUSA store today, the experience is now different. In front of each TV on sale is a keyboard that allows a shopper to check for product reviews, get information from the TV’s user manual, and even check competing prices via the Web. And the benefits work both ways. Not only does the shopper get information about what they are interested in buying, Systemax can also track which products are getting the most attention too. That’s valuable knowledge in the competitive and fast moving world of consumer electronics.

The store’s floor staff are fully commissioned, another interesting difference from some of their larger competitors. “We want our sales associates motivated to be out on the floor meeting customers, not sitting in the store break room yacking about last weekend’s ballgame,” says one company official.

Amid signs that Wall Street is starting to take more of an interest in what Systemax is doing, the company has been moving cautiously. They tested their Retail 2.0 marketing concepts in Florida, and have been slowly reopening CompUSA stores in large cities like Houston and Chicago. If you want to see a Systemax-branded store in action in the Bay Area, forget it. There aren’t any yet in California, and company officials flatly refuse to comment on any expansion plans for the largest state.

Their caution is probably with good reason. Despite Systemax’s recent success in acquiring two failed chains and generating respectable sales, they know they are up against the biggest of the “big box” retailers in WalMart and Best Buy, plus the ever-present attraction of online shopping. Whether you shop with your fingers or your feet, it remains to be seen if Systemax’s efforts to combine both will keep you coming back for more.