About three months ago, Loretta Alkalay, a retired Florida resident, wanted to get a new HDTV. So she decided to give the CompUSA near her home a try.
Yes, CompUSA. The once-bankrupt electronics retailer is making a comeback, with about 30 new CompUSA stores nationwide and a new strategy that includes aggressive prices, remodeled stores, improved lighting and in-store web access for comparison shopping.
"We have invented this idea of retail 2.0," says Gilbert Fiorentino, chief executive of the Technology Products Group at Systemax, now parent company of CompUSA. Fiorentino is also the founder of Tiger Direct, a web only electronics retailer and another subsidiary of Systemax. "Every screen in every CompUSA store is now connected to the internet and making buying a richer experience for customers," he says.
It was price that brought Alkalay the store. She wound up buying a 32-inch flat panel TV for $200 -- a real steal, she says.
"I had never heard of the brand. But given the price and size, I thought this is a great bargain," says Alkalay.
Once part of the big three electronics retail stores in the country, CompUSA filed for bankruptcy two years ago. It was not alone: High overheads and the inability to compete with low online prices forced companies such as Circuit City and Ritz Camera into bankruptcy, too. Meanwhile, online players such as Amazon, Buy.com and NewEgg have been growing.
But after a reorganization and a buyout in January last year by Systemax, a major electronics retailer, CompUSA is back in business.
The in-store web access may be the biggest gamble, since it raises the possibility that you might use a CompUSA floor model to find a better deal on Amazon.com for the very computer you're using to get that information.
Say you are in a CompUSA store trying to decide if that big plasma TV is the one you want. Just tap the keyboard in front of the screen and go online to check out the specs and reviews an even the recommended mounting brackets. There's also custom information for that particular store, such as how many are in stock.
"We do the same thing with laptops, desktops and monitors," says Fiorentino. "We are using tech to change the retail experience for the customer and giving them access to all the information on the internet anytime they want during the buying process." And there are no restrictions. Users can surf the internet, check their Facebook or even Twitter if they want, says Fiorentino.
It may sound like a small change but it is quite different from how Best Buy, Office Depot or other brick-and-mortar stores display information to their customers, says Doug Fleener, president of retail consulting firm Dynamic Experiences and former director of retail for Bose.
“It’s an untested concept,” says Fleener. “We will have to see if customers like to spend their time gathering information while shopping rather than doing it at home.”
Systemax's Tiger Direct online shopping site has benefited first hand from the online shopping trend. But Fiorentino says customers still want to go stores to buy electronics.
And Fiorentino says CompUSA can keep its prices low despite the additional overhead costs associated with a physical store. CompUSA's inventory now ties into Tiger Direct and the company offers the same prices whether consumers buy a product online or in a store.
Customers such as Robert Oschler, a New York resident who runs a site for robotics enthusiasts, are seeing the difference.
About a month ago Oschler found a CompUSA store near him running offering 48-hour special deals. "They seem to be doing a lot of that," he says. Oschler bought a Novint Falcon gaming mouse for $99 that otherwise retails for $180.
He says he's also noticed the changes in the store’s layout, “They seem more organized,” says Oschler. “Earlier, their aisles used to cluttered, almost supermarket-like, where they wanted to shove as much stuff as possible in your face as you walked by. But now there are more categories and better displays.”
Still, the revived CompUSA is a shadow of its former self. At its peak about three years ago, CompUSA posted about $5 billion a year in sales and had more than 216 stores nationwide. Now it posts a fraction of that in sales and has just about a tenth of its former reach.
If CompUSA can survive through the recession and manage its costs—rent, salaries, inventory--the chain can hope for a future, says Fleener. As other big box retailers disappear, consumers are looking for alternative places to go to and the thrill of walking into a store and looking at products is not easily replaceable for shoppers.
“Stores like Circuit City going out does leave an opportunity in the market,” says Fleener. “With less brick and mortar competition around, people will give CompUSA a chance.”
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