Bweb case study

In the fifty years since Circuit City opened its first store, the company has become one of the best-known sources of consumer electronics in the world. Today Circuit City boasts over 600 stores and more than 50,000 associates. The company consistently strives to offer low, competitive prices, high service standards, and a wide selection of products to meet consumer needs.

Circuit City has long prided itself on the outstanding shopping experience it offers to customers. In the 1990 s the company was early to see the value of the Internet for making that experience even better. However, they shunned the then-popular approach that many bricks-and-mortar retailers were adopting, where online channels were viewed as replacements for or alternatives to the traditional channel. Instead, Circuit City saw the Web as a way to complement its retail outlets and provide customers with more reasons to visit a store. To define, develop, and deploy its web strategy, Circuit City wanted a robust site that would replicate the customer experience in its Superstores while leveraging the advantages of 24-hour Internet access. Detailed product information, comparison capabilities, depth of selection, and immediate inventory information were critical features that the Circuit City web site required.

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Circuit City has competition at local marketstraditional electronic retailers as well as Internet-only players, including catalogers and national distributors. To expand upon its national reputation as a leading high-service, low-price retailer, Circuit City wanted a site that would leverage its national store presence. To do this, the site needed to seamlessly integrate its retail shops with a powerful e-Superstore that could provide quality service online while providing advantages of express pickup from nearby stores. The web strategy would then be tightly interlinked and interdependent with Circuit Citys core retailing business, helping drive more revenue to local stores while maximizing the companys national and international web presence.

Use the Web as a means to improve overall company success
Get into production quickly with novel approach to e-commerce
Provide superior online experience for customers in every respect
In January of 1999 Circuit City commenced development, using Sun Enterprise servers that had just become available from a subsidiary company. To reach the market as quickly as possible with its novel concept, Circuit City determined to base its Internet presence on prepackaged solutions that minimized development time. This led to the choice of BroadVision to provide e-commerce software.

E-commerce application built on Sun Enterprise servers and BroadVision
Sun servers deployed: Sun Enterprise 6500 and 450 servers
Sun StorEdge A1000 and D1000 disk arrays
Solaris 2.7 and 2.8 Operating Environment
Purchasing both servers and storage from a single company helped Circuit City to roll out the new application quickly and with minimal risk. For thorough protection against catastrophe, Circuit City placed identical pairs of systems in two of its geographically separated data centers. For even stronger protection, they engaged Sun service on all four systems at the SunSpectrum Platinum services level. Even though BroadVision s pre-packaged approach was designed to minimize the implementation period, a great deal of development had to be done.

Depth of information: With BroadVisions technology, Circuit City has launched an online shopping resource for product and price comparison.

Fast deployment: Circuit City leveraged BroadVisions modular architecture to rapidly customize and launch its e-commerce site. Full integration with over 500 brick-and-mortar stores took seven months. It included real-time credit authorization, inventory management, and price verification.

Seamless integration: BroadVision linked Circuit Citys site to back-end inventory systems throughout its network of stores, offering Internet shoppers quick notification of product availability, plus convenient purchase and delivery options.

Circuit City has built a powerful and comprehensive web site that augments, complements and supports its traditional bricks and mortar business. By selecting servers and storage from Sun Microsystems, Inc. and BroadVision s e-commerce software, Circuit City was able to bring a state-of-the-art site to market in just seven months. Circuit City met all its project goals.

Circuit Citys e-Superstore, www.circuitcity.com, (click on the link to the left to see a sample of Circuit Citys web page) is set up exactly like a physical store, with the same back-end systems for fulfillment and inventory. The www.circuitcity.com site provides customers with all the benefits of a physical store combined with the convenience of online shopping. In addition to being able to browse, purchase, and arrange for home delivery of products, consumers can also select up to three express pickup locations, automatically check the inventory of these neighborhood stores, and complete a purchase online. As soon as the online transaction is complete, customers can avoid shipping charges and get the product immediately by visiting their selected local Circuit City store. Real-time credit authorization and inventory reservationthe same processes and back-end systems used in physical storesmake this possible. Because Circuit Citys in-store prices are adjusted to compete with local retailers, the e-Superstore automatically adjusts the price if the consumer chooses an express pickup location that is having an in-store special on a selected product. The e-Superstore site also offers side-by-side feature and price comparisons of approximately 1,400 brand-name electronics, major appliances, and personal computers.

The web site www.circuitcity.com consistently delivers reliable performance and strongly challenges that of its competitors. With its hardware scalability, the site was prepared to handle a 2000 holiday buying season with up to twenty times the transaction volume of 1999 s. Most importantly, the site supports the overall business of Circuit City by offering not just an online purchasing option, but also features that boost in-stores sales and improve the over all buying experience for customers.

A successful business web strategy is one that puts a company at an advantage over its competitors, one that focuses on satisfying the needs of the end customer. Such strategy must separate, or disaggregate, the old value proposition that the end customer experienced and enhance it into a new value proposition that would improve, and strongly solidify the relationship between the company and the end customer.
In the highly competitive retail business, Circuit City realized the need to expand upon its favorable reputation. Its electronic business strategy focused on increasing its leverage in the industry by integrating its retail shop with an electronic superstore in a way that it could have an advantage over its competitors. This came in the form of express pickup, which allows the customers to pickup their merchandise from nearby stores. Strategically this approach expands Circuit Citys presence globally while increasing support to its local branches. This e-commerce application enables Circuit City to become more competitive and sustain high yield relationships with customers, suppliers and employees.

Most successful web applications are those that deal in real time terms. Internet technology has lowered the levels of tolerance that customers are willing to engage in dealing with business transactions, especially in highly competitive markets. Circuit City has successfully implemented its b-web applications in a favorable way. The fact that it can interact with and access the inventory of all its local stores in real time allows it to offer more options to its customers, including taking advantage of special offers from local stores even when the purchase is made online.

Most people have stories about their shopping experience, whether it is a trip to the mall, a shopping center, or any other retail outlet. They can tell you about traffic, parking battles, crowds, and the frustration of dealing with sales persons, not to mention long lines at the counter. I t is this shopping experience that Circuit City intended to enhance through its use of the Internet. It was mentioned before how a web implementation had to disaggregate the end customer from its previous experience, and to focus in developing a new and improved relationship with its customers.

Circuit Citys Internet development, and its integration into its core business, brings a new meaning into the word convenience. As an aggregator, Circuit City adds value to the end customer experience by enhancing every aspect of its interaction with customers. A hassle free transaction, or at least one that is minimized, is worth more in todays fast paced and highly competitive business world. Circuit Citys web application allows its customer to shop, compare prices and products, purchase those products, take advantage of special offers, apply for instant credit, and receive customer support over the internet just like a customer would at any local store. This was one of the critical success factors that Circuit City intended to develop, and one, which has been successful in its attempt to stay ahead of the competition.

Another value added feature, the one that Circuit City prides itself for enhancing, and the one that proved to be the most critical and successful was that of fulfillment. While other e-commerce sites offered delivery services as the only way to take possession of purchases, Circuit City wanted its customers to be able to pick up merchandise at a nearby outlet if they wished a unique approach that has since been copied by other firms. In todays business world most customers want their products today whether its for personal use or business purposes. Customers demand choice selection, price information, related product information, easy purchasing options, and most important immediate availability. Circuit Citys web development does precisely that. Www.circuitcity.com is an electronic Superstore, with robust product selection, feature and price comparison capabilities, and inventory links to Circuit Citys nationwide network of stores. The site provides all the advantages of online shopping and convenience while leveraging the local brick-and-mortar stores inventory and value-added services, including installation.

From the customer point of view: When it comes to customer satisfaction, costs can be measured in different ways. One way is to look at the money savings associated with the physical search for a particular product (search costs). Circuit Citys web application eliminates the need for customers to drive to one of their locations when searching or comparing products. This amounts to savings in gasoline money and in the wear and tear of the customers vehicle. Money can also be saved by the fact that customers can take advantage of special or discounted prices on products at local stores, information which is available through its website. Customers will save money by taking advantage of those prices instead of going to a different store. Fulfillment costs such as for shipping and handling are also eliminated through Circuit Citys optional express pickup service, one that is a major part of its strategic web development.
Economically speaking, costs could also be measured as opportunity costs. The time that a customer could potentially save using Circuit Citys website when searching for a particular product, could be used for activities of greater financial rewards. Most important though is the satisfaction payoff that a customer experiences during a successful transaction using Circuit Citys Internet website. The level of satisfaction can lead to repeat customers and to attract potential new customers.

From Circuit Citys point of view: As was mentioned above, customer satisfaction leads to repeat customers and to attract new customers. Circuit City has done this successfully. They realize the importance of customer capital and the financial gains associated with reducing transaction costs. The more savings it provides to its customers, the happier its customers are, and the greater the potential for increased profits due to repeat business.

Other potential cost savings to Circuit City by the customer use of its website, is in the potential reduction of its sales force. If a customer is able to completely perform a shopping transaction, to the point that all he/she has to do is pick up the product at the local store, then the need for sales personnel decreases. Most importantly, the site supports the overall business of Circuit City by offering not just an online purchasing option, but also features that boost in-stores sales and improve the over all buying experience for customers.

Circuit Citys web application has been successful. It experienced increased business flow since it launched in 1999. Despite the substantial effort entailed in this integration, the production site went live just seven months. Customer reaction was so positive that in order to meet demand Circuit City soon replaced the initial configuration. Three factors can definitely be attributed to such success:
Robust Scalability and Extensibility: Circuit City expects and meets heavy traffic of browsers and buyers. BroadVisions scalable and extensible architecture enables Circuit Citys site to have the best performance possible without compromising on rich and customized features and functionality.

Integration with Back-End Systems: One of Circuit Citys key criteria was an
e-commerce platform that could be readily integrated with its Inventory Management System. By integrating its web presence with its brick and mortar business, Circuit City takes e-commerce to the next level.

Advanced Personalization Features: Its software personalization features enable repeat customers to easily access the inventory of Superstores near them. Internet shoppers save their favorite Circuit City locations in their account profiles, and the system automatically checks their pricing and inventory. E-Superstore shoppers can also save items in their shopping carts between visits and receive automatic notification of an orders status.

All the planning that Circuit City put into the web site seems to have paid off. From the strategic plan to its choice of hardware and software, it developed an application as a way to benefit the entire company, not a separate channel like others have done. It has used the web site in many ways to improve the outlets success too. For example, customers can use the sites features to compare different brands of a product type point by point, and then come into a store armed with printed out comparison sheets to actually see the choices and make a final decision.

On the technical side their hardware has the capacity and scalability to meet increasing demand. By just adding processors and memory to their current servers, they are able to handle increasing volume of transactions. Their system projects reliability, built-in redundancy, and a responsiveness that increases its level of availability. Through personal experience a person can see that the sites performance is just as good as its reliability.


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