Mourning But Not Missing the Death of Circuit City
As a consumer, I will not miss Circuit City as it closes its remaining 567 stores in the United States. But all software industry professionals should mourn its passing. Here’s how its closure impacts software industry professionals.
I am having a hard time remembering the last product I purchased at a Circuit City, whereas I remember fondly the last two iMacs I purchased at CompUSA. Proactive International has handled many cross platform products over the years, which means we’ve always had to have a Mac available. While local Mac specialist stores like The Mac Store were left to sell nothing but their spleen while Apple Stores had plenty of iMacs, and strangely, so did the CompUSA nearby. It is hard to remember what I purchased at Circuit City as I stopped shopping there after many, many visits in which advertised products were never available on shelves.
But I will credit Circuit City in that the few I visited over the last few years carried a reasonable selection of software titles, and not just games, Windows and a handful of utility or anti-virus programs. And for that, I will mourn the death of Circuit City as a loss of one more venue for software to reach end users. The narrowing of the software channel has had a profound impact on software innovation.
No, I’m not over dramatizing, and yes, I recognize that Circuit City probably sourced its software from Ingram or Navarre, just like everyone else (with some exceptions like Frys ). Even though Circuit City carried the same stuff as everyone else, a retail presence offers some hope for change because it offered more choices for purchase. Some developers are late to recognize what this means.
But I’ll give credit to iPhone developer wake up. iPhone developers, many of which were Mac developers and strong platform supporters of all things Apple, are becoming less enchanted by having only a single venue for selling their applications. While I was at MacWorld 2009, many iPhone developers I talked to had nothing but complaints to level about the single venue of the iPhone App Store for iPhone applications The realization only seems to be setting in over the last several months that having a single venue for sales means customers have less reason to visit your website. You are in a much better position if you already have a great Mac application and therefore can upsell your customers to your iPhone solution. But doing that, you need to already have other applications plus some knowledge of marketing and business development. Combine lack of pre-existing market presence with a narrowness of channel and what do you get?
The retail software market has been headed in that direction for some time now. To reach most retailers, you have to get your software product into a pick-and-pack distributor like Ingram Micro or Navarre; most retailers would rather pass over an order than have to order directly from a vendor. But there’s been some changes in the distribution scene which are particularly irksome to new vendors.
If you are a one product company, or you have a product which isn’t a perfect fit for retail, more often than not, Ingram or Navarre will direct you to engage an aggregate vendor. This is a company that puts your products on their pre-existing catalog with the distributors, to which you pay a (very steep for new vendors) monthly fee and a percentage of sales. This is in addition to the percentage taken by the distributor.
So getting into Circuit City hasn’t been a picnic, but there was a promise there that is no longer available.
