Circuit City Stores - Horizon Format

Horizon Format

By 2000, many Circuit City stores were out of date and in bad locations, unable to compete with the competition from newer Best Buy stores. In 2000, Circuit City abandoned the large appliance business and introduced a more self-serve "Big Box" format called "Horizon". This was controversial because in the previous year Circuit City was the number two appliance retailer in the United States, behind only Sears. The company had earned nearly US$1.6 billion in sales revenue from large appliances in 1999. However, executives were concerned about the competition from Home Depot and Lowe's and believed there would be big savings in warehouse storage and delivery costs if they quit the large appliance business. It was later realized that Circuit City thus missed out on the residential housing boom of the mid 2000s, which saw a dramatic rise in new appliance sales.

The new "Horizon" stores abandoned the original showroom experience for a brighter, more open sales floor format with open ceilings, low fixtures, and wood floor aisles to allow customers to browse the merchandise easily. The format allowed putting all products on the sales floor, except those that are too large for customers to carry themselves. Shopping carts were added for the expanded assortment of grab-and-go merchandise. A row of registers were located at the front of the store for the first time for quick checkout. Previously, the stores only had registers located within each department since the salespeople were on commission. Even though the new format had commissioned sales people, it was becoming very similar to Best Buy.

Every Superstore was retrofitted after the exit from the large appliance business, using the space for an expanded self-serve computer accessory and software selection. Stores at the time only sold PlayStation games under an exclusive agreement with Sony. The new space allowed them to sell Nintendo, Sega, and eventually Xbox games after the agreement ended. Music and movie sales had been added to most stores years before, but the extra space allowed the selection to be added to smaller stores. The retrofitting project alone cost the company US$1.5 billion.

In 2003, Circuit City converted to a single hourly pay structure in all stores, eliminating commissioned sales. Many previously commissioned sales associates were offered new positions as hourly "product specialists," while 3,900 salespeople were laid off, saving the company about $130 million per year. The day of the announcement, Wednesday, February 5, 2003, also known as "Bloody Wednesday", all stores remained closed until noon, to give the current associates the news and to prepare stores for the adjustment.

In 2004, with the expansion of the wireless phone market, Circuit City partnered with Verizon Wireless to include full-service Verizon Wireless sales and service centers in each Superstore. These locations were owned and staffed by Verizon Wireless. Circuit City stopped selling wireless phones with all other carriers due to the agreement.