Patrick
09-20-2004, 12:11 PM
Well, as many of you know, I announced here a month or so ago that Circuit City and Best Buy were both moving to the Memorial and Penn location. At that time, I questioned whether three electronics stores could survive at one intersection. This article seems to bring up the same question. If one of the stores folds, I bet Ultimate Electronic is knocked out of the picture by Best Buy and Circuit City. Not only are they cheaper, but they're larger stores and offer better selection.
I personally still don't think Ultimate has much of a chance. I think locating similar stores this close together is a bad move. One of the reasons they survuve on the NW Expressway and N. May corridors is because they're quite a ways apart.
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"Electronics giants square off at Quail Springs
by Ted Streuli
The Journal Record
9/20/2004
A section of Memorial Road on Oklahoma City's north side is about to become a consumer electronics Mecca.
Electronics retail behemoths Circuit City and Best Buy will each open a new store just a silicon chip's width apart and a within an extension cord's reach of a highly successful Ultimate Electronics location. That bodes well for consumers, but the likelihood that all three will survive in such close proximity remains a question only shoppers can answer.
"In general, we want competition," said Robert Dauffenbach, director of the University of Oklahoma's Center for Economic and Management Research.
Dauffenbach said that a congregation of industry competitors would foster comparison shopping.
"Competition is good," said Circuit City spokeswoman Kathie Hess. "It allows for variety for shoppers and it brings more people to the area."
Thornton, Colo.-based Ultimate Electronics opened at 2120 W. Memorial Road in July, 2001. Founded in 1968, the chain is substantially smaller than the competitors that are about to take up residence across the street. The company operates 65 stores, more than half of which have opened in the past four years, all 30,000 square feet to 34,000 square feet. One month after the store opened, manager Rodney Watson told The Journal Record that sales were 80 percent above projections.
"If the economy of north Oklahoma City was any hotter, we would have to have a firetruck stationed in front of our store, 24/7," he said.
Less than 30 days after opening its doors, the Memorial Road store was outselling all but three of the company's sites, two of them 20-year-old Denver locations, the third in Tulsa.
Ultimate Electronics has a second Oklahoma City store at Interstate 240 and S. Walker Avenue.
"Here we are in a metropolitan market that, by all measurements, has no business supporting two stores at the levels which these stores (are)," Watson said.
But will the desire for plasma televisions and home theater audio systems continue to make consumers flock to Quail Springs? Circuit City and Best Buy are betting it will.
Richmond, Va.-based Circuit City, which operates 613 stores nationwide, is building a 33,500-square-foot outlet. The new store will employ about 60 people and open in December, just in time to capture Christmas cash. The chain already has four stores in the area and two in Tulsa.
"We examined the trade area and it was a good location for us," Hess said. "Competition fosters consumer awareness of products and prices. We're very confident people will continue to shop us."
Minnesota-based Best Buy will add to its 634 stores when it opens in 30,000 square feet of leased space at 2201 W. Memorial Road in November, the metro area's fourth. The nation's largest electronics retailer is spending $50 million to redo its stores, trying to hold off competitors - not longtime rivals like Circuit City, but relative newcomers to the industry like Wal-Mart, Dell and eBay.
Best Buy President Al Lenzmeier told the Associated Press that the retailer's big changes have historically come when it was struggling. But this time, Lenzmeier said, Best Buy is anticipating a changing marketplace rather than reacting to it. This time, he said, the competition is "much more formidable."
"When we look for a site we want to make sure it's as convenient as possible for the customers," said Best Buy spokesman Jay Musolf. "Every market and every situation is different. That's where we want to go back and focus on what we deliver."
And therein may be the not-so-secret recipe for coming out king of the Quail Springs electronics hill. Since all three chains have similar pricing strategies, Dauffenbach said this game of Electronics Survivor would be determined by customer service and satisfaction and the one that fails to deliver would likely be the first to be voted off the island.
"Ultimately, it may be that somebody doesn't make it," Dauffenbach said. "But that's the competitive environment."
Circuit City, which holds the industry's number two spot, is also hoping to drive customer satisfaction up with redesigned stores that have open floor plans. That makes them more conducive to browsing and allows customers to compare accessories.
"We're revitalizing our store base and our new stores have a brighter, more contemporary look," Hess said. "People offer different things. With our product knowledge, service and superior products we hope we offer a different shopping experience than you can get anywhere else."
Best Buy wants to dazzle its customers too, promoting in-store product trials while the redesign remains in the testing phase.
"You want them to see how they can have more fun with the technology in their lives," Musolf said.
National chains follow national business models and Dauffenbach said that for each store to differentiate itself, local managers might need more discretion than they are typically allowed.
"Their strategy for the individual store may not vary a lot," he said. "If there's management discretion, that might make them slightly different from national model."
I personally still don't think Ultimate has much of a chance. I think locating similar stores this close together is a bad move. One of the reasons they survuve on the NW Expressway and N. May corridors is because they're quite a ways apart.
----------
"Electronics giants square off at Quail Springs
by Ted Streuli
The Journal Record
9/20/2004
A section of Memorial Road on Oklahoma City's north side is about to become a consumer electronics Mecca.
Electronics retail behemoths Circuit City and Best Buy will each open a new store just a silicon chip's width apart and a within an extension cord's reach of a highly successful Ultimate Electronics location. That bodes well for consumers, but the likelihood that all three will survive in such close proximity remains a question only shoppers can answer.
"In general, we want competition," said Robert Dauffenbach, director of the University of Oklahoma's Center for Economic and Management Research.
Dauffenbach said that a congregation of industry competitors would foster comparison shopping.
"Competition is good," said Circuit City spokeswoman Kathie Hess. "It allows for variety for shoppers and it brings more people to the area."
Thornton, Colo.-based Ultimate Electronics opened at 2120 W. Memorial Road in July, 2001. Founded in 1968, the chain is substantially smaller than the competitors that are about to take up residence across the street. The company operates 65 stores, more than half of which have opened in the past four years, all 30,000 square feet to 34,000 square feet. One month after the store opened, manager Rodney Watson told The Journal Record that sales were 80 percent above projections.
"If the economy of north Oklahoma City was any hotter, we would have to have a firetruck stationed in front of our store, 24/7," he said.
Less than 30 days after opening its doors, the Memorial Road store was outselling all but three of the company's sites, two of them 20-year-old Denver locations, the third in Tulsa.
Ultimate Electronics has a second Oklahoma City store at Interstate 240 and S. Walker Avenue.
"Here we are in a metropolitan market that, by all measurements, has no business supporting two stores at the levels which these stores (are)," Watson said.
But will the desire for plasma televisions and home theater audio systems continue to make consumers flock to Quail Springs? Circuit City and Best Buy are betting it will.
Richmond, Va.-based Circuit City, which operates 613 stores nationwide, is building a 33,500-square-foot outlet. The new store will employ about 60 people and open in December, just in time to capture Christmas cash. The chain already has four stores in the area and two in Tulsa.
"We examined the trade area and it was a good location for us," Hess said. "Competition fosters consumer awareness of products and prices. We're very confident people will continue to shop us."
Minnesota-based Best Buy will add to its 634 stores when it opens in 30,000 square feet of leased space at 2201 W. Memorial Road in November, the metro area's fourth. The nation's largest electronics retailer is spending $50 million to redo its stores, trying to hold off competitors - not longtime rivals like Circuit City, but relative newcomers to the industry like Wal-Mart, Dell and eBay.
Best Buy President Al Lenzmeier told the Associated Press that the retailer's big changes have historically come when it was struggling. But this time, Lenzmeier said, Best Buy is anticipating a changing marketplace rather than reacting to it. This time, he said, the competition is "much more formidable."
"When we look for a site we want to make sure it's as convenient as possible for the customers," said Best Buy spokesman Jay Musolf. "Every market and every situation is different. That's where we want to go back and focus on what we deliver."
And therein may be the not-so-secret recipe for coming out king of the Quail Springs electronics hill. Since all three chains have similar pricing strategies, Dauffenbach said this game of Electronics Survivor would be determined by customer service and satisfaction and the one that fails to deliver would likely be the first to be voted off the island.
"Ultimately, it may be that somebody doesn't make it," Dauffenbach said. "But that's the competitive environment."
Circuit City, which holds the industry's number two spot, is also hoping to drive customer satisfaction up with redesigned stores that have open floor plans. That makes them more conducive to browsing and allows customers to compare accessories.
"We're revitalizing our store base and our new stores have a brighter, more contemporary look," Hess said. "People offer different things. With our product knowledge, service and superior products we hope we offer a different shopping experience than you can get anywhere else."
Best Buy wants to dazzle its customers too, promoting in-store product trials while the redesign remains in the testing phase.
"You want them to see how they can have more fun with the technology in their lives," Musolf said.
National chains follow national business models and Dauffenbach said that for each store to differentiate itself, local managers might need more discretion than they are typically allowed.
"Their strategy for the individual store may not vary a lot," he said. "If there's management discretion, that might make them slightly different from national model."