The CompUSA Story: When Not Being Competitive Catches Up to You

CompUSA recently announced that it will be closing more than half of its 225 stores (see the list of closings here). The computer store chain is giving the following reason, “Based on changing conditions in the consumer retail electronics markets, the company identified the need to close and sell stores with low performance or nonstrategic, old store layouts and locations faced with market saturation.”

Translation: CompUSA hasn’t been competitive for some time, and the problem has caught up with the retailer. There are only so many computer beginners willing to pay $20 for a printer cable available for less than half that price at many locations both on and offline.

I worked at a white box retailer for three years back in the late nineties, and we had a CompUSA store right across the street. A good chunk of our business seemed to be walk-ins looking for a discount after having already visited the CompUSA across the way. My anecdotal experience doesn’t seem to be in isolation (check out what David Pogue of the New York Times has to say).

Since then, I’ve kept tabs on CompUSA over the years. The stores do have crazy deals in isolation now and then (i.e. get a product nearly free after some rebate(s)). But I’m guessing the customers who took advantage of those deals weren’t likely to impulse buy any of the regularly overpriced merchandise while in the store.

The company did/does have a pretty good brand presence with its fairly descriptive, yet simple name. But then again, so does Best Buy, which apparently conveys a more relevant message to computer and technology shoppers. And then there’s the issue of the extremely competitive online marketplace…

What CompUSA needs is a major structuring with a new focus on the customer experience (not easily done with minimum wage, high school labor). Will the company survive? I hope so, if only to be another place for me to get cheap routers after rebates.

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