Modern Merchant Podcast [EP 30]: Investing in Ecommerce w/ Circuit City’s Victor Elmann

Below, you will find a transcript of the episode.

Jamie McCarthy:

Hey, everybody. Welcome back to The Modern Merchant Podcast. I’m your host, Jamie McCarthy, head of strategic accounts at Flxpoint. Today, we have a really exciting guest on. We have Victor Elmann. He’s actually the chief marketing officer of Circuit City. Hey, Victor.

Victor Elmann:

Hey. Great to be on, Jamie.

Jamie McCarthy:

Super excited to have you. I honestly really remember, and I’m sure you hear this a lot, maybe from my generation, growing up and going into a Circuit City for example, checking out CDs. Or back in the early 2000s, digital cameras were a big deal. I remember always going in and looking at CDs and digital cameras and just loving being in that retail space. But as we’ve all seen just throughout the years and certain events unfolding, retail has become, I guess less successful than a full blow ecommerce type model with the brick and mortar.

Really love having you on today because I want to talk all things Circuit City and the evolution of you guys being more of that brick and mortar originally, now you’re really relying on ecommerce to really evolve and make a big come back. Really excited to have you on, I know I keep saying that. But if you could just tell us a little bit about yourself and how you came onto the Circuit City scene, I think that’d be a great place to start.

Victor Elmann:

No, thanks for sharing your experience and I have fond memories of Circuit City. I’m a New Yorker and there was a lot of Circuit City based out of New York and I remember going through the aisles as a teenager, as a kid, exploring technology and exploring products, things like that. It was a lot of fun.

Me, myself, I’ve been in retail basically my whole life, I’m a retail baby. My parents had consumer electronics shops growing up, so I was one of those kids, five years old, behind a cash register. I’ve done every retail job imaginable from sales to customer support to sweeping the floors. Then something in the late ’90s, something called the internet was starting to become popular and I transitioned to that. That was when Amazon was still a book store and Yahoo was the search engine of the day.

Jamie McCarthy:

The glory days.

Victor Elmann:

The glory days where people had green fonts on their websites.

Jamie McCarthy:

Was all Comic San.

Victor Elmann:

[inaudible 00:02:50] backgrounds.

Jamie McCarthy:

Awesome.

Victor Elmann:

Literally been in retail my whole life and consumer electronics my whole life. Just in 2016 I was working for another company and a buddy of mine said, “Hey, Victor. What do you think of Circuit City?” I’m like, “Well, I used to shop at Circuit City, I have great memories of it.” He said, “You should come talk to Ronnie,” Ronnie’s the CEO. Said, “You should talk to Ronnie,” said, “Trying to bring it back up.” I did and the rest is history, I guess.

Jamie McCarthy:

Yeah, that’s incredible. I think the difference between Circuit City back in the day and Circuit City now, is like I mentioned before, you guys are really relying now on that ecommerce leg to stand on. As far as your strategy, especially as chief marketing officer, what are some of your strategies that you’ve implemented and I guess, the message? What’s the message that you guys are bringing to the table now? Now that you’re more ecommerce focused and maybe less brick and mortar focused.

Victor Elmann:

Well, I think we have the same values as the old Circuit City. If you remember the old Circuit City, it was more about the consultation with the sales team. They had a sales team that’s been there for a long time. It’s not like today’s retail where higher turnover. It was a sales team that had been there for a long time, they knew the product and it was more of a consultative approach to retail. It was more of the discovery. You went there and you discovered products and you learned about it from the staff, the sales guys in the stores.

One of the things that we notice in ecommerce today is that products have become and other ecommerce sites, our competitors, have become more self-service retail. If you go to one of our competitors you’ll notice that there’s no phone number on the website, it’s like you search for a laptop or a TV and you’ll see 100 pages of different laptops. A customer may not know about laptops or may not know what specific product is good for them. So we spent a lot of time thinking about well, how do we change retail? I don’t think we need another Amazon out there, I think we need more category focused retailers that really help customers find products that they need.

For us, we spent a lot of time thinking about the discovery aspect, as I mentioned, how can customers discover things? How can customers engage and talk with customer service people to get consultations about the products that they need? And how can they play online? In a store, it’s easy to play with things and touch and feel things. But how do we replicate that in an ecommerce perspective? We came up with a bunch of differentiators in our side, we came up with a shop by room concept where you can see what products look like in your house via [inaudible 00:06:15] reality or these little vignettes that we have on the website. We did a bunch of different things like that.

Jamie McCarthy:

That’s incredible, so you are still very focused on consulting the consumer versus just throwing a bunch of products onto a site and seeing what sells.

Victor Elmann:

Yeah, we have our phone number on the top of our page and we also have live chats. We encourage customers or visitors to come to our site, talk to a specialist. We have dedicated specialists for each category, so if you’re in the market for a TV, you’re getting advice from someone that knows TVs, not he sells apparel or socks today and he’s trying to give you advice for a TV, like you see in other retailers.

Jamie McCarthy:

Yeah, that’s important too, especially obviously, consumer electronics. You think of that, you think of maybe more high ticket items. If you’re looking to spend a few thousand dollars on a TV, you definitely want to know what you’re getting.

Victor Elmann:

I’ll tell you, my brother calls me all the time and he says, “Hey, Victor. Is this a good laptop for me?” He shows me this $200 Chromebook. I’m like, “Well, what are you using the laptop for?” He’s like, “Yeah, I need it for work, I need Excel, I need this and that.” I’m like, “This is not what you need unless you [inaudible 00:07:44] to crash.”

Jamie McCarthy:

It’s good for your wallet and that might be about it, but.

Victor Elmann:

I take it for granted because I’m in consumer electronics, that people understand this stuff, but the mainstream customers, they don’t understand it. They’re looking for advice and it’s hard to get it. Most people need to go on YouTube and find influencers, need to really spend a lot of time researching products and not everybody’s a techie, they don’t really care. They just want to know what works for me and get on with their life.

Jamie McCarthy:

Right. Then just switching gears a little bit then. To that point, when you mentioned you go on a site and there’s just 100 pages of product and we see that a lot with some of the big box retailers who offer more of that marketplace model and allow third party sellers to come through and also offer their product in addition to whatever that retailer’s also offering. Is this something that you guys also plan to support? Really that marketplace model, where you’re allowing third party retailers to also list items.

Victor Elmann:

It’s a two step conversation. One is Circuit City as a platform where we help our partners sell across circuitcity.com, as well as other ecommerce channels. We at Circuit City sell on Amazon and the other type of channels and we do this to get exposure to the products and the brands on those marketplaces. Because in truth, Amazon’s the number one search engine in the world for products. So manufacturers really should be in those pages, if not to engage with those customers. There are several strategies we could do there as well.

Then the circuitcity.com, which is a complete different strategy where we want to get as much product as we want within reason. More of a curated approach to product. We don’t want to be in a situation where a customer searches for HDMI cable and gets 500 pages of HDMI cables, because I don’t think that really helps the customer journey. But we want to have a consistent maybe good, better, best type of approach and have customers have some options with the brands and products that differentiate from each other.

Then you mentioned the marketplace versus 1P, and that’s a debate that we’re having internally as well. We have our own products that we purchase from vendors, either through our distribution centers or through drop ship vendors and we’re currently debating the three 3P side of this. We’ll see in the future.

Jamie McCarthy:

It’s interesting, I do, I see it more and more obviously. I’m going to say probably a four letter word to you, but I know Best Buy, that’s part of their model. We know obviously Walmart now has mimicked the Amazon model. They were probably one of the first to do it behind Amazon. I could be totally wrong there, but pretty sure that’s the case. Just curious, yeah, if that’s something that you guys want to do or if you guys are taking a totally different approach there. It sounds like there’s still some conversations to be had around that.

Victor Elmann:

Yeah, and I think as other retailers think about it and their product assortment, I think it makes sense to do both for some retailers. To do vendor direct, whether it’s a drop ship or stocking versus marketplace. There’s trade offs that the retailers can think about.

Jamie McCarthy:

Yeah, and some of those trade offs being what? I think probably the biggest one for me that comes to mind would be maybe quality control. When you allow third party resellers through the gates, it’s harder for you guys to keep your finger on the pulse as far as hey, what are our customers getting? Like, “What are they actually receiving when they order a product?” That’s obviously something to always consider.

But I think when you talk about being able to offer just more diversification in the products that you’re offering, I think that’s definitely where the marketplace comes in to be super beneficial for a lot of [inaudible 00:12:12].

Victor Elmann:

There’s a whole host of other problems. In our industry, there’s something called minimum advertised priced, the vendors regulate what the prices should be. We also want authentic products, we also want products that are purchased the correct way from an authorized seller so there’s a warranty behind it in case the product fails. I think if you look at different marketplaces, you’ll see some marketplaces are closed marketplaces. Amazon’s open, anybody can list, eBay’s open, anybody can list. Then you look at something like Best Buy Canada or Target or Macy’s it’s an invite only type of marketplace. It’s interesting to see what happens.

Sorry, my bad.

Jamie McCarthy:

No, you’re totally fine. Then to switch gears a little bit, we see [inaudible 00:13:08] brands employing more of a D2C model for online sales, more so now than in previous years. The pure online retailer, that etailer pitch, has that changed or evolved at all, let’s say from 10 years ago to today? I don’t know previously if Circuit City, if you guys when you were selling online, is that message different back then than it is today?

Victor Elmann:

No, I think the message is the same. A lot of brands try to go direct to consumer and then they learn it’s not as easy as they think. Brands are very good at manufacturing products, maybe marketing products, but there’s a whole host of problems when you try to go direct to consumer through fulfillment and customer acquisition and those type of things. Even now as you see cost of customer acquisition in an ecommerce perspective has gone up more than double just in the last couple years. And all these brands that have tried to go direct to consumer are finding out that it’s not as easy as it was two years ago when you’d just do a TikTok ad or Instagram ad to drive traffic to your site.

More and more we’re seeing direct to consumer brands now shifting and trying to diversify in working with ecommerce retailers that actually can help the brands. We have customer bases already, we have entire ecommerce teams dedicated to this, we have fulfillment centers nationally that can ship within two days or better across the countries. So my suggestions to brands that work in direct to consumer is to also work with retailers, as retailers themselves have a lot of data and lot customer history and a lot of loyalty to the retailers that could help with their ecommerce sales.

Jamie McCarthy:

Yeah, 100%. I think too, more than anything, it’s that visibility and it’s their brand is backed by the Circuit City name or their products are featured on your site. Again, it’s a name that everyone knows, Circuit City. Whereas maybe a newer brand, people aren’t 100% confident in that yet. But if they see oh, great, Circuit City offers it, looks like it’s a legitimate enough product to trust in [inaudible 00:15:32].

Victor Elmann:

I love that and it’s also cross merchandising opportunities. For example, if someone’s in the market for whatever, a TV, they could also get a sound bar, they could also get other accessories that go together in their living room to make their room a reality of what they’re trying to do all together. They don’t have to piecemeal solutions through different retailers. You can call us or you can chat or you can find things all in one place and we’ll create that solution for the end user.

Jamie McCarthy:

Yeah, that’s incredible. Versus just having, like you mentioned, piecing it all together on your own. I’d be entirely lost.

When we talk about growth, if we shift gears and talk about growth for you guys, what are some of the strategies that you’re really excited for with Circuit City in the next year or two, that you guys are just really going to double down on? Is there really any key area there that you’re just really looking forward to using as a growth tool?

Victor Elmann:

There’s a lot of really cool digital strategies that we’re employing. Obviously we’re going to continue to invest in ecommerce and invest in growing that part of it. But some of the things that we’re doing and we’re thinking about longterm and you see other brands doing this, we already started [inaudible 00:16:59] reality, we’re thinking about well, now metaverse is a thing, what’s metaverse, what’s NFT? What are these things and how can we grow those up and coming channels? That’s super exciting.

Another channel we’re looking into that’s super cool is the broadcast channel. You can actually stream video, like a QVC or HSN on your own ecommerce site. I saw Amazon did something similar during Prime Day, which was super cool. We’d like to see that in Circuit City, specifically for consumer electronics, all day, every day. Engage customers with solutions that are out there.

Jamie McCarthy:

I think I did see that too with Amazon, where it was more like, I don’t want to say influencers. Maybe it was, but they had that live stream of just random folks on there featuring certain products. Is that what you’re referring to?

Victor Elmann:

Yeah, something like that, but not just product specific. More lifestyle specific, where we show you an entire living room of solutions and how they all work together. Here’s the smart home, here’s how you connect everything together in a smart home. Because smart means anything to anybody, nobody really knows what you can do with smart. We’re trying to figure out, instead of selling products, selling the solution. How do I get notified when my kids get home from school, how do I wake up to my favorite Spotify song? Things like that, I think there’s a lot of value in customers understanding what solutions there are out there, not just every single product.

Jamie McCarthy:

Sure, you’re really using this digital platform [inaudible 00:18:48] really paint a broader picture for your consumers. Would you say that that’s the case?

Victor Elmann:

Yeah, and I would say the key buzzword that you keep on hearing is social commerce. That’s direction that we’re hearing too.

Jamie McCarthy:

I love that. Are you guys actually, and I apologize, I’ve been assuming a little bit, but are you planning on opening any brick and mortar stores at all? Or are you guys going to be a purely ecommerce [inaudible 00:19:16] moving forward?

Victor Elmann:

Our focus is ecommerce moving forward. We see that’s where the growth is and the value, especially during COVID and a lot of people are at home. If there is a brick and mortar play, it’s going to be more of a store in store model. You can see that’s the trend in retail today. You’ll see brands collaborating with each other. Toys R Us just did something with Macy’s. You go to Kohl’s you see a Sephora in Kohl’s. Target has a Ulta in there, I’m pretty sure Lowe’s just signed a deal with Petco. Those are the type of relationships that we’re seeing in a brick and mortar perspective. That’s our focus in terms of brick and mortar, not standalone retail stores.

Jamie McCarthy:

Yeah, I think that’s smart too to do it that way. As far as the biggest difference between let’s say a brick and mortar retailer versus a purely online, let’s take the store in store out of it entirely. You’re looking at brick and mortar retailer versus this 100% ecommerce retailer, what do you think as far as from a marketing perspective, what do you think the advantages of being purely ecommerce are versus that brick and mortar?

Victor Elmann:

I think they both have different advantages. Honestly, I think there needs to be both, especially consumer electronics because if I’m in the market for a headphone I want to hear the headphones in person before I buy it. Or if I want to buy a television, I want to see the quality of the picture, if you will. I think a successful consumer electronics you need both. Otherwise, it’s a showroom, someone goes to a retail store, sees something they like and they just buy it from an ecommerce person.

That being said, the advantages of ecommerce is that speed to market, endless aisle. A retailer’s not going to have for example, if something has 10 colors, retailer might just stock two colors; black and white. Then I really want the red headphone, but they don’t have it in stock. Speed to customer delivery is also something you can actually deliver same day now in ecommerce. No longer, if you need something right away, you have to go to a store. Now you can actually get same day delivery.

Yeah, they both have advantages and disadvantages. I think omni channel’s really the best way to be-

Jamie McCarthy:

Yeah, agreed.

Victor Elmann:

Moving forward.

Jamie McCarthy:

When you talk about same day delivery, do you guys have any plans to partner with any delivery companies to offer any same day delivery option?

Victor Elmann:

We have that right now. We have in certain cities, you have the ability if you place the order, I think it’s before 12:00 local time, to get the order the same day. We have that in strategic big cities.

Jamie McCarthy:

Got it, okay. Is that your own-

Victor Elmann:

Ninety-nine percent of the country can get the product within two days and then there are some cities you can get it same day if you want.

Jamie McCarthy:

Love it. Well, Victor, just to wrap things up here, I’ve been asking people lately either what are you reading or what are you listening to? But for you specifically, big marketing guy, obviously big consumer electronics guy, do you have any favorite podcasts that you’re listening to currently that you want to suggest to us? Or you not a podcast [inaudible 00:23:09]?

Victor Elmann:

I am a Joe Rogan guy. I’m on planes a lot and I listen to Joe Rogan. It has nothing to do with marketing or anything, but sometimes you just need to-

Jamie McCarthy:

Turn it off, yeah.

Victor Elmann:

Turn it off.

Jamie McCarthy:

Agreed. Yeah, Joe Rogan’s great. I’m more into true crime type podcasts, but I’m the same way. If I’m going to listen to a podcast, it’s not going to be anything that’s going to make me smarter or help me in anyway. It’s just going to be fun stuff.

Victor Elmann:

Yeah, exactly.

Jamie McCarthy:

Then Victor, tell everybody who’s listening, where can we find obviously Circuit City, circuitcity.com, but where can everyone find you if they want to connect?

Victor Elmann:

The easiest way to connect with me is on LinkedIn. I’m on social media @ Victor Elmann, but LinkedIn is the best way to reach out to me. I have content that I pass through all the time on there. [inaudible 00:24:03] engage with me there.

Jamie McCarthy:

Yeah, yeah, I was checking out a little bit of it last week, actually and super insightful. You were just down in, was it the Miami retail show? What show was it that…

Victor Elmann:

The Miami Retail Summit. Yeah, that was pretty cool.

Jamie McCarthy:

Yeah, you were a speaker on the panel there, is that right?

Victor Elmann:

Yeah, we were talking about the next big idea in retail, in ecommerce specifically. What’s coming up in ecommerce. There’s a lot of insights going on all the time, just ecommerce, retail in general, even supply chain. Supply chain is super important for a retailer today, especially ecommerce. If you’re a brand, if you’re a retailer, if you’re a direct to consumer brand, it’s really important to be ahead of the trends of what’s going on.

Jamie McCarthy:

Yeah, you can’t talk ecommerce anymore without supply chain going hand in hand with it.

Victor Elmann:

No, absolutely and supply chain’s a nightmare right now.

Jamie McCarthy:

Yeah. Can you share with us, just quickly before we hop off here, can you share with us what were some of those additional insights that you guys discussed at the retail summit?

Victor Elmann:

My key call outs from the next big idea specifically for me was collaborations with brands. Like I said, the store in store type of model or just direct to consumer with retailers like a Circuit City. We spoke a lot about metaverse and NFTs and that kind of thing, which it’s really cool. There’s a fashion brand, I forget which one. One of the major fashion brands that just did a summer fashion show in the metaverse. The customer, if they purchased the digital NFT, got the physical handbag as well. I thought that was really cool, what’s going on.

Jamie McCarthy:

Yeah, that’s a great way to encourage engagement too, I think. When you’re talking to consumers and trying to connect with them, that’s super smart.

Victor Elmann:

Yeah, I agree.

Jamie McCarthy:

Yeah, I’m excited to keep an eye on that. NFTs are probably not so much my thing, but I’m definitely going to keep an eye on it. Metaverse stuff, I think is incredibly interesting. I think in the next year or two especially, it’ll be interesting to see where we’re at with that.

Victor Elmann:

I love it. Target has a metaverse store now too. You can shop in the Target metaverse.

Jamie McCarthy:

Yeah, it’s wild. But yeah, I really appreciate, Victor, having you on. Super insightful, like I said, we saw Circuit City come through the other day and got super excited to know that we were going to have you on. Really appreciate all of your time and all of the insights you provided. Super helpful.

Victor Elmann:

No, it’s a pleasure talking to you, Jamie. Hopefully we continue the conversation again soon.

Jamie McCarthy:

Yeah, absolutely.

All right, guys thanks again so much for tuning into another Modern Merchant podcast episode. If you want to learn more about us, check us out at flxpoint.com, that’s flxpoint without the E dot com. We’ve got our Modern Merchant blog up there, it’s full of the latest ecommerce information and news. Also, go ahead and subscribe to our YouTube channel and follow us on socials @ Flxpoint. We’ll see you again next week with another episode.