Circuit City Plugs Into Amazon.com

By Alan Wolf -- TWICE, 8/21/2001

Richmond, Va. - Circuit City and Amazon.com have signed a multi-year pact that will allow cyber shoppers to purchase consumer electronics on Amazon and retrieve them at the nearest Circuit City store.

The service, which is expected to launch in time for the Thanksgiving weekend, will increase Amazon's CE offering by several thousand products thanks to Circuit City's greater assortment, and could help ease the e-tailer's inventory and fulfillment burden.

In turn, Circuit City will be able to tap into Amazon's 35 million-strong customer base, while their in-store pickups could generate increased traffic and sales.

The multi-channel delivery option, which has been a hallmark of Circuit City's own e-commerce site, will initially be limited to products that are carried by both partners. The number of overlapping items is still being determined, a Circuit City spokesman said. Short term, the several thousand items that are carried by Circuit City but not by Amazon will be available for in-store pickup only, although the specialty chain will add its own direct ship option early next year. However, merchandise available at Amazon but not at Circuit City will only be shipped by Amazon.

Shoppers will be able to choose a delivery option upon checkout, and products on the site that are provided by Circuit City solely will be labeled with the company's logo. By entering their ZIP codes, consumers can check the in-stock status of specific products at the nearest of 600 Circuit City stores in real time, an exclusive feature also found on CircuitCity.com.

Under terms of the deal, Circuit City will pay Amazon a percentage for any Circuit City inventory sold through the site. Amazon will process the transaction, while Circuit City will handle fulfillment, product-related customer service and returns.

'Circuit City is excited to join our name with that of the leading customer-focused e-tailer and believes this agreement will serve as a revenue generator for both companies,' said Circuit City president/CEO Alan McCollough. Added Amazon founder/CEO Jeff Bezos, 'We're thrilled to be working with Circuit City to provide our customers with an even greater selection of cool electronics products, as well as the option of in-store pickup.'

About half of CircuitCity.com customers opt for in-store pickup, McCollough noted.

According to the Circuit City spokesman, the company is not overly concerned about sharing cyber sales with an e-commerce competitor. 'It's another way to reach out to other customers who aren't customers of CircuitCity.com,' he said. 'It's an excellent way to extend our service, further leverage our distribution structure and drive traffic to our stores.'

For Amazon, the deal adds more fuel to its two-year-old CE business, which is its fastest-growing segment and second largest behind books. It also represents the latest in a series of brick-and-mortar alliances that include pacts with Toys 'R' Us and the Borders bookstore chain.