Circuit City 2003 Annual Report Download - page 7

Misco™, Global Industrial, ArrowStar™, Dartek.com™ and 06™.
Full-line computer product catalogs offer products
such as PCs, notebooks, peripherals, computer components, magnetic media, data communication, networking and
power protection equipment, ergonomic accessories, furniture and software. Full-line industrial product catalogs offer
products such as material handling products and industrial supplies. Specialty catalogs contain more focused product
offerings and are targeted to individuals most likely to purchase from such catalogs. We mail catalogs to both businesses
and consumers. In the case of business mailings, we mail our catalogs to many individuals at a single business location,
providing us with multiple points-of-entry. Our in-house staff designs all of our catalogs. In-house catalog production
helps reduce overall catalog expense and shortens catalog production time. This allows us the flexibility to alter our
product offerings and pricing and to refine our catalog formats more quickly. Our catalogs are printed by third parties
under fixed pricing arrangements. The commonality of certain core pages of our catalogs also allows for economies in
catalog production.
During 2003, we distributed approximately 97 million catalogs, of which approximately 62 million catalogs were
mailed in North America and approximately 35 million catalogs were distributed in Europe. This total was
approximately 9% fewer than in the prior year as we were able to leverage our advertising spending as a result of
increased internet sales.
E
-commerce
We continually upgrade the capabilities and performance of our internet web sites. We currently have twenty-two
e-commerce sites, including www.systemaxpc.com , www.globalcomputer.com , www.tigerdirect.com ,
www.dartek.com , www.misco.co.uk , www.simply.co.uk , www.hcsmisco.fr , www.misco.de and
www.globalindustrial.com , offering a wide variety of computer and industrial products and allowing customers around-
the-clock, on-line access to purchase products. Our internet sites feature on-
line catalogs of thousands of products. Many
of these sites also permit customers to purchase “build to order” PCs configured to their own specifications. In 2003 we
had over $384 million in internet-related sales, representing 23.2% of total revenues, an increase of $126 million from
2002.
Customer Service and Support
We generally provide toll-free telephone number access to our customers. Certain of our domestic call centers are
linked to provide telephone backup in the event of a disruption in phone service. In addition to telephone orders, we also
receive orders by mail, fax, electronic data interchange and on the internet.
Orders are fulfilled on a timely basis and are generally shipped by United Parcel Service in the United States and
by similar national small package delivery services in Europe, as well as by various freight lines and local carriers. Most
customers receive their orders (other than custom items, large furniture and large industrial items shipped directly by the
vendor) within one or two business days of the order date as a result of the regional locations of our distribution centers.
We provide extensive technical telephone support to our Systemax brand PC customers. We maintain a database
of commonly asked questions for our technical support representatives, enabling them to respond quickly to similar
questions. We conduct regular on-site training seminars for our sales representatives to help ensure that they are well
trained and informed regarding our latest product offerings.
Sales and Distribution Centers
A large number of our products are carried in stock, and orders for such products are fulfilled directly from our
distribution centers, typically on the day the order is received. The strategic locations of our distribution centers allow
next day or second day delivery via low cost ground carriers throughout most of the United States, Canada and Western
Europe. We maintain relationships with a number of large distributors in the United States and Europe that deliver
products directly to our customers.
North America
We operate out of multiple sales and distribution facilities in North America. Certain of these facilities are linked
by a wide area network management information system. In the event of adverse delivery conditions, such as bad