Circuit City 2008 Annual Report Download - page 7

Table of Contents
Our industrial products include storage equipment such as wire and metal shelving, bins and lockers; light material handling equipment such as
hand carts, pallet jacks and hand trucks; ladders, furniture, small office machines and related supplies; and consumable industrial products such
as first aid items, safety items, protective clothing and OSHA compliance items.
We began to market our PCS ProfitCenter Software ™ suite of business applications in 2004. PCS ProfitCenter Software ™ is a web-based
application which is delivered as an on-demand service over the internet. The product helps companies automate and manage their entire
customer life-cycle across multiple sales channels (internet, call centers, outside salespersons, etc.).
Sales and Marketing
We market our products to both business customers and individual consumers. Our business customers include for-
profit businesses, educational
organizations and government entities. We have developed numerous proprietary customer and prospect databases. We consider our business
customers to include the various individuals who work within an organization rather than just the business itself.
We have established a multi-faceted direct marketing system to business customers, consisting primarily of relationship marketers, catalog
mailings and proprietary internet websites, the combination of which is designed to maximize sales. Our relationship marketers focus their
efforts on our business customers by establishing a personal relationship between such customers and a Systemax account manager. The goal of
the relationship marketing sales force is to increase the purchasing productivity of current customers and to actively solicit newly targeted
prospects to become customers. With access to the records we maintain of historical purchasing patterns, our relationship marketers are
prompted with product suggestions to expand customer order values. In certain countries, we also have the ability to provide such customers
with electronic data interchange (“EDI”) ordering and customized billing services, customer savings reports and stocking of specialty items
specifically requested by these customers. Our relationship marketers’ efforts are supported by frequent catalog mailings and e-mail campaigns,
both of which are designed to generate inbound telephone sales, and our interactive websites, which allow customers to purchase products
directly over the Internet. We believe that the integration of our multiple marketing methods enables us to more thoroughly penetrate our
business, educational and government customer base. We believe increased internet exposure leads to more internet-related sales and also
generates more inbound telephone sales; just as we believe catalog mailings and email campaigns which feature our websites results in greater
internet-related sales.
We continue to have strong growth in sales to individual consumers, particularly through e-commerce means. To reach our individual consumer
audience, we use online methods such as website campaigns, banner ads and e-mail campaigns. We are able to monitor and evaluate the results
of our various advertising campaigns to enable us to execute them in the most cost-effective manner. We combine our use of e-commerce
initiatives with catalog mailings, which generate online orders and calls to inbound sales representatives. These sales representatives use our
information systems to fulfill orders and explore additional customer product needs. Sales to individual consumers are generally fulfilled from
our own stock, requiring us to carry more inventory than we would for our business customers. We also periodically take advantage of attractive
product pricing by making opportunistic bulk inventory purchases with the objective of turning them quickly into sales. We have also
successfully increased our sales to individual consumers by using retail outlet stores. As of December 31, 2008 we had 29 retail locations open in
North America and Puerto Rico.
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