Systemax to Expand Tiger Connect Sections, Adds Circuit City Product

Systemax will install Tiger Connect sections to all CompUSA/TigerDirect stores, seeking to expand sales of mobile devices with cellphone services for the first time, said Lonny Paul, vice president of marketing and strategic initiatives.

The 2,000-square-foot department, which debuted in late November at the front of the Miami flagship store, carries about 50 cellphones and the AT&T service. It also will merchandise netbook and tablet PCs, USB dongles for 3G data services and other mobile devices. In addition to the services of AT&T and other carriers, TigerDirect will market DirecTV, Dish Networks and cable offerings, including Comcast in TigerDirect/CompUSA markets where it’s available, Paul said. Tiger Connect will be installed across the chain’s U.S. stores by spring.

The new department fills space previously occupied by free-standing promotional displays, Paul said. The section has three sales staffers, who will sell the products and services using six 23-inch touchscreen LCDs that will display product data and allow for comparison between devices, Paul said.

"We all understand how mobile is taking over and have sold cellphones and unlocked them for many years on our Web site,” Paul said. “Now it’s time to get those in the store, because it’s a different mindset now."

Systemax also is continuing to weigh options for expanding its Circuit City brand business. CircuitCity.com recently established a link through Amazon.com’s Marketplace, marking the online retailer’s return after a six-year absence. Amazon agreed in 2001 to provide Web services to Circuit, but the companies parted ways four years later as Circuit brought the Web business online.

Systemax acquired Circuit City’s Internet assets out of bankruptcy for $14 million in May 2009 and relaunched the website. Traffic to the site has dropped in recent months, and Systemax is considering “alternatives” for the site to help boost flagging sales, company officials said (CED Nov 16 p1). In addition to making CircuitCity.com available through Amazon’s Marketplace, Systemax launched sales of a Circuit City brand wireless speaker system ($79) through TigerDirect.com. The single speaker features a built-in tweeter and woofer and is packaged with a transmitter that contains a docking station for an Apple iPod/iPhone.

"There seems to be a group of people out there with an affinity for the brand” who want to continue buying products through Circuit City, Paul said. “We have a seen a lot of interest in Circuit City consumers about buying music and they seem very focused on media. The speaker was already under R&D for OEM distribution so we thought it would make a good fit” for the Circuit City brand.

Although Systemax opened its last three stores under the TigerDirect.com brand, the retailer doesn’t plan to abandon its co-branding strategy with CompUSA. A new 27,000-square-foot TigerDirect.com store in Vernon Hills, Ill., will open in Q1 with space for an 80-seat customer service center, Paul said. Systemax bought CompUSA’s assets, including 16 stores, out of bankruptcy in 2008. Systemax at first rebranded seven TigerDirect.com stores as CompUSA. But Systemax last year changed the name to “CompUSA Powered by TigerDirect."

"The co-branding has been very well received by the consumers and a lot of people identify that if it’s TigerDirect.com, it may be less expensive and that is what keeps them coming back,” Paul said. Paul declined to comment on whether Systemax might eventually drop the CompUSA banner from retail stores.

Systemax also has “dozens” of vendor-specific in-store displays under development for its Retail 2.0 format, said Gilbert Fiorentino, the company’s technology products president. Systemax began the program with a CA software end cap last year and added similar displays last fall for Advanced Micro Devices and Western Digital hard drives. The AMD kiosk allows customers to build their own PCs using touchscreen displays. Fiorentino declined to disclose the terms that Systemax has with vendors featured in the kiosks. The Western Digital kiosk is at the end of a store’s hard drive section. AMD’s display is near PC motherboards and graphics cards.

"You can find this a much more compelling presentation on an end cap than on a gondola with display models on top,” Paul said.