i3 - November/December 2020 - 9

Q

Tech
What is Crutchfield's unique
shopping proposition?
A I founded my business in my mother's basement in

1974 with only $1,000. Our unique shopping proposition
is providing our shoppers with a wealth of written and video content
supported by the professional assistance from our highly trained sales,
customer service and technical support advisors. Furthermore, we
ensure that each of our operational functions is managed to the highest degree of excellence with a laser-like focus on customer centricity.

Q What roles do research

and AI play in enhancing
your website?
A Crutchfield's website went
up in September 1995. That
was only one month after
Amazon's. At that time, we
did not know of Amazon's
existence. From our beginning in 1974, we have always
invested heavily in research.
This ranges from collecting an
enormous amount of information on each product offered,
developing sophisticated
digital marketing tools, inventing and building our robust
vehicle selector and creating
our patented virtual listening
technology. Developing the
vehicle selector required us
to collect data on the makes,
models and years of roughly 30,000 car
and truck permutations. Also, we have a
research lab managed by two PhD acoustics
engineers which developed the software for
our Charlottesville store's virtual listening
rooms and the website's Speaker Compare
app. We are developing AI and ML tools to
improve the efficiency of certain operational
functions and to enable our website to perform more like a human sales advisor.

Q Your company is known for superior

customer service. Can you talk about your
employee training program?
A We have been recognized by virtually every
rating service as providing the best customer
service in the consumer electronics industry,
most recently Newsweek. We have a very
strong organizational culture which drives our
behavior towards our customers, employees
and business partners. We also have extensive
training. Our sales advisor training program is
four months in length of which 400 hours is
spent in formal classroom training.
C TA . t e c h / i 3

i3_1120_08-10_Tech_Innovator.indd 9

Q Can you talk about some of your
retail innovations?

A We have been pioneering all along.

For our third catalog, I invented the
magalog - a hybrid between a catalog
and a magazine. Prior to that all catalogs
were strictly products, basic features
and price. I introduced the concept of
having articles and soft content and that
became the world's first magalog in April
1975. Other companies like Patagonia and
Lands' End have used that format. We are
an information company and we always
have been. In the old days - we provided
information through our catalogs and our
sales advisors. Now we distribute information with ancillary printed content but
mostly through our website. Our expert
sales advisors take questions by phone,
chat or email. We are so fortunate that we
launched when we did because we had a
real head start in this business. We have
very smart people on our ecommerce
team that implement all of the state-ofthe-art best practices.

Q How have you led in sustainability

including biodegradable packaging?

A Our customers see this as another way

in which Crutchfield is a responsible corporate citizen. But we have been ahead of
the game on sustainability and environment issues since almost the beginning. I
started the design work in 1977 on our first
building at this site. It was the first passive energy efficient building in central
Virginia. It is mostly underground to keep
it cooler in the summer and warmer in the
winter. Since then, as we have built new
buildings, they have all been designed for
energy efficiency.

Q What challenges did your company

face with COVID-19?
A Like virtually all online retailers,
Crutchfield experienced a huge surge of

orders when the lockdowns began. The
number of contacts to our customer
service, technical support and product
advisors quickly overwhelmed our
ability to provide Crutchfield's exceedingly high level of service. Additionally,
added stress was placed on our distribution center employees due to our
strict COVID-19 protocols. In response,
I directed our marketing department to
temporarily stop our digital advertising
to reduce order demand. We also took
actions to make our website and contact center operate more efficiently.
Since then, we have been managing
the business based on service levels
and not on potential profitability. As a
result, we have literally left an enormous amount of net operating income
"on the table" this year. To me, this
short-term sacrifice is an investment
in the long-term sustainability of our
outstanding franchise.

Q Are you experiencing any supply
chain issues as a result?

A Yes, but this is to be expected con-

sidering the enormous disruption to
supply chains throughout the world and
considering the time that it takes for
them to fully recover. Fortunately, our
ability to inventory large quantities of
merchandise has somewhat mitigated
this problem.

Q Do you think businesses will start to
operate normally again soon?

A I don't think that businesses will oper-

ate normally until we have a proven vaccine. Until people are confident that the
vaccine is working, life might get better
but it's not going to get back to normal.
We also have the concern on whether
there will be a second wave of the virus
this winter combined with the seasonal
flu. It will probably be next summer
before we start seeing normalcy and
we won't be totally back to normal I
suspect until 2022.

Q How is technology changing the
retail experience?

A We are in an era where technology

is changing virtually everything in life.
Retail is no exception. Retailers who
don't appreciate this paradigm shift
will suffer.
NOVEMBER/DECEMBER 2020

9

10/20/20 2:35 PM


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i3 - November/December 2020

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i3 - November/December 2020 - Cover1
i3 - November/December 2020 - Cover2
i3 - November/December 2020 - Contents
i3 - November/December 2020 - 2
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