Amazon Signs In-Store Pickup Deal with Circuit City

The multiyear agreement calls for Amazon to receive a percentage of the revenue for all Circuit City electronics merchandise sold through Amazon. Amazon will be responsible for processing the transaction while Circuit City will be responsible for order fulfillment and product-related customer service.

"This agreement will serve as a revenue generator for both companies," Circuit City president and chief executive officer W. Alan McCollough said.

The in-store pickup, along with an expanded selection of electronics products, is scheduled to launch in November, just in time for the holiday season, Amazon said. The companies also said they expect to expand the alliance in the future.

No Waiting

The deal adds Circuit City to Amazon's growing roster of offline retail partners, which also includes Toys 'R' Us (NYSE: TOY) and Borders Books (NYSE: BGP).

Amazon president and chief executive officer Jeff Bezos said the deal would enable Amazon to offer a wider selection of electronics products and a way for customers to avoid the days-long wait and added shipping expenses that come with buying online.

"For electronics shoppers who want their merchandise right away, the in-store pickup option is a great way for them to get exactly what they want, when they want it," Bezos said.

Market Target

Amazon is venturing further into the market for consumer electronics at a time when some of its competitors are scaling back or changing focus due to market conditions.

Buy.com, which recently announced it would be bought out and taken private, last week slashed its workforce in the face of plummeting sales. In the past, Buy.com has ranked ahead of Amazon as an electronics seller.

Also last week, Egghead.com said it would file for bankruptcy protection and sell the bulk of its assets to Fry Electronics.

Partial Marriage

Amazon and Circuit City are not merging their entire product catalogs, however. Some items will remain available for in-store pickup only, while others will remain available only through Amazon.

Circuit City has offered the in-store pickup option at its own Web site since last year.

Some analysts have questioned Amazon's decision to push into electronics sales to help fuel growth and profits in its core books and music categories, where expansion has slowed. Analysts cited the fierce competition facing Amazon -- as well as the advantages held by brick-and-click players.

Jupiter retail analyst Heather Dougherty told the E-Commerce Times in April that Circuit City's in-store pick-up gave the retailer an advantage over Amazon.