RadioShack’s Everyday Irrelevance

Last November I wrote about RadioShack’s Holiday Irrelevance. My take was in response to RadioShack’s stated goals of increasing its relevance with consumers through a heavy-up Holiday advertising blitz. Given RadioShack’s dismal 4th quarter earnings, we now know the company’s problems extend well beyond holiday irrelevance to everyday irrelevance.

Following its disastrous earnings report where earnings fell 62%, RadioShack is planning to close up to 700 stores, shutdown two distribution centers, and fine-tune its bloated inventory.

Here’s a radical idea for RadioShack … stop trying to sell cell phones and satellite television service and start selling connection solutions for all the electronic gizmos we bought elsewhere. But that isn’t such a radical idea, is it? After all, isn’t that how most people use RadioShack? When I'm in need of some electronic component/connector the first place I go is RadioShack.

Forbes has a good run-down on RadioShack’s everyday irrelevance.

And if its everyday irrelevance isn’t enough, RadioShack’s CEO has been found to have falsified his resume. Ouch.

Comments

[johnmoore (from Brand Autopsy)]

UPDATED 2/20/06 | David Edmondson is now RadioShack’s ex-CEO following his resignation stemming from falsifying his resume. RadioShack has some major business and company culture issues to address in its turnaround bid.

[Gabriel Salcido]

I really miss the Radio Shack from yesteryear.

It was the original "Geek Squad" but without the theatrics. Their catalog was well-regarded, something like Ikea's today ("The new catalog is out! have you seen it yet?"). And they only sold their own homegrown brands.

I noticed everything started to change when they introduced cell phones, Compaq computers, RCA TV sets, and satellite TV in their stores... and at the same time, salespersons started to become quite pushy... just like mobile phone peddlers in a shopping mall kiosk.

GS

[Andy H.]

Radio Shack is doing nothing "remarkable". They are like every other store or mall kiosk selling cell phones / satelite receivers etc. Too bad. At one time when they were a source for parts (new or replacement) and offered not only the Radio Shack catalog but also the more extensive Allied parts catalog. In the past you had to pass an electronics test to work at RS I thought.

I am not sure that consumers would have a clue as to what to do with the products the old Radio Shack offered. In the old days you fixed an electronic product. Now you throw it away.
I can see RS fading away unless they begin to do something remarkable to bring customers into the stores for an experience they cannot get anywhere else.

Andy

[DA]

Get with the times people - Todays customers do NOT need tech. parts, gadgets, etc.., they need CONSUMER ELECTRONICS and that is the market RadioShack is in. RS has struggled to find the rightmix of products, but they are well on their way to be back on top with new store designs that are bright open and interactive, and getting rid of outdated product lines latter this year.

[Steve]

Get with the times? Sorry but not all of us, when we bring home a new electronic component, and discover it doesn't have the right jack for our perfectly good equipment that might have been bought as recently as five years ago, decide that we should shitcan all our other components and rush out to spend 5 grand so we can be like you, probably with the biggest, newest CONSUMER ELECTRONICS, and still living with your parents.

[RDP]

Dude the times they are a changin'. Get with them can't keep the things the same forever. Time to adapt to the real world

[NC]

The real world is some stupid show on MTV. We are talking about RADIOSHACK. The money is in the small stuff, the brandname product, and the service. The only reason BBuy and CCity seem nicer is cause they own bigger property. Radioshack offers all the same stuff , its just online.

[Wilm.Emplyee]

Radioshack Employee:In reference to your five year electronics - These things are quickly becoming obsolete. We have lowered our parts (in my opinion) because they are not in demand by the average consumer, plus they don't make our salespeople any money.Its true that baggering people with cellular phones in not the answer, but up to this point The company has left our people with no other way to really make money in our commission based system.As an employee of the company I appreciate all the parts and accessory customers, but unfortunatly your purchases aren't helping me feed my family, only the families of our corp officials.As far as our lost profitablitly, that could be summed up with arid speculation. With more and more lower margin electronics entering the market it is hard to sell these items and maintain decent earnings. (Ipod being one of them.) - In my opinion from reading this forum - people don't shop with us at Radioshack for what we would like to help them with. They just want parts and other components that most people would refer to as junk. If you find yourself concerned about what your local radioshack has and what they are doing:Call corporate and voice your opinion:1-800-The-Shack (otherwise don't complain)

[Mike Montfort]

Your comment about Radio Shack giving up cell phone sales shows a fundamental non-understanding of RS's business model. Without just two lines of merchandise, RS would be out of business. Cell phone sales and service plans. All other merch lines just pay the bills. The profit is in these lines. Do you research.

[joseph keresztes]

it is sad how radio shack changed, i used to look foward to look thru the catalog , i still have every catalog going back to 1980. i enjoy looking thru the old catalogs brings back old times, too bad.

[The Steven]

Yeah, I'm an ex-shacker too, I was with the company from '86 to '96. I worked in "11-", "01+11" and "01-" stores. I was there when the business products div. still had telephone/computer centers. I was a full timer and then later a store manager... What I found funny was that my managers didn't see the advantage when I sold $1000. in small parts rather than $1000. in audio eqipment.... It's called "MARGIN" people!

I saw computer market cycle go from 18 months down to 90 days, and then two years too late they went into custom built computers at custom built prices... If they started with computer parts in the same way they went with the "force feed" in the back of the stores, who knows where they could have been now...

So if you want to tick off a shacker, ask for a battery card and a catalog!

[ssc76266@yahoo.com]

THESHACK...sounds like a downgrade. What was wrong with RADIOSHACK? Name recognition is the key to sucess. Even CocaCola tried it and went back to the original. Somebody is trying to make a name for themself, in the meantime the entire chain could suffer.

[Rod]

Used to think RS was adecent store. Wife purchased a laser pointer for a gift. The thing failed in three months. Took it back to store. They would not replace because it was beyond the 90 day warrenty window (by 10 days). Gift was not given to me until 20 days after purchase. They just don't care and the products are lousy. Will never shop there again, and tell all my friends to avoid them also.