Nobody seems to have a good answer for what RS should become to avoid shutting down. The most common answer is to go back to its roots and embrace the maker market and stock up on things like 3d printers, breadboards and arduinos. I think this is the wrong idea, since the market is nowhere near large enough to support the vast amounts of stores RS has.
I think if I was the CEO, I would focus on being a boutique shop for neat stuff. Kind of like a brookstone for electronics. They would have google glass, nest, wearables, smart home stuff. They would have things you cant buy at best buy like high end headphones and microphones. Not only that, but it would have knowledgeable staff who could tell me why I should go with the Denon headphones and the Fiio amplifier and skip the sonys. Broadly, alot of the type of stuff you see on kickstarter would feel like their inventory.
Yes, you would have 3d printers and filament in the store also, but the new RS store would not revolve around that- It would be there because it was 'cool'. I would much rather see way less capacitors and fuses and more fuut hammocks and 4th design titanium iphone cases.
But you would also see high end stuff you normally cant buy in best buy because its too expensive to have the inventory floated to all their stores. There is a surprising amount of laptops that are 'too high end' to ever show up in BB and only rarely appear in microsoft stores. That is also the case with audio equipment in spades.
"But you would also see high end stuff you normally cant buy in best buy because its too expensive to have the inventory floated to all their stores."
While I admire what you came up with there are 2 big problems working against this:
First, I can buy nearly all the high end stuff you list at my local Best Buy. Beats by Dre, Bose, Nest, iPads & iPhone 6+'s, Flagship Samsung phones/smart watches, Thinkpad laptops, high end receivers, etc. Some of the pro audio stuff (amps, mics, etc) isn't top-top, but for that honestly you are better off at a music equipment stores. So they would have to go uber high end, and that's just not going to happen with their current brand image. That market is also insanely small and needs a correspondingly small footprint. Even closing 90% of their stores may not be enough.
Second is store size and location. Best Buys are enormous. They can have the high end glam to get people in the door, and still have room for the mid grade consumer stuff most people buy. These stores are larger yes, but rent/square foot are way cheaper than a little 1000 - 1500 sq ft Radio Shack. Street frontage and site location are terrible for radio shack. The closest one to me in Atlanta is sandwiched between a UPS store and a nail salon, at the very end of a strip mall with a grocery store as an anchor. Foot traffic must be terrible.
Boutique might could work, but a huge number of tiny retail shops are a giant albatross around Radio Shack's neck.
Here in the UK, Maplin Electronics are debt free and profitable with a fundamentally similar business model to the old Radio Shack. Piles of radio control cars and weather stations at the front of store, cables and miscellaneous electronics accessories in the middle, components at the back. Maplin thrive on their lack of focus - you go there when you need a Lighting cable or an RJ45 faceplate, and you leave with what you came for plus something you didn't know you even wanted.
It seems to me that the only real difference is the quality of management. Maplin were struggling in the 90s, but were bought out by a private equity firm who turned the business around. There were no radical changes in direction, just a lot of incremental improvements to their core business.
I think that Radio Shack have far too many stores, and the management is fixated on finding a silver bullet for the company's woes. The complaints I hear about Radio Shack seem to be mainly issues of basic merchandising and customer service - their stock is erratic and outdated, their staff are indifferent and poorly trained. If your basic pitch is "we know you can buy this stuff online for less, but we offer convenience and service" then you actually need to follow through on the latter.
While this is a cool idea for a store, does it really fit with the assets that Radio Shack has? Here's what I see they've got to work with:
- lots of retail stores in crappy locations. There's no way I'll hear the difference between a Grado and a Sony when the juicer at Orange Julius is echoing down the hallway. It would be perfect for 3d printers, though.
- Cheap, non-committed workers. I'm not sure it would be worth training everyone there how to use a 3D printer if they only stay there a year. Also, not everyone there would be able to sell hifi; definitely not better than the blue-shirts can.
- A good supply chain of custom-branded products. This used to be their bread-and-butter, but no one wants Enercell batteries anymore.
- A brand name that has been diluted. I know Brookstone is great for craptastic stuff, but it would take a lot to re-educate people on the new RS.
I think the point is, there current business model of catering to low end clientele is NOT working. They need to reinvent themselves and this is what I feel has the most legs of keeping them alive. The margin for high end goods is much more palatable than selling power strips.
The long and the short of it is, RS needs to radically change everything about themselves and go for broke. Trying to do slow changes while holding onto a legacy business will just leave them in a situation like compusa.
Right. So close down the legacy business and start something new. Whether you do so within the existing corporate structure is for the lawyers and investment bankers to decide. Pop quiz: What's Woolworth's these days?
Isn't that the case with 99% of retail? I'd think any executive that proposed paying retail workers a living wage with predictable hours would get fired as a traitor in the War on Employees.
Yeah I worked there in the early 2000's for maybe 6-8 months. It was miserable. Having any technical knowledge or interest in learning new things was zero help at all. All they cared about was how many new cell contracts you sold and as this was the only way to make more than minimum wage, we were quickly broken down and begrudgingly pushed those contracts and upsold those extras.
The whole place was terribly hostile to employees and we actually had to drive out of town once a month for "sales meetings" where a bunch of middle management patted each other on the back and talked about the new acronyms for whatever their current dipshit strategy was to squeeze a few more points of growth onto this month's charts.
The risk is that it could become an expensive immersive 3d catalog for stuff you could buy online for a fraction of their prices. It would need some sort of exclusivity deal with several high end brands to be viable.
> Nobody seems to have a good answer for what RS should become to avoid shutting down.
Sell Teslas?
Make their own e-car and sell those? They have Tesla as an existence proof, so they don't have the risk that Tesla took. And they could probably license Tesla IP.
Maybe they could be the down market e-car. And with all those retail locations, maybe they could replace batteries, or charge batteries, or even swap out your whole car. "My battery's dead, gimme another car."
Go the Brookstone way? Did you see what happened to sharper image?
Their main asset was brand recognition, and a network of retail stores. But that network didn't fit with what they were selling anymore.
I think a good strategy would have been to spin off the brick and mortar business and focus almost exclusively on online sales of products targeted at the maker community Arduinos, 3D printers, etc.
That would be great! Maybe even combining maker items with the Kickstarter-type hardware. Another option is to offer electronics workshops to generate value from their physical space. Also, electronics/robotics parties for kids would be interesting.
You definitely could- But that of course holds true for best buy as well. The draw is that walking into a Radio Shack could be 'cool' again. See the latest gear that just came out. If they really embraced it, it would have the same feeling as walking into a high end audio shop. RS needs to become a master of something in order to be trusted. Right now, they are focusing entirely on being a jack of all trades and failing at that
I think if I was the CEO, I would focus on being a boutique shop for neat stuff. Kind of like a brookstone for electronics. They would have google glass, nest, wearables, smart home stuff. They would have things you cant buy at best buy like high end headphones and microphones. Not only that, but it would have knowledgeable staff who could tell me why I should go with the Denon headphones and the Fiio amplifier and skip the sonys. Broadly, alot of the type of stuff you see on kickstarter would feel like their inventory.
Yes, you would have 3d printers and filament in the store also, but the new RS store would not revolve around that- It would be there because it was 'cool'. I would much rather see way less capacitors and fuses and more fuut hammocks and 4th design titanium iphone cases.
But you would also see high end stuff you normally cant buy in best buy because its too expensive to have the inventory floated to all their stores. There is a surprising amount of laptops that are 'too high end' to ever show up in BB and only rarely appear in microsoft stores. That is also the case with audio equipment in spades.
Thats a store I would go to.
I write a bit more about this here : http://harknesslabs.com/post/108193041064/how-to-save-radio-...