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RadioShack To Close 1,100 Stores
wjcofkc writes "The decline of RadioShack has been painful to watch, and now CNN Money reports that they will be closing 1,100 of their stores, totaling 20% of their brick and mortar presence. RadioShack has also publicly admitted its current stores are out of date and in need of a massive overhaul. But the number-one culprit has been a continuous slide in sales down a steep slope in the area of mobile device sales. A few years ago, in a bid to expand its customer base, RadioShack made a bid to return to its roots as a hobbyist electronic components retailer. Apparently the extra traffic hasn't been enough to make up for their failings. The article mentions that some of their stiffest competition is coming from online retailers. The big question is, in order to ensure their survival, would RadioShack be better off continuing to phase out their brick and mortar presence while making substantial efforts to expand as an exclusively online retailer?"
There isn't a place for a Radio Shack that won't commit 100% to being the hobbyist shop they started to be, or an online retailer that isn't just a smaller version of Mouser or DigiKey. We already have little rat shacks everywhere on the Internet that sell soup-to-nuts, we need a retailer that is passionate about their place in the market. You can't beat the big boys on price - they can always undercut you, and if needs be - they can give product away for free until they drive you out of business. You need to be able to provide service and product that the larger competitors can't or won't - so far, Radio Shack doesn't seem to be able or willing to do it.
Radio shack has always been one of those stores I walk into looking for parts and come out realizing I'm only getting it online and I have to wait a week. What they should do is repurpose the stores to become what they always should have been, a hacker haven. Fill it with knowledgeable people who know how to make custom electronics, and foster people who want to build things but don't know how. Problem is... its just too late. Would be cool to see someone like sparkfun or something buy them and do something like that.
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The big question is, in order to ensure their survival, would Radio Shack be better off continuing to phase out their brick and mortar presence while making substantial efforts to expand as an exclusively online retailer?"
Not likely. They have no particular advantage in the online space aside from a recognizable (if tarnished) brand name. What they really should have done was to expand their catalog sales back in the day and become a distributor like Digikey or Mouser. I suppose they still could though they are behind the curve. They've gotten into cell phones but no one really thinks Radio Shack when they think cell phones. They sell batteries but there now are specialty battery stores that usually have a better selection and better prices. They don't have the scale or the expertise to compete with Amazon online and they are too unfocused to have profitable retail space. I can't really think of anything where Radio Shack would be my preferred shopping destination.
Radio shack has been trying to be all things to all people and when you do that you don't serve any of them well. They have expensive real estate, small square footage, small selections of products, high prices and unclear strategy. Their advantages are that they are fairly well known and have a lot of storefronts. That's a pretty thin advantage these days. I'm thinking Radio Shack might be a pretty good stock to think about short selling.
I'll have you know, sir, that my brother-in-law is a COLLEGE dropout selling cell phones at radioshack!
I think convenience is the one thing brick and mortar stores have going for them. I sometimes buy things at the local gas station. They are more expensive there, but they are a lot more convenient.
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Radio Shack is already 100x bigger than that niche could ever support
And, having been around and watching in the 1970s and comparing to today, I wouldn't be surprised if the hobbyist electronic niche is 100X time smaller today than it was then.
I was once denied a job at Radio Shack because I had been trained as an electronics technician. It was explained I knew too much about electronics and they didn't want me talking electronics with customers. The manager said they were trying to move the company away from that.
Radio Shack just makes me cry when I go in there now. Having one small cabinet with nothing more than about a dozen different resistor values and toggle switches priced at $8 a piece is not a "return to your roots"
When Radio Shack was doing well they sold some of the best, and even most unique Stereo equipment you could find. The first surround sound I ever heard was in a Radio Shack and that was a good 5 years before I saw it anywhere else. I could take in a parts list and the clerk would tell me to come back in a few days and he'd have my order ready.
There IS a market for Radio Shack and they could do well, but they need to get out of the mall where rent is so high and start stocking real stuff again. How about offering project boxes with custom silk screen or etching right in the store? I'd pay $100 - $200 for such a service. How about an array of knobs and such to make your project stand out? 3D printers and supplies? Arduino supplies... how about workshops on coding for them? Come on, this isn't that hard.
There's a strip mall near me and all within about 5 blocks you can find Woodcraft, Harbor Freight, Northern Tool, Home Depot, AutoZone, Hobby Lobby and a fabric store. THAT is where Radio Shack needs their store... not next to Bannana republic for gods sake.
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Blame the MBAs. Every time they take over a niche business, they want to turn it into the business model of the largest generic vendor out there. The Science Channel is no longer science, but looks like every other cable channel. Mini wants to sell bigger and bigger cars. Radio Shack is no longer electronics bits and pieces, but wants to be every other electronics vendor. A successful small business is never enough. The greedy buggers only care about their suicidal rush to the top.
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The hobbyist niche didn't fully support them in the old days either, with something like 80% of retail revenue coming at Christmas time and Radio Shack selling a ton of RC toys and such. Other times of the year, non-geeks looking for cables, adapters, etc. were a major market for them. Their slogan "you've got questions, we've got answers" was accurate - their employees got raises for passing tests in various fields, so they would have the answer. Any average Joe could come in saying "I want to hook both my DVD player and my game console to two TVs ..." and the Radio Shack employees would steer them to the products they needed, cable, A/B switches, etc.
For the niche that defined the brand, that's still there, it's just shifted a little bit. The same guys, like me, are still interested in similar stuff. It's just shifted from ie short-wave radio to 3D printing. If each Radio Shack location (or some of them) had a 3D printer in the store, that would bring traffic from the same people who used to buy resistors and antennas there. We're not building homebrew computers anymore, but we sure might want some servos to hook to our Raspberry Pi.
Video game stores aren't still trying to sell Atari 2600 games, but they haven't changed too much - they are just selling the new games. Radio Shack could do the same. Not by selling (only) the same resistors they sold 30 years ago, but by adding what today's geeks want, stuff for rPi and microcontroller systems, and whatever else is most popular on makezine.com.