This is a preview of the Teach or Take series that will be ongoing in Hustle Space upon launch. In the Teach or Take series we look at existing stagnant business operations and either teach the status quo or provide the information for someone else to take and run with it. In this preview episode, we are going to look at Radio Shack.
Let’s set the record straight – in me and my crew professional opinion, Radio Shack is the worst piece of work of all the retailers we seen worldwide. What makes Radio Shack the absolute worst is Radio Shack can easily turnaround only if they make extreme bold moves but to be honest, you not going to get corporate cats with a salary and parachute package to make bold moves. I seen the moves with the concept store and the PCH partnership but it may be too late for Radio Shack as they got less money than a Powerball ticket in the bank. But if Radio Shack cannot be taught, this is actually a great opportunity for someone else to take. Okay, let’s get into it.
Radio Shack
When small consumer electronics became the hot thing during the 1900s, it was Radio Shack as the commercial place to find everything from electronic parts to a Realistic brand television or CB radio or Tandy computer and cats be in your crib laughing because you got Tandy and not Commodore and you got Realistic instead of Pioneer. But we are in the 21st century today and Radio Shack has been a struggling operation that has been on everybody corporate dead pool list since the dotcom 1990s.
Everybody on the Internet can tell you what’s wrong with Radio Shack and why they may not last but from our research these are the main things killing Radio Shack right now.
Inventory. Radio Shack appear to hold on a lot of inventory and that means they are buying things upfront. This is how all brick and mortar went out of business the past 20 years like Borders bookstore and Blockbusters thanks to the growth of e-commerce and digital media. Inventory is expensive but what’s crazy is the inventory items Radio Shack keep in their store may never sell or take longer than 3 months to sell that item.
Wasted Real Estate. It appear Radio Shack is taking care of this in their redesign but what bothered me is Radio Shack has these cabinets filled with LED lights and switches and other microprocessor stuff taking up a good amount of real estate in their store. I believe in retailing there is a metric that determine sales per square foot and the goal is to have a high amount of sales per square foot. For the square footage of those LED lights and switches cabinets, they are not making the sales to justify the existence/presence of this stuff on their sales floor.
Boring Low Margin Products. The stuff Radio Shack have on their shelf, I’m not trying to hop in my car to run out and get. Radio Shack does not have anything I want that I cannot find on the other side of Wal-Mart when I’m shopping at Wal-Mart. In the mall, I’m hanging out at the Apple Store or Game Stop when it comes to electronics, it’s simply not cool to be in Radio Shack. So Radio Shack does not have any “it” products that is exclusive and I cannot get off the Internet. And that’s the problem.
Asking for My Information at Checkout. This is also why I refuse to shop at Toys R Us, I don’t need anybody asking me for my zip code. In fact, I remember at an early age saying I will never shop at Radio Shack again because I bought a pack of batteries and the guy kept asking me for my zip code and I refused. That’s bullcrap for any retailer to ask a customer for a zip code and whoever justifying that practice need to be identified and fired for that crap.
The Solution
If me and my crew was in charge of the turnaround, our focus would be take advantage of Radio Shack as a micro-format store that is located in busy foot traffic areas. Micro-format is what everybody is trying to get to but Radio Shack has been there all this time but have not taken advantage of the micro-format model. And here is how we would take advantage of the existing micro-format model at Radio Shack:
Close Suburbia Locations, Convert to Pop-Up. The only Radio Shack I would keep only and keep a lease is where foot traffic is crazy like New York and other big cities. I would shut down all suburbia locations immediately, the ones that are situation in strip malls around Wal-Mart. In the suburbs, trying to compete with Amazon, Apple Store and Best Buy in the suburbs not good business. What I would do is what Toys R Us is doing successfully and that is open only during the holiday shopping season as pop-ups. Toys R Us is winning releasing news they hiring temp workers every late fall and opening up shop in suburbia. I would do the same thing and think that is the best strategy for consumer electronic retailing.
Replace the Point-Of-Sale. I believe Radio Shack point-of-sale system is the core inefficiency of their whole operation. I saw the little PIN pad and printer in the concept store photo above, but believe they are still connected to their old point of sale system. If Radio Shack had an effective point-of-sale, data would have changed their sales floor strategy a long time ago and they wouldn’t be in the position they are in right now. I would focus on a new from the ground-up point of sale that accommodate omni-channel from ordering online to ordering from mobile to ordering in store and move products from one store to another. The point-of-sale should quickly tell a business how the money is coming in, what products are moving and what locations are good earners.
Destroy The Space Waster. Radio Shack most offensive attribute is all of the space waste in the store. The wrap counter should be immediate destroyed as it take too much space and reclaim that space for product displays and touchpoints. Sales associates use mobile and tablets and walk the floor assisting consumers. The product shelves with inventory on the floor should be destroyed also and I would move them to a security cage in the back with only a display product. I believe this is killing Brookstone and also killed Sharper image was the cluttered bulky retail fixtures where you cannot walk around with an open air. Apple figured it out as well as AT&T Store in their use of minimum fixtures.
IPTV/Touch Screen Kiosk. I would mount 42” touch screen monitors on walls the front of the store and serve two purposes as digital signage and interactive touch screen. These displays will be touchpoints for walk-in customers to quickly look up endless aisle inventory online for ship-to-store ordering. I would have sales associate use the touch screen with a consumer to create a basket solution adding a TV and have the display show optional items like RCA jacks to add to the virtual basket. Then the last screen is a QR code either the salesperson scan to complete checkout or the consumer scan to visit the Radio Shack web site.
Focus on Lifestyle. 21st century micro-format should focus hard on lifestyle instead of being a micro-inventory store. That means creating the store to focus on digital lifestyle and that means selling everything for it and that is where Apple is winning. Have a section full of gift cards to activate for holiday season and quick gifts. Have a section on headphones and Bluetooth speakers and not that one-person-per-use demo speaker wall. Fitness and wearable tech need mannequins and should not be just shelving material. And most of all, hospitality elements such as a place to sit, Radio Shack never figured this out.
Teach or Take
I’m going to be honest, Radio Shack is too prideful and entrenched with ego and will just probably looking to die a noble death as if the consumer marketplace care about dead retailers. But you can probably learn a lot of Radio Shack mistakes and learn how to truly do a micro-format electronic retailing operation in the hood. The goal is to transform your micro-format store into a showroom and focus on lifestyle items instead of electronic categories. I actually laughed when I was at the Radio Shack in Perimeter Mall and they had the Realistic 2-channel DJ mixer, that’s out of touch and awkward like hell!
Avoid inventory and having your cash all in low-margin items that you displaying on the sales floor. Sell only the fast movers and the other items. Pop-ups are always more exciting to open up pre-holiday and clearance sale close down after the holiday season is over. Introduce hospitality and focus only on high traffic locations. There is no reason after watching Blockbuster and Borders and other retailers fail for Radio Shack to spend one more day operating on a failure outdated brick and mortar business model. The only way you going to do electronic retailing is incorporating micro-format omni-channel clicks and bricks lifestyle flagship high density hospitality elements like the Apple Store – no other way.