RadioShack Tests Concept for Mobile Devices

Feb 20, 2009

By Tom Ryan

RadioShack is testing
a new concept in the Dallas area focusing on wireless devices and services.
PointMobl stocks each mobile category – from compact laptops and MP3 players
to smart phones and GPS systems – in more depth than a RadioShack, but
makes no mention of its affiliation to the parent company.

"It’s not a RadioShack
store or even an extension of a RadioShack store,"
Phyllis Proffer, vice president of investor relations at RadioShack, told The Wall
Street Journal
. "We brought together a team of dedicated mobile
industry veterans and they defined and developed the concept based upon the
trends we’re seeing in Europe and other parts of the world."

"Most importantly,
it really addresses the needs of the customers as it pertains to wireless
mobile devices, services and accessories," she said. "People
want choice."

While the same size as
a typical RadioShack, its white fixtures, clean glass and sleek design
further differentiates PointMobl from its parent’s chain. PointMobl’s wireless
carriers are the same as RadioShack’s: T-Mobile, AT&T and Sprint. PointMobl
also features "guides" that help set up and troubleshoot new
mobile devices.

One PointMobl employee
speaking to the Journal described the store as "98 percent
playground," with wireless phones, lightweight laptops, GPS systems,
digital cameras and iPods set up for customers to try out and compare.

According to The Dallas
Morning News,
PointMobl could be a way to compete with stores from
AT&T and other carriers as well as Best Buy’s expansion into the
mobile category. More than one-third of RadioShack’s business is in wireless,
but the company has been losing market share.

Michael Pachter, analyst
at Wedbush Morgan Securities, said that while it’s a challenging time to
test any new initiative, PointMobl could be a
higher-margin concept.

"If it works, selling
smart phones and all things portable is a higher transaction than RadioShack’s
average," said Mr. Pachter.

Discussion Question:
What do you think of PointMobl and the potential for stores focusing
on mobile devices and services? Do
you think it was smart for RadioShack to hide its affiliation with PointMobl?
Do you expect that the store personnel will be up for the challenges of
serving these demanding customers?

Please practice The RetailWire Golden Rule when submitting your comments.

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8 Comments on "RadioShack Tests Concept for Mobile Devices"

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Kai Clarke
13 years 2 months ago

This is a great concept by RS. However, the true question is whether they can make money doing this, even in a reduced footprint. Additionally, they have to use their purchasing power to get the necessary SKUs that this store requires and make these viable in this limited format. Only time will tell if they can make it work, even on a limited basis.

Ben Ball
13 years 2 months ago

The thing that struck me was the PointMobl employee’s quote that the store was “98% playground.” If PointMobl replicates the Apple Store strategy of experiential retailing, it will be a winner. Who doesn’t love to play with these devices? And to play is to love. And to love is to lust. And to lust is to own!

Smart idea to keep RadioShack out of this too. Much as they try, and they have made some great efforts, I’m afraid RadioShack is still “your father’s electronics store.”

Cathy Hotka
13 years 2 months ago

Consumers love all things mobile (my local AT&T store is always standing room only) and a chain devoted to mobile may well be a hit.

Creating a fresh brand is nothing new–many shoppers probably don’t know that White House Black Market is owned by Chico’s, or that Home Goods is owned by TJX. Let PointMobl stand or fall on its own.

Doug Fleener
13 years 2 months ago

I think it makes sense to stay away from the RadioShack affiliation so the store can pull in customers without any bias. I think this is especially important since so many young people might see RadioShack as the store their clueless parents or grandparents shop for electronics.

With that being said, it is an extremely crowded space that is ripe for innovation and differentiation. What we don’t need is another wireless store that shows and sells like every other retailer, even if they do have more products on display.

Hopefully they’ll create a highly engaging and differentiated experience. If they would do that then they definitely want to keep the RadioShack connection away far, far away.

Doug Meacham
Doug Meacham
13 years 2 months ago

This concept may provide an alternative format for many of RadioShack’s existing store leases and could help generate initial revenue in the short term. While that idea seems appealing, it is not a differentiated strategy that can be defended over the long term. The mobile carriers all have significant presence in this size footprint and it would be extremely easy for them to expand their product offerings to include a similar product mix. The only real differentiation here might be in the ability to offer multiple mobile carriers in one store, but that’s not unique either.

Joel Warady
Joel Warady
13 years 2 months ago

We like retailers who are willing to try something different. And RadioShack is smart to hide their affiliation with this new concept. RadioShack has an old-fashioned heritage, and most Net-Gens see the chain as stuffy, geeky, and a bunch of transistors. So having the RadioShack name would only hurt it.

All that being said, I’m not sure how this new concept differs from Best Buy’s mobile phone store concept that they have been rolling out. It seems that this new RadioShack concept is another example of a chain playing catch-up by rolling out a “me-too” strategy. We are over-retailed as it is; the last thing we need is another chain that is identical to a chain that already exists.

It will be difficult for this chain to gain successful momentum.

Phil Rubin
Phil Rubin
13 years 2 months ago

On the surface, this appears to be a smart move for RadioShack. Wireless has always been a huge business for them and creating a concept more focused on all things mobile that includes a strong customer experience will be different than many of its competitors, including the carriers’ retail offerings.

Anecdotally, I was in a wireless carrier’s store the other day and, in the midst of my very marginal experience, noted two other customers (within a 10-minute period) having experiences even worse than mine. Between their experience in the space and the relatively low bar set by most competitors, RSH should be able to win here.

Jeff Hall
13 years 2 months ago

I applaud RadioShack for having the courage to test a bold new retail concept, especially in this economy. Given their sizable store network, success with PointMobl could serve as a model for transitioning certain existing locations into something more relevant with today’s consumer.


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