Photo: iStock
RadioShack’s New Owner Plots Old Comeback Strategy
RadioShack has been acquired by El Salvador-based Unicomer Group with a plan to overhaul its website and add new programs driven by its heritage in technological innovation for franchised operators.
Unicomer had become one of the largest independent RadioShack franchise owners in the world, acquiring the El Salvador franchise in 1998 and the rights to the RadioShack brands, intellectual property, and franchise agreements for all of Central America, South America, and the Caribbean in 2015.
Rudy Siman, president of RadioShack International and new businesses, franchises, and trade VP at Unicomer, told the Wall Street Journal that more than 500 new products will be added for sale online and be made available to U.S. dealers. Items will include “more end products than the stores have typically sold, focusing more on cellphone products, headphones, batteries and adapters, for instance.”
RadioShack will seek to establish an Amazon.com storefront and revive franchise development. Founded in 1921 to provide equipment for amateur ham radio operators, RadioShack now has around 400 stores worldwide, down from a peak of over 7,000 in 2003.
The former owner Retail Ecommerce Ventures, which acquired RadioShack in 2020, relaunched RadioShack last year as a crypto exchange called RadioShack Swap as the cryptocurrency market was crashing.
However, RadioShack’s return to its traditional focus on consumer gadgets and adaptors means the new owners will have to overcome the problems that led to the first bankruptcy in 2015, including heightened competition for consumer electronics from online players like Amazon and big-box stores such as Best Buy.
Smartphones have taken the place of the multiple consumer gadgets RadioShack used to sell. The influx of cheaper copycat gadgets manufactured abroad also hurt the business.
Private label offerings, including drones, headphones, radios, and adapters, were strongly emphasized pre-bankruptcy to offset the margin pressures, a push expected to be continued under the new owners.
“We will continue to offer a robust innovative product portfolio that makes the life of our customers easier, along with an extensive benefit program that adds value to every purchase,” Unicomer’s Siman said in a statement. “Our challenge is to continue innovating in both directions and remain on our customers’ top of mind.”
Discussion Questions
DISCUSSION QUESTIONS: Where do you see the opportunity for RadioShack to reestablish its retail relevance? Should the focus be on private label offerings, more on online than offline selling, partnerships with other stores, or another tactic?
Poll
Loading …BrainTrust
Gary Sankary
Retail Industry Strategy, Esri
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Details of this comeback are thin on the ground. The new owner, Unicomer, already operates Radio Shack stores in other countries and I think there is probably some potential for continued international expansion. However, a major comeback in the US will be extremely challenging. The electronics market has thin margins, loads of competition, and because the products are very similar from retailer to retailer it can be hard to differentiate. As such, I struggle to see a new pathway to success – especially in the current market where electronics sales remain firmly in the doldrums. However, I will watch with interest and reserve full judgement until we have more details.
Reviving the old and almost forgotten RadioShack brand to it’s past glory of 8,000 stores circa 1999 is unlikely. However, that’s not to say that there isn’t a place for small format electronics stores, which is what this current version of RadioShack looks like in central America. I had the opportunity to visit some RadioShack stores in El Salvador and was impressed by the tidy, well organized and well-staffed stores I encountered. Private labels, more online offerings and partnerships are all worth exploring, and while I doubt RadioShack will become a powerhouse brand like it used to be, there’s always an opportunity for well run stores.
The only positive thing I can come up with that might work in Unicomer’s favor is the fact that there is a generation of tech shoppers who didn’t experience the Radio Shack brand back when they were on every corner. I can’t see any scenario where this works in the United States. The competitive environment that caused Radio Shack’s demise is even more acute than it was in the early 2000s as mass merchants have expanded their electronics offerings.
The market for private-label electronics is small. The market for electronics components (which I do miss) is even smaller these days, no one fixes anything anymore.
I just don’t see a value proposition for Radio Shack in the United States that would be worth the investment.
With growing “right to repair” rules looming the timing is right for a Radio Shack comeback. If they really want to revive their brand they should consider partnerships to position themselves as the go-to place for gamers, tech heads and young inventors, which is an underserved but incredibly loyal community. But if they simply become another product reseller they will find the competition from Best Buy, T-Mobile and others insurmountable.
DeAnn, Radio Shack needs your input. That is precisely the strategy they should pursue.
Incorporating repair services would be an excellent strategic step, DeAnn. There are several potential acquisition targets in that sector that could bring synergy.
Assuming that RadioShack doesn’t have nine lives, they’ll need to get this one totally right. They were eaten alive by Amazon and BestBuy and their own lack of strategic direction. This time, they need to leverage the nostalgia of the RadioShack brand (including massive licensing deals) and hyperfocus on today’s growing market of DIY tech gadget builders.
Make the stores workshops with experts in a handful of specialty projects going from store to store to run free workshops and sell all the gadgets after the shows. Stick to very small footprint locations, pop-ups, and even kiosks. Again, push the RadioShack t-shirts and other gear online and in person.
Not convinced there’s a market for this? The Maker Movement and IoT as a way to network gadgets creates a viable playground for hobbyists. Arduino kits, Raspberry Pi, drones, 3D printers, audio equipment, and smart home devices are all part of the mix. RadioShack needs to stick to this core community and give them whatever they need. Otherwise, just sell the t-shirts and call it a day.
I beleive I wrote on RetailWire, more than a decade ago, when the discussion was about their struggles, that they missed the boat.
Back then, they still had a name people associated with. The real opportunity was to expand thier business to service. They could have been the Geek Squad and more. Even today, I beleive there is an opportunity to be a nationally branded service establishment. In addition to service, it is a place to sell devices unique to serious techies.
Problem with your mobile, laptop, home streaming, or anything else technical? “Go to Radio Shack”. Once upon a time, that could have been a generic response.
Why would they have an Amazon storefront when Amazon sells all the same stuff? It’s a tough one here. Maybe a store within a store is the way to go. Handy to get odd batteries there.
Whether it’s a comeback or a brand new entry into the market, I start with a couple of questions. Where is the void? What is the opportunity? How is the customer being underserved? Why have current brands and retailers left these opportunities open for a new player to even think about coming into the market? I’m not sure I see any gaping holes for a new player to step into. Who are they going to steal market share from?
Oddly enough, and counter to the brand equity baseline for intellectual property plays, younger generations who haven’t heard of Radio Shack could think it’s a new concept if done right. Pulling this off would require a radical departure from old-school gadget merchandising. There might be room for a small-format concept that targets gamers and tech makers, with repairs and strategic partnerships on the side. Either way, Radio Shack in its current state might be more viable outside the US.
Ok, I’m a sucker for nostalgia but don’t think the under 40 yrs olds will appreciate the rebirth of this classic retailer. The name, “radioshack” can be a deterrent unless they establish a clever tagline. With GAP falling back, it seems timely to re-enter the market. Best Buy is slowing, so having a go to resource for gadgets, electronics and related tech is an opportunity.
Job One for RadioShack is to change the name. Those fifties throwback vibes aren’t a good way to launch a comeback. I knew a former CEO many years ago and argued for a rebranding, but I got nowhere.
You read my mind, CK. “Radio” is so … legacy.
I love RadioShack’s enthusiasm and entrepreneurial spirit, but this will be a monumental task to revive the brand and create a differentiated experience that a shopper can’t get elsewhere. Moreover, the brand name doesn’t sync and evoke emotion with young, tech-savvy consumers. Most don’t even know what a radio is. I wish them luck, but market dynamics are not in their favor.
What’s a Radio? I think that says it all…but just in case ….The market and distribution channel for consumer electronics in Latam vs. North America are radically different. I just don’t see any green space for this concept at all.
As much as I have fond memories of Radio Shack (and still have my Radio Shack branded shortwave radio), I don’t know that there is much space for this concept today, and certainly younger folks will have no affinity with the brand. One potential approach might be repair, as well as the odd variety of parts for things. But beyond that, not sure there is a great opportunity for a revival.
They need to be more than ‘just another electronics retailer’. If they completely shed their hobbyist roots, I think they’ll fail in the U.S. They need to reinvigorate the brand and develop a strong following in the younger generation. For example, there is a big focus on STEM education, and a huge void in the market from a retail perspective. If RadioShack could become a destination for STEM classes, kits to build, run competitions or design showcases, work with schools, they could develop a strong brand following that could last for years. A differentiated experience will be essential.
The Poll seems to have left out the obvious choice: “there is no chance”
It seems incredible we’re still flogging this dead horse…let’s let poor Dobbin rest in peace.
This is a good brand, albeit it an old brand. With only 15% of the stores there used to be, there is an entire generation (or two) who have no idea what Radio Shack is. The new owner has experience with the stores. If there is a chance to resurrect this brand, This may be it.
One of my favorite quotes from the original Jurassic Park movie applies here: “Dinosaurs had their shot, and nature selected them for extinction”.
Dr. Malcolm’s quote certainly applies relative to RS; they had their shot, and as a long-time consumer electronics merchant I certainly respect what they once where. However, every retailer, and retail format, has to earn it’s right to exist by serving the needs of the consumer in some compelling way.
Please tell me what product or service that RS could provide this is not attainable from Amazon or others? What consumer demographic does the RS brand matter to?
Sorry but if you can’t answer that, you don’t have the right to exist.
I’m always one to root for the underdog but a roaring come back for RadioShack is a stretch. At best. Stocking low traffic stores with more items than usual is a head-scratcher. Even if the intent of stocking more items were showrooming, we would still be back on low foot traffic.
RadioShack has a chance to rebuild online. Stores can be part of that omnichannel strategy but there are some 1980 headwinds that simply may be too strong to overcome.
I Went down a rabbit hole while trying to download a service manual for a Radio Shack HTX 10 amateur radio transceiver and stumbled into this discussion. I was taken to Radio Shack by my father in 1959 to the Commonwealth Ave store in Boston. I was 9 years old then. I was totally blown away. I live in Maine now. I have witnessed the expansive growth of Radio Shack over the years. There was even a Radio Shack here in Skowhegan,Me. where I live As I have been in broadcast engineering, one always need small component parts to complete various projects. The was always a Radio Shack store nearby. As well as Radio Shack going away like it did, most of the electronic parts distributors are gone as well. I am sure this is also true in other countries that there is a need for electronic components other than the usual computers, cell phones and home entertainment electronics.I would like to see Radio Shack go back to it’s roots. Selling amateur radio equipment as well as other related communications equipment. The quality of the electronic components as well as audio patch cables went down hill as low end Chinese garbage was being sold. This hurt their reputation. According to what I have read there is a Radio Shack in Augusta Me., about a 40 minute ride for me.I am always building various electronic radio oriented projects. It is my hope that this posting reaches the ears of those involved with the future Radio Shack take my advice. Respectfully, Tim