R’Shack Outlines Go-Forward Strategy
By Alan Wolf -- TWICE, 2/24/2009
Fort Worth, Texas — RadioShack will "burnish" its brand, add more private-label programs, and continue to improve productivity and performance under its 2009 game plan.
Despite weak fourth-quarter results, chairman/CEO Julian Day told investors during an earnings call today that the chain made significant operational improvements in 2008, and that sales have picked up since December.
To keep the momentum going through the new year and beyond, the company will break a new ad campaign in July that leverages RadioShack’s rich heritage while "clarifying its positioning" in the marketplace.
"The brand needs burnishing," said chief marketing officer Lee Applbaum. Although "RadioShack" wouldn’t be his first choice if the chain was launched today, he said, "the name itself isn’t a significant barrier … there’s lots of brand equity in ‘RadioShack.’"
Indeed, the company has launched a new, albeit fledgling, chain, and has given it the very un-RadioShack-like name of PointMobl. Executives wouldn’t comment on the three-store experiment, except to say that it is an exploration of different ways in which to present the company’s assortment.
That assortment will expand in the coming months as RadioShack rolls out three new private-label A/V and power accessory brands, with two expected in the second quarter and a third in the third quarter. Merchandising executive VP Peter Whitsett described the new additions as "national brand equivalents" that, along with the company’s Gigaware badge for music, gaming and mobile accessories, will comprise a "reinvigorated portfolio."
Another cornerstone of RadioShack’s assortment will be the rapidly growing netbook category. The company hit pay-dirt with its Acer Aspire One promotion, which offers the 3G unit for $99 with a two-year AT&T contract, and Whitsett said "mobility has never been more important" to consumers and RadioShack.
"We are well-positioned to bring solutions and products together given our experience in mobility," he said, and the company is launching new initiatives, sourcing abilities and supplier relationships to maintain market leadership.
The company has also enjoyed a strong resurgence in its post-paid Sprint and AT&T wireless businesses, he said, attributable to better sales training, fresh product, and a new display format that accommodates more handsets and more live models, said store operations executive VP Bryan Bevin.
Asked about competition from Best Buy’s new in-store and stand-alone Mobile concept, which has been gaining significant market share, CEO Day said "Best Buy is a great operator … but [the share gains are] not coming from us. There has been no negative impact."
Day added that while the economy will be a challenge to all in 2009, RadioShack is focused on those things that it can control, including inventory and markdown management, cost controls and improved store-level execution that can result in higher customer satisfaction and conversion rates.
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I worked at Radio Shack during the "glory" days of the late 1970's and early 1980's. The Tandy Scholarship paid my tuition at TCU while I worked at the store by the skating rink at Tandy Center, thanks to Charles Tandy. Our products were quality; the cables and accessories were well made, and the TRS 80 was before it's time. Our fellow employees were well paid. We all KNEW the business: hi-fi enthusiast, shortwave radio, wiring, connections, etc. In my small town in East Texas where I started, customers KNEW where to come to for HONEST information on how to put up outside TV antennas without all the high profit needless add-ons. Could you go back to those principals? Get people who are "into" the business of electronics and give people honest answers to questions regarding Diamond-Gold -Platinum wrapped hook-up cables and Super Power Conditioners that must be used to get HD signal on that new LCD set? Could they become a neighborhood store again when someone needs help with their electronics? Could they sell quality cables, batteries, that are reasonably priced? When I was there, we made our first stab at video (with RCA) and it was unprofitable right from the start. Radio Shack was never a TV store!!!
J Grigsby - 2009-25-2 12:24:00 EST -
Hey, John (the first commentor)- You're absolutely right, but take it a step further. The New Guys have forgotten the core customer of the Shack, and just like Nextel, have lost them completely. This started before the current set of New Guys, almost before Dave got in there (for a minute). But unlike Nextel, RadioShack is capable of doing something different, albeit only slightly different.
Which leaves the $20m dollar question: now what?
I wouldn't want to be Julian Day. But he pulled a rabbit out of a hat for K-Mart; let's hope he can do the same for R'Shack.
Jeffrey M Rothbeind - 2009-25-2 12:17:00 EST -
Who Cares? die Already? so you, my fellow poster are FOR More economy down turn? thats what it sounds like to me.. I dont know how many people are on staff at Radio Shack.. But i am sure its 30K +, not to meantion all the store fronts they lease, that would cause an even bigger ripple effect on the local shopping centers and malls. just think of all the tax sales that this company generates for all the local cities they are in...so for you to say who cares die already, makes you out to be a anti-American! todays economy is suffering enough with out more negative puke coming from your mouth. So do us all a favor and keep your comments to yourself, since it seems to be nothing but negative garbage. go back to russia you commie b@stard
Michael - 2009-25-2 09:57:00 EST -
WHO CARES, DIE ALREADY...
Brad Anderson - 2009-25-2 09:23:00 EST -
Radio Shack once enjoyed a brand loyal collection of customers who have been eschewed by those who have made a concerted effort to destroy the company in their theory of "what was, was not good enough so let''''s redo it". Folks, Charles Tandy was not a dope nor Lew Kornfeld!
Unfortunately these guys and gals running the company haven''''t figured that out yet! For 20 years I watched this once incredible brand shoot to it''''s apogee only to crash as the boys from "outside" the company came in with all their great ideas but stood there looking on while the whole thing crashed around their feet. Yes the sky has fallen chicken little''''s.
Now the present crop of outside management are standing there with their heads down stamping on the ashes hoping one of the embers will reignite while muttering what happened?
Contrary to popular belief of the current MBA crowd it does pay to occasionally look backward to see what worked!
John R. Hofmann Sr. - 2009-25-2 07:54:00 EST
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