R'Shack, Tweeter Revamping Their Business Models

TWICE: Both RadioShack and Tweeter are reinventing their approach to market. What's the game plan?

Andy Berman, RadioShack: My responsibility is to identify and grow what I would call "disruptive," unique technologies related to the networked home and content. We are actively pursuing that track. We are looking out to where technology will be three to five years from today. Where can we leverage what we have in technology? Which relationships should we make more strategic, to bring the solutions to customers?

This is combined with our ability to deliver the product in, what we believe, is a unique way. Today, you can go to our Web site, plug in your ZIP code, and know which store has the stock and inventory. And our stores are accessible to 95 percent of the U.S. population within a 20-minute drive.

If you look at Amazon.com, which is more direct, and then you look at us with our physical locations, the question becomes, how do you blend those two assets together and take the positive result from that? So we are really going to leverage our 7,000-plus points of presence from a delivery perspective. We focused very strongly on the supply chain, and are seeing very strong results because of that.

TWICE: Where's Tweeter heading?

Noah Herschman, Tweeter: We are trying to move toward enhancing the customer experience. We are trying to build solutions using many different things, including hardware and software, and to put it together in a single solution so the customer will just have this fabulous experience, and not have to worry about all the stuff that goes into the sausage.

It's not really about brands, or maybe even really about products, because the truth is that new products are not necessarily being launched through our channel like they once were. Many of the new products are being launched through more of an IT-type of environment, as well as through Best Buy, which has done a fabulous job with the new technologies. For us, we have to move up the scale and be able to do a lot more stuff for customers who are willing to pay for a lot more service and hand-holding.

Frankly, I'm surprised that there hasn't been more attention paid by CEDIA to browser-based technology, Linux- or Microsoft-based stuff. People have to start to pay attention to the fact that prices for distribution systems will begin to come down. CEDIA will have to figure out how to do computers, or they may not totally make it.

The good news is that the range of people who can afford to have the multi-room experience is going to drop from millionaires to the $150,000 income level. The number of people who will be able to afford this and want this will be much greater. Also, the Internet is bringing so much more information that people are predisposed to what they want. You don't have to start from scratch.

I think there's a lot of great opportunity for people who are willing to embrace what the possibilities are with the technology. They have to understand what their place will be in it, and not try to compete with computer margins. We could never do that, even if we had a supply-chain capability, which we are trying to get. Our stores are just too small. It would be very, very hard for us to work on iPod margins with our demo costs and supply chain issues — unless we have a master plan to sell them with a lot of other things as well.