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RadioShack Alters Line For Holidays, Immediate Future

7/23/2004 12:26:00 PM Eastern

Fort Worth, Texas — As part of an ongoing metamorphosis, which includes supply chain improvements and new store prototypes, RadioShack is expanding its assortment of proprietary products and non-CE SKUs to help bolster margins and the bottom line.

The non-traditional and often exclusive, direct-sourced product lines, include educational toys, health and safety devices, executive gift-type items and unique electronics, and are designed to supplement, rather than replace, RadioShack’s core wireless phone, digital imaging, battery, accessories and subscription-based businesses.

The chain’s evolving assortment, which it hopes will raise it above the competitive CE fray, follows attempts in recent years to mount a meaningful A/V and PC offering through partnerships with Thomson and Compaq.

“We’re focusing on diversification and bringing a lot of exclusives to RadioShack, while continuing to provide basic CE needs,” a company spokesperson said.

New exclusives include a two-piece, omni-directional home theater in a box, a combination 3.4 megapixel digital camera and MPEG-4 camcorder for under $200, and a combination low-resolution digital camera and Web camera that can retail for under $10 (see story, right). Products outside the traditional CE sphere include a voice-recordable smoke detector that issues personalized escape instructions ($69.99 retail), and an aromatherapy sleep machine that emits calming scents and sounds ($29.99 retail).

Some of the new SKUs are in RadioShack stores now, although most will ship in September and October as both seasonal and regular additions to the assortment.

Interestingly, Circuit City, which had shown an interest in novelty electronics through an in-store partnership with The Sharper Image, is now following a similar, though less expansive, strategy as RadioShack. Its recent purchase of InterTAN, the Canadian retailer which licenses the RadioShack name north of the border, was designed in part to leverage that company’s direct-sourcing capabilities in order to add Circuit City’s own proprietary “electronic gadgets” to its merchandise mix.

The first fruits of that effort are expected to roll out this fall.

But Circuit City’s superstore footprint can more readily accommodate additional classes of merchandise than can RadioShack’s diminutive shops, a dilemma that’s certainly not lost on the latter.

“Our floor plan challenge is how to make room for new product lines while maintaining existing ones,” acknowledged Douglas Scott, RadioShack’s VP/marketing. “It requires ongoing assortment planning and constant review using strategic guidelines in order to have the broadest assortment and be competitive in the marketplace,” he said.

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