A History of Misses for RadioShack
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In my view, they made two critical mistakes:
1) The bing/G+ mistake - letting other companies set an agenda that had them relying on execution outside their area of competence. They wanted to push phone contracts and TVs like walmart, but they lack the retail space and brand recognition to do so. This transition can be made (costco comes to mind), but Radioshack bet the farm on it and lost.
2) Maliciously pricing hardware components. I say "malice" very intentionally. Things like adapters, resistors, and pots cost literal pennies coming out of China. Hobbyists will happily pay $1 for a $0.10 item to avoid sourcing it from the factory or ordering from a catalog. $8 is a different story. Going to Radioshack went from "awesome, what will I build this week?" to "man, they're really fucking me on this".
Couldn't have happened to a more deserving bunch. Radioshack's death is long overdue.
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In my (anecdotal) experience working at 2 different Radio Shacks in different parts of the country with vastly different demographics, RS didn't need cellphones (or laptops, or TVs). I would claim that the cellphone business drove away more customers than it brought in. If RS was a simple, no-hassle PBA retailer, I am convinced that it wouldn't be in the shape it is in now.
I'd say there's a third critical mistake, harvesting the customer stream and selling them an "every two years" phone which they pay for by postal mail bill and never have a reason to return to your store again and if they did you know they'd have $100/month less to spend at your store. And abandoning whatever reason the customer stream had for visiting so you will never get any new customers.
It would be like a bar forcing all its employees to do absolutely nothing other than convince thirsty patrons to quit drinking and start going to AA meetings in the church basement, and paying them a commission when the customer agrees to leave and never come back to the bar. And doing this for so long that everyone in the drinking community knows theres no reason to go to that bar anymore other than to get harassed to go to AA meetings. Hmm I wonder how long a bar managed like that would last?
RadioShack is the only retail store I have heard of, in Delaware or Maryland or southern New Jersey, that has resistors, capacitors, bread boards, etc.
> It could have been Amazon.
That is a bit of a stretch. Maybe it could have been Newegg.
Yeah it made bad decisions but along with other brick and mortar electronics stores it was competing with online stores.
You can see them trying. I guess this:
http://dit.radioshack.com/ (Do It Together)
is their attempt to attract the new maker and tinkerer crowd. That is a cool idea but it is probably too late.
Widely in stock in stores.
Now that's something they should advertise.
Possibly, the only thing in the store fitting that claim.
Not even sure its true. Went to the website and I can burn a gallon of gas and an hour of time and pay local sales tax for $89.99. We'll round that up to $100 for expenses and annoyance. I'd pay someone $5 to fetch it for me to avoid the wasted time and having to wait in line and hear all about the great deal they could offer on a cell phone, so I feel rounding up to $100 is fair.
Or UPS can drop one off tomorrow (well, worst case, Friday) for only $67.99 and ordering it takes less than a minute compared to the agony of going to RS.
So sure, I'll pay about 1/3 less to get it from Amazon.
If I have plenty of shipping time adafruit sells then for $55 (plus shipping, they hide their shipping costs deep in the checkout process so I donno and I won't shop there because I can't compare)
Digikey will match the price $55 and they're honest about shipping estimates which would be $3.22 USPS first class (maybe), or $10 if I want UPS (eh, just use amazon) And living nearby I'll get it tomorrow or Friday at worst.
Lets be realistic, I have a busy-ish day today and I can't get out to RS anyway until maybe saturday, so Prime is not only cheaper but faster, and if I had to squeeze every penny I could save another $5 or so by ordering from digikey.
No worries there.
When the first Tandy's started coming in I would spend a lot of time learning how they worked and how to program them to do things. Customers took notice of this young kid and his abilities and wanted it for themselves and their family. Over time the staff recognized the amount of sales I was generating and provided my Mom my "referral cut".
From that early exposure I may not have had otherwise, computers and technology went on to shape my life and are core to the successes I've enjoyed over the years.
While I can't speak to Radio Shacks business models, I am thankful for the shelter and education that one store and their staff provided me.
I wouldn't be where I am today without the Radio Shacks and Dick Smith Electronics shops of the 70's and early 80's .. there were many a glorious day spent, hacking away in their computer section, or talking to their knowledgeable staff who - besides being able to operate a cash machine, could also tell their MOSFET's from their NPN's and not only that: they enjoyed helping their customers. A lot of that was lost over the decades, but I really believe that there is a generation of hackers out there ready to rediscover the joys of going to a well-stocked hacker-friendly electronics shop for assistance. It has to be focused around the hackerspace scene though, because that is where the real market for electronics and technology parts lies .. and in this day and age of Internet-economies (seedstudio, lady ada, et al) there has to be a corporate culture which understands the nature of the scene: its all about the kids, yo, and in particular - the kids who would be able to repair that pinball machine and CAT-can equipment, if .. only .. they had .. the right parts.
I spoke to a very bored cashier and said, "Wasn't this store a Radio Shack before?".
"Yes!", he said "We changed the name."
"Oh. What happened to your parts section?"
"We got rid of it."
"Why did you change your name? Radio Shack must have been one of the most recognizable brands out there!"
"Well, I guess it was recognizable for the wrong reasons."
"Ooooh".
When I thought about it, the main reason I hadn't set food in a Radio Shack store for years was because the parts section had been shrinking (and becoming more neglected and disorganized) year after year. The store was gradually being taken over by either stuff you could buy cheaper elsewhere or Radio Shack exclusive junk that would break if you looked at it wrong. Instead of focusing on the stuff that at least some people need, Radio Shack focused on the stuff nobody wants.
Briefly: international Radio Shack stores were put under control of InterTan, a Tandy spinoff. When Circuit City bought InterTan, Tandy cancelled the licensing agreement to the Radio Shack name.
Bad move though, RS is damaged beyond salvage.
So ... is there anyway to reverse its course?
Well, If I'm Radio Shack's CEO, here are the facts I need to face:
1) Radio Shack cannot compete based on price or breadth of selection against big-box stores, let alone the Internet.
2) The initiative a few years ago to hire highly knowledgable staffers who could offer expert advice didn't work. It's just not economically feasible to employ people with those qualifications in a retail store, and anyway, that alone isn't going to keep the store afloat.
But I think there's still a way for Radio Shack to be a viable company; it would just require some radical changes.
Look at Build-a-Bear, across the mall corridor. The experience of building your own bear from scratch can't be replicated online. Sure, you can order a custom bear online, but kids love Build-a-Bear because they get to witness the stuffed toy's construction from start to finish. Build-a-Bear is as much an event as it is a store.
I think Radio Shack could fashion itself into something similar, but for electronics and gadgetry.
Remember those popular Radio Shack 50-in-1 science project kits? Imagine a Radio Shack where you come in, choose a project, and then build it right there in the store. A kid might come in and buy a robot kit, or a solar-powered race car kit, and they'd be able to assemble it there, with all of the tools (soldering irons, etc.) provided, and with assistance from trained (but not necessarily expert) staffers. STEM is really big in schools right now. Maybe Radio Shack could market itself as a place to pick up STEM skills, and even partner with schools.
But it wouldn't have to be limited to kids stuff. An adult might come in and participate in a DIY electronics workshop: "How to replace an electrical outlet" or "How to work on a circuit board."
Along the same lines, imagine if every Radio Shack had a 3D printer available to rent. You can upload a 3D model to its website, or choose a model in store, come in and watch the printing process, and eventually (yes, I know, it takes hours!) take it home.
With this sort of strategy, Radio Shack wouldn't necessarily need to recruit domain experts, because what would be needed is not a wealth of general knowledge, but some very specific knowledge about a relatively small number of specific projects. A highly motivated high-school or college student could be taught how to lead people in constructing the projects or running the workshops.
That is a Radio Shack I would totally patronize, and it's a strategy that shields the store from needing to compete solely on price or on breadth of selection.
Yes, they carried a lot of DIY components and had individual managers and other employees who could be pretty helpful and knowledgeable. But, mostly, they were where you pretty much had to go for cables and such pre-BigBox and pre-Internet and they had a broad enough retail reach that they were really good for that. And they complemented that with a bunch of toys and (mostly) craptascular and overpriced stereo equipment.
In other words, IMO, they were always a pretty mixed bag and were never particular havens of hackerdom. I'm sure some will disagree but I'd suggest that this is a pretty selective window into how Radio Shack made its money.
BTW, I like the DIY/Maker vision. I'm just very skeptical that it would support the type of real estate that Radio Shack has or otherwise lends itself to a large scale business plan. (Would love to be proven wrong.)
I do have fond memories of their catalogs in the 70s and early 80s.
Yes, I always, every time, end up feeling "This is a PITA having to drive across town and haul the screaming kids and coordinate schedules and park far away and burn more than an hour of my life for the privilege of paying three times as much as amazon prime for the same cable and argue with a teenage sales droid about why I don't want a $25 extended warantee in case it breaks (well, thats more a best buy thing, another place I never go to anymore). Oh and I pay $99/yr or whatever it is for prime which I'm "wasting" if I'm not using prime... I'm never going to this store again and next time I need a HDMI cable I'm pulling out my phone 24x7 frictionless and paying $3 at Amazon, not $10+ at RS after investing an hour". The next time I need a cable or gadget I think about going back to a retail store, cringe a little inside, and whip out the phone and order it online instead.
If you're into "real" electronics I live within 1 day shipping range of Thief River Falls MN (aka digikey) so I pay for cheap shipping and get it the next morning anyway, and there is a huge tigerdirect midwest shipping depot 1 UPS day away (actually less, I've paid for 3 day shipping and gotten stuff in 12 hours before, that was weird). Deal Extreme can air ship me non-UL listed fake FCC cert gray market stuff faster than I can get real stuff from California for less than the shipping from CA, which always freaks me out.
Retail just doesn't have a purpose anymore other than perishable fresh food. Its just obsolete. Like worrying about the disappearance of buggy whip manufacturers, or horse stable facilities in major city downtowns.
(whoops edited to add there is one use for retail electronics and its traveling. The only time in several years that I walked into a retail electronics store was when my bluetooth earbud got drenched in a sudden downpour and wouldn't come back to life while I was traveling far away from home, and I kinda sorta needed it for a business conference call, so I paid 2x amazon price at best buy for a replacement and was fairly happy to do so. So airports, train stations, bus stations, tourist traps.)
Not everyone has internet and not everyone has a credit card or debit card to buy online. There are ways around those like a public library for internet and a prepaid card.
It's not common to match all that but it will happen. Some people might even like holding something before buying it (pictures can't tell you everything).
This seems to boil down to people who are removed from the modern economic system are unable to participate in the modern economic system.
Another way to look at it is we strongly segregate by income, so its quite possible retail will live for a little longer in poor urban areas, although it will be doomed in the 'burbs and is already kinda doomed in rural areas.
"Some people might even like holding something before buying it"
I admit you're partially correct, my short list of "fresh produce" probably needs clothing stores and plant nurseries/garden stores. And some crafts, when I go to the woodworking store I pick thru the aisles finding just the right piece of wood for the job. Fine art, hand made as opposed to mass produced posters or whatever, is probably something best purchased in person.
In general, sure.
And, maybe, for a lot of complicated audio interconnections, a physical RS was helpful for tying your cables and connections together. I'm less convinced that's especially important today. Nor are the TV antenna displays.
I sorta agree with respect to all the various buzzer/motor/etc. stuff but those are all ultimately loss leaders--and always have been. The problem is that RS doesn't have any real cash cow business now to support all that stuff.
There will always be a 'need it immediately' market, as there will always be a 'I'm buying it here from a moral perspective', but I wouldn't want to build a business (let alone one the size of RadioShack) just on those target consumers.
Argos and the like sell toasters, watches, cheap jewellery and gardening tools, so they're not in the same market.
Farnell (and RadioSpares, Mouser, and Digikey) are primarily industry suppliers who sell components to the tiny hobbyist market as a sideline, but make most of their money elsewhere.
The real competitors now are companies like Adafruit (US) and Cool Components (UK) who caught the Maker wave and are riding it very successfully - possibly because they sell clever, useful things, and they treat customers like adult engineers, not gullible children.
Radio Shack was already a legacy company by the 1970s, staffed by the kind of marketing geniuses who come up with ploddingly dreadful brand names like 'Realistic' and 'Flavoradios.'
The UK equivalent would have been Amstrad back in the 70s and 80s - purveyors of cheaply made over-marketed consumer electronics to buyers who were clueless about better options.
Clearly, RadioShack doesn't have much of a niche any more. Buyers can get better products more cheaply elsewhere, and the hands-on electronics business has moved in a direction their management doesn't have the talent to emulate.
The online maker-shops may even be aiding Maplin in some respects, as they've helped to create and make popular new product lines like Arduino shields and RasPis which Maplin has been able to bring to the high street.
So while Maplin does have issues to face, it appears to be profitable (it's even been expanding recently) while facing similar competitive pressures to today's Radio Shack. Thus if Radio Shack is bombing in roughly the same niche as Maplin, it's presumably down to inferior management (or maybe debt load) rather than the niche itself being unviable.
A few - Maplin and maybe Argos - have a super-fast same-day delivery option, which is an interesting development. I'm guessing we'll see more of that in the future.
The big question now is - what is mall/high street retail for? It used to be the only way to buy, but when online is cheaper the rationale for spending metric crap tons of money on store rentals in prime locations is getting less and less obvious.
It's not just electronics. All retail is suffering.
There may be a niche for speedy delivery, installation and set-up of consumer electronics and white goods, because no one does an all-in-one like that, and usually you have to wait too long, especially for big items.
But I wouldn't want to try it without crunching a full business plan.
I did buy a TRASH-80 and loved it, go Zilog! Now those poor lovely old Z80 chips are stuck controlling traffic lights, which makes an old assembly programmer very unhappy indeed. I was (somewhat OT) very disheartened when I read iWoz to read how he invented the personal computer yet the TRS-80 was miles more advanced of the Apple II (and the Apple-I really didn't count as a lacked some pretty basic features such as a keyboard, monitor, and case etc) Tandy's saled dwarfed the Apple II too for several years. Yet reading iWoz he tried to give the impression that there was nothing else out there at the time.
Anyway, Tandy, Radio-Shack, their time has come and gone. Nobody cares anymore. CVS sell the same cables and hardware has consolidated, the days of lots of different cables has passed. Bluetooth and wifi technologies are eating into cables time. And Radioshack tried to charge me $14 for simple 1/8" m2m. So I bought it, while in the store, on Amazon using my phone for $2
RS need to liberate the real-estate and make way for something people actually need. As soon as they stopped selling radios I lost interest in their stores. The 19 year olds that work there these days most likely have never heard of SSB. Ask to test a transistor and they won't even know what npn or pnp means.
Good riddance RadioShack
That said, I do think Radio Shack/Tandy has come and gone. In a way, they've actually done a pretty remarkable job of at least staying somewhat relevant through all these years. But the clock seems to be running out.
Speaking as a data point of one, I certainly have headed there less and less over the past decade or so.
Look at this parts list: who's going to fill this void?
I think your link observes though that someone could put such kits together and sell them over the Internet pretty effectively :-)
You know...that's a great idea. I'd go to RS to sit through a Saturday Arduino kit class or something.
Classes are a whole other thing. You need to market them hard, you need repeat business, and if you're not running them every day you're spending a lot on retail space for a limited return.
Also, Internet tutorials. And limited interest in most of the world.
Unless you can supplement classes with a stream of high margin sales, they're not going to keep you afloat for long.
So your general points stand.
[1] a list of them, with photos of the manuals and circuit diagrams, and photos of completed kits: http://my.core.com/~sparktron/pbox.html
The DIY/Maker ideas are certainly interesting to me; I'd probably frequent such a store. Though I doubt the business model as a retail operation at scale. But converting Radio Shack to this? Existing store design/location would often not be suitable. Many employees wouldn't be suitable. The company is in financial trouble. If it's a viable business plan, why bring in the legacy that is Radio Shack?
I'm not sure how well that will work in today's overprotective environment where some parents won't even let their kids touch a pair of scissors. Whoever starts a DIY shop nowadays had better have billions of dollars' worth of insurance as well as a highly competent PR team.
I went to elementary school when they still allowed fourth graders to participate in AM radio assembly contests. Kids were expected to bring their own soldering irons and (gasp) lead. The vapors probably gave a bit of brain damage to all of the brightest kids in the class... but hey, at least nobody made a fuss about kids burning themselves (or one another) with those irons.
As some have mentioned, being a go-to place to pick up your Raspberry Pi, Espruino, Arduino, etc. and have literally all the modules and parts in stock so you don't have to wait 9 days to get it from China would be a huge opportunity. Robotics is probably going to start taking off too.
There's still hope if they bring in the right CEO/management team.
This article also explains to me why RadioShack was called Tandy in the UK
I say reluctantly because I just hate going in there. The employees are never trained on anything yet are unbearably insistent on helping. They used to ask your phone number and address for any purchase, any at all. I just returned a $10 item the other day and they would only go through with the return if I gave them an address, phone number and email address.
I shop there to pick up a quick part I need and don't feel like waiting for it to be shipped to me and they are the only game in town. I can't even imagine shopping there for a cell phone, tablet, batteries, anything mainstream. It doesn't surprise me at all that they are going out of business.
I'm old enough to remember some of the expansions they tried in the 90's (a battery store, seriously?), but not old enough to remember the cb days.
To me, going to the local RadioShack was almost always a means of last resort or a lack of patience. The store was dirty, staff was consistently rude, and the merchandise was wildly overpriced.
Slowly, the phones and other even more overpriced consumer electronics started taking over the stores and the DIY sections became nearly non-existent. Now, I shop at actual hobby DIY stores which have much better selections, pricing and customer service than RadioShack ever had and probably ever will.
RadioShack itself is dead -- management is trying to force a big box concept into a small store and just doesn't get it.
When stores ask for this, do not feel awkward about saying "Can we skip that part?"
But far and away my favorite store was the EE supply shop in the subbasement of the Steele building at Caltech. It was absolutely stuffed floor to ceiling with parts, and in a very small room. There was everything needed to build everything from stereo amplifiers to radio equipment to digital electronics.
I'm reminded of Tacoma Screw, a local chain that specializes in machine bolts and screws. It sounds too specialized to be viable, but it's a great place to get very good quality fasteners. I use them for my car, they're far better than hardware or auto store fasteners.
During those years RadioShack was the maker movement. All the stuff you see today, Arduinos, pretty much everything in the AdaFruit[1] shop, that was RadioShack then. And unlike the Internet (or Jameco, or JDR, or Mouser or MPJ or any of a number of mail order places, you could walk out and get a resistor right now and the transistor you needed to finish a project or try something out.
Several things have conspired to make that harder, not the least of which is soldering got harder, chips got more complex with less documentation, and for a long long time "kids" could care less about building stuff. Now that its somewhat cool again they don't have a good 'tech' craft store.
For a while I fantasized about starting a store chain called 'Prototype Electronics' that would be focused on just that mission. Helping people get the stuff they need at a price they can afford to make cool things. I thought it might be fun to open up 'kiosk' type stores in makerspaces where the makerspace could share some of the revenue. Such a place would sell filament for 3D printers for example, and the RAMPS boards, and something like 80/20 materials, maybe the MicroRAX line. The trick being there would be certain things you could go in there knowing they would have it, cables and such sure, but things like a stepper motor or a common driver transistor. Sadly I don't see 'Hobbyist Retail Store' on the YC RFS page :-) a lot of work for relatively small margins.
[1] One very credible path might be to take the AdaFruit website, buy enough stuff to stock 1,000 stores in towns across the country, and see how it works out.
RadioShack was never able to offer competitive pricing on anything besides cell phones while I worked there, and would frequently employ somewhat dubious business tactics when it came to pricing (permanent "sales" on many things like batteries, "sales" where the sale price was the same as the normal retail price which was only disclosed in small type on the bottom of the pricing label).
RadioShack had an employee compensation system which STRONGLY incentivized cell phone sales resulting in the infamous aggressive phone pushing. At RadioShack you were (and maybe still are?) paid minimum wage plus you received a percentage of the gross store revenue each day if it exceeded the daily sales target (a few thousand iirc), a fixed amount for each extended warranty sold ($1-2 iirc), and an amount for each phone sold (something like $20-50). At our store we never had the customer volume to hit our sales targets, and so the only way we could make money was to sell phones.
The employee turnover at my store was insanely high, and none of the employees knew anything about electronics (including myself at the time), computers, or AV equipment. This was generally OK though, as most of our customers were also not tech savvy and couldn't tell the difference. Customers overwhelmingly came in to buy AV cabling, batteries, digital TV antennas, and analog to digital set top boxes. We never sold a TV or any other high value item while I was there.
Perhaps RadioShack will be able to pivot, but if not, I don't think the world will be that worse off.
As an aside, I felt bad pushing phones and worse charging ignorant people $30 for an HDMI cable that could be had from eforcity for under a dollar, and would therefore frequently steer customers away towards Amazon for such items. This practice somewhat perversely earned me regular customers, and by the end of the summer I was running what amounted to an off the books IT support desk out of the store where people would bring in their laptops and phones and I would troubleshoot their problems for 50-100 bucks. Thanks for providing me with retail space for my small business RadioShack!
The article lost me on this point. I think Google and Facebook are trying to aggressively expand the reach of their original mission, and not acting out of fear that they will fail like RadioShack has.
Right now, if I walk into a RadioShack, their employees are incompetent in even basic DIY electronics and their selection is sad.
Hire passionate DIY and hacker type employees, and start basically operating as a retail version of Digikey.
How many times as one of us realized in the middle of a build that we need a .2omh resistor and we concede that an online shipment will take a few days to get here?
They may have been the offline Newegg once, but I won't be surprised when they file for bankruptcy in a decade or so.
You could call it brilliant marketing or a little douche-y. In either case, we had fun. Fond memories.
Jaycar stores stock a reasonable supply of electronics components, and has outlets in most parts of Australia.
My Dad also taught me how to build a desktop computer from scratch. We'd go to Radio Shack to pick up all the parts.
It's sad to see how far they've fallen from that kind of a destination.
RadioShack also knew how to ride a wave. During the
CB radio craze of the 1970s (you had to be there to
understand)...
I keep thinking RS could join forces with someone like Adafruit and create this same thing around the Maker movement. That said, I'm not sure the retail space and labor costs plus insurance would pay off, it would be a tricky model. But if somehow they could capture and bottle up this sort of thing for the next generation of technologists and do it at a scale that paid the bills they'd be back in the pole position on a massive trend.
However, with online purchases and AdaFruit being able to deliver stuff to me in time for my "weekend hardware time" I'm not sure there is a place for this in the malls of America. It would require a massive cash infusion and a complete redesign from top down of incentives and management to even get a crack at it. Perhaps someone with the money will buy the name and retail space and gut the rest and try a shot at it. That said I think stuff like TechShop [1] might already be headed there and they're aware of the challenges of cost of space and having the right vibe for hackers.
It's easy to underestimate just how insanely expensive retail space is in a mall, plus having labor, insurance and marketing costs it would be hard to justify selling parts against companies that have 1/10th the cost in their business models. In order for RS to succeed it would need to focus on the personal one on one wonder and discovery experience. That's harder then it sounds to staff and execute against and maintain margins to support the costs to operate the business. If I had the capital to fund it I'd love to take a run at something like this but it would have to be a big change and most likely the best route would be to take them private so you can make brutal sweeping changes rapidly and get the right kind of people in along with rebuilding the culture and the branding. Even after all that it would require a burn rate on a daily basis that would equal what some startups spend in a year. I’m not sure you could make the argument that it would be money well spent. If I were going long and had the capital I’d love to dig in and work out the model but the scale of this thing will most likely never allow the kind of entrepreneurial sprit it needs to be revived unless Elon Musk is bored and wants to back it, but I think he’s a bit busy.