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RadioShack and the Issue of Relevance

Posted By Administration, Thursday, February 12, 2015
Updated: Wednesday, February 11, 2015

by Dwight D. Hill, McMillan Doolittle LLP


The news of RadioShack's Chapter 11 filing last week should have been a surprise to no one and all the pundits are pontificating what happened. Most of us have seen this coming, yet another casualty along the retail landscape. I, like a legion of other consultants, worked for RadioShack as a consultant several years ago. It was an initiative focused on operational effectiveness and cost reduction throughout the supply chain. Meanwhile, the CEO of the time was focused on plans for relocation of the corporate headquarters and the design/build of a sprawling campus.

The CEO was later fired for misrepresenting his skills on his résumé, rounds of layoffs began, and several buildings on the new headquarters campus were sold to a local community college.

RadioShack was certainly an icon in retail that filled a niche – providing any cable, electronics component, or simply guidance and answers to the hordes of hobbyists and other consumers that needed help connecting TV's or other components. In addition, as mobile phones gained prominence, they became one of the largest wireless retailers in the U.S. Their associates were certainly incented to sell wireless devices – even walking in to buy a cable you were usually peppered with questions like "What type of phone do you have?" or "How do you like your plan?"

Despite a few new concept launches, their store fleet remained largely the same, carrying batteries and accessories and even a few televisions – usually about 4-5 SKU's. While televisions were a small part of RadioShack's business, this was one of the symptoms of what was happening with RadioShack – the company was losing relevance with their customer. Why would you go buy a TV at RadioShack when you could go to Best Buy or Amazon and have an assortment that is infinitely larger? Worse, why go buy an electronic component at a store that may be out of stock or have limited availability when you have an unlimited product catalog called "the internet" at your disposal?

The company had an enormous following and filled a need during its heyday, but that heyday was during the mid-1980's and what we have witnessed is a long slow decline over the past 30 years. It provides the unfortunate opportunity to witness what can happen to a retailer that has lost touch with their customers, and relevance within the market.

What can you do to ensure you are still relevant with your customers? How are you as a retailer evolving with the market?


Dwight D. Hill, whose background includes leadership roles with Neiman Marcus and Deloitte LLP, is Partner, McMillan Doolittle LLP. Dwight can be reached at dhill@mdretail.com.

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Tags:  RadioShack  Relevance 

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