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It finally happened this month. After many years of disappointing performance, changes in senior management, even more changes in CMO’s, and as many changes in advertising campaigns, Radio Shack announced that it was closing up shop after 94 years and thousands of store openings. Some of the stores will remain open with Sprint wireless being the primary offering, but it’s doubtful that the Radio Shack that built a strong awareness through aggressive advertising and convenient locations will ever come back as a retail marketer.
Which brings about the question of brand equity. Many believe that if you build top of mind awareness, you have a successful brand. All you have to do is look at Kmart and Sears or Oldsmobile and Plymouth to mention just of few well-known names that just simply weren’t or aren’t relevant any more. As Radio Shack itself admitted in its 2013 Annual Report, the company “struggled to find its place in the market, and more important, with the consumer.” You have to give Radio Shack credit, it was able to spot new technology and become a pioneer in the electronic calculator, then home computers, and later with wireless. Yet, it never became the destination brand for any of them despite aggressive advertising.
The company hung on to its roots as the tech do-it-yourselfer’s place for those little things that helped one build or repair their electronic devices. However, as these devices became obsolete so fast that replacement was smarter than repair, and as the technology itself evolved to inexpensive chips and discs the need for all those little (high gross) “things” just was substantial enough to survive.
Radio Shack was not always lost in the woods, however. About 10 years ago, the company sold its Canadian operations to Circuit City (another high awareness/poor branding casualty). I was involved with CC as a client while at Doner and we were tasked with the challenge to rename the north of the border stores since Radio Shack would not allow its name on one of their competitors’ (CC) stores. It was an interesting challenge, but what was more interesting was to see how different the Canadian stores were from the American ones. With a separate management and merchandising team, the Canadian stores still had strength’s in wireless and personal computing, but it had really developed a niche for “gadgets” that people just like because they are unique and on the cutting edge. These are the items that have made Brookstone, Spencer Gifts, and SkyMall successful. It should be noted that Brookstone filed for and emerged from Chapter 11 last year which verifies the challenges of this category today. They are interesting items, in significant assortments, that make shopping the store and its ads more interesting…and fun. The stores were contemporary and in high traffic locations. Frankly, I thought that CC had hit on an idea that could have moved their entire American operations out of the severe doldrums they were facing. Winning the battle of big screens and laptops was not likely and a look at Brookstone’s success at that time made sense to me. Of course, that never happened as CC’s new management continued on a course of self-destruction and is now just a memory—despite its former high top-of-mind awareness.
Radio Shack (US) was in the same boat trying to do business the same way it did when the first pocket calculator sold for $375, when the first desktop sold for $2500 and the first flat-screen had an $1900 price tag. And only your stores had them. As competition increased, the small, neighborhood stores simply could not live up to a promise of assortment and innovation. Many have said that Radio Shack’s name was its problem and it certainly didn’t do anything to verify a contemporary tech store. However, had the company positioned itself with a brand strategy that built its awareness on the important values that the customers are looking for, the name would have been just fine. A few years ago, Radio Shack’s “You have questions, we have answers” campaign was the closest thing to building a brand promise that had merit given the lack of knowledgeable salespeople in the warehouse stores and other specialty stores. Given the success of Apple (both as a manufacturer and a retailer), Radio Shack could have built a brand based on cutting edge tech with knowledgeable people. Unfortunately, we’ll never know. And the awareness, like the stores will disappear.
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