Radio Shack to Close More Stores

[K1JJ]

It would take a complete change of purpose for RS to survive this decline.  They'd have to start selling something that nobody else sells.  

Warren Buffet is smart enough not to buy into businesses that have no future.  

RS lost only $400 million last year.  If it were the US post office, they would call it a success....  

Yes, there are better businesses out there to buy today, that's for sure.


Tom Vu said: " Convert all RS stores to shushi bars."


T

[Pete, WA2CWA]

It would take a complete change of purpose for RS to survive this decline.  They'd have to start selling something that nobody else sells. 

That would be very hard to do. Online retailing will continue to beat them up. With each year, online retailing is grabbing a bigger piece of the market. With large online retailers setting up warehouses all over the country and the world, the ability to get from the warehouse to every customer's doorstep within 24 to 48 hours is a real plus. Going to Amazon, can get you almost anything you want. Besides what they stock, they have partnered with thousands of other outfits to get you what you want and stuff is drop shipped from their locations. Even Sears, Best Buy, Staples, Office Max, Office Depot, and others are now doing the same thing to try and keep their market share from further eroding. By partnering, you don't hold any inventory, so that keeps your asset dollars down, you don't pay for inventory space, your turns ratio is not as important, your profit per item isn't as great, but your customer exposure always remains high.

At this point, I don't think there is much that RS can do with their present organization other then close the majority of the stores down, sublease the space of the closed stores if possible, pay off all the creditors (under bankruptcy protection if it comes to that), and then make some hard decisions. Do they regroup as a general electronic commodity seller or a specialized electronic commodity seller. I'm not sure they have the market savvy today to really make either of these decisions.

[KB2WIG]

 " Do they regroup as a general electronic commodity seller or a specialized electronic commodity seller. "

Well, how about "A Shack of One" as a new slogan. Or knowing a bit about the management, how about  " We Specialize in Everything!"

 I usta get miffed as a little kid buying 2 resistors in a pack when I only needed one. Marketing.

Its a love/hate relationship with RatShack. I wish them well, but like previous comments, their days are numbered.

klc

[Opcom]

When I buy common parts like resistors, I usually buy 5 or 10 for stock. It's economical in the long run. I still enjoy Radio Shack for common parts and certain goods. It's very self-serve for me, because the clerk usually does not know what I am asking for. In my opinion, that is a major defect. Any boob can push cellphones. 1 in 100 can immediately show you to the SO-239 drawer.

What tickles me about radio shack is the hiring practice, even though it is not funny at all. If you apply, it is online and there is a third party website psycho test with a lot of vague questions about how one would do things or what one believes is the right way to do or build business. Many questions focus on whether taking chances or trying new things is the right thing to do. Then I suppose they choose whomever answers according to their own ideas.

People will usually do as asked in a job and adopt or engage the employer's way of working. Why the strange mental tests questionnaire, having nothing to do with any technology, for counter help in an electronics store? Are they looking for doormat employees who are afraid to be creative? Creative ones who will bravely try different promotions in the store and apologize later? It's really ambiguous. For sure it is not to select anyone with appliance and parts knowledge.

You only get one chance in life to take that odd online test. If you have ever taken it before, the website waits until you did it again, even years later, and then after you have wasted your time on it, tells you that you have taken it before and your original answers will be used. I can guess some consulting co. has sold RS a bill of goods in this case; and they swallowed it like a catfish does an old piece of cheese. I really feel bad for them, because this externalization of prospective hire selection is likely not the only bad decision they have made.

Anyway, that selection method is probably responsible for the rude and incompetent employees I have run into there. Sadly, they have frequently selected the worst possible and most ignorant persons and that is one cause of the bad performance. Maybe because the tech-smart type of person does not usually fit whatever rather profile the test evidently seeks.

Poor Radio Shack. What has led them to their own self-made horror? I believe it is not so much external industry factors but internal bad decisions.

[Pete, WA2CWA]

They "mental tests" you refer to were probably designed somewhat to gauge a potential hire responses or actions to customer questions, issues, or situations and how they can contribute to the store's success.  In today's world, most typical electronics retailers don't look for potential salespeople with high or any technical backgrounds. If they get one, that's a plus, but that's not the driving factor. A good salesperson only needs to know very basic stuff. They're there to sell not give the customer a technical education. A good salesperson can sell just about anything if they're motivated enough. A salesperson needs to know the layout of their store and where particular stuff is and drive the customer to the location. For high ticket items, there's a ton of generic buzz words and phrases a salesperson can use without knowing technical squat about the item. And, a salesperson with some experience, can generally size up a customer in short time if they're really in an immediate buying mood. Some mall location stores are places where people just go to kill time.

As far as a selling resistors, a coax connector or a cellphone, I would push the cellphone. Far more profit in that. You have to sell a lot of resistors (along with keeping a large inventory of values on hand which costs money) in order to make any substantial profits. It's good to have some ancillary-type parts on hand to support the profitable items you're selling but there's no huge profits in stocking and selling the nitty gritty type of parts like resistors, capacitors, etc. at the retail level. It's a waste of asset dollars.

I would suspect many of the good or bad management decisions are driven by both real and perceived external industry factors.

[WQ9E]

Back in 1984 I brought in a couple of former RS people into ComputerLand and I recall they had to take a polygraph back then as part of the RS hiring process.  The online test may be trying to accomplish the same thing as the old "wire em up" polygraph exam.

The funniest online testing I am aware of was put together by a very large global corp. with headquarters in the midwest.  After the ADM ethics issues a number of companies begin getting more serious about ethical behavior of new recruits and this company commissioned an online test that took about 2 hours to complete and potential new employees took it before their first formal interview.  During the first year it was used less than 1% of those taking it "passed" the exam.  Rather than drop or change the test instead they contracted with a second firm who provide "orientation" to potential employees so that they could pass the ethics exam.  This foolishness went on for several years before the entire mess was dropped.  Stupid decisions take on a life of their on and once ingrained in the corporate culture are nearly impossible to eradicate.

[WB2CAU]

At this point, I don't think there is much that RS can do with their present organization other then close the majority of the stores down, sublease the space of the closed stores if possible, pay off all the creditors (under bankruptcy protection if it comes to that), and then make some hard decisions. Do they regroup as a general electronic commodity seller or a specialized electronic commodity seller. I'm not sure they have the market savvy today to really make either of these decisions.

Let's have a Radio Shack death pool.  Pick a month and year.  Win a RS Lifetime Battery Card.  I randomly pick April 2015 as the end of the line for RS.   

[Opcom]

I think I might agree with Pete on the test. If it picks sales people, that would not be me and therefore the questions would seem obtuse. It surely had no ethics questions.

About 'driving' a customer to a product, what does that even mean? I see this phrase a lot. Driving customers. Driving them mad perhaps. Seems to indicate the sales person should be pushy but no one likes that. I guess there is an inoffensive technique to convert a shopper to a buyer.

Aww no RS demise pools.. gambling over a demise is not very nice. People will lose jobs they may have enjoyed for years. Ask me how to embrace that kind of change.. I took a 5 month holiday then got another job. Others having debts and expenses and families may suffer considerable distress instead.

[ka4koe]

I agree on not having a "pool". Reminds me of rifling through a dead person's pockets.

[W9ZSL]

I worked for Radio Shack for over two years.  For the first month or so you sit at a computer taking their "sales courses" which are supposed to teach you electronics, the terminology and how to sell.  Yes, they encourage aggressive sales, especially pitching customers to buy cell phones, accessories, batteries, added guarantees and credit cards.

Several things are wrong, not the least of which is low pay (minimum wage), high sales dollars plateaus before you earn a commission and setting goals especially with cell phone sales.  That is their big-profit item.  Fall short and get chewed out.  The end result is huge employee turnover so more likely than not anyone left will be a newbie and poorly-trained.  

The cell phones themselves are dragging stores down.  At one time, they may have been a big ticket item, but now markets are saturated with numerous company-owned stores with associates trained to sell and activate them and nothing else.  That means fewer potential customers for Radio Shack and increased competition.  In addition, the poorly-trained RS employees have a hard time understanding cell technology (I was one) and each sale takes at least 1/2 hour to close.  I used that to my advantage.  I'd direct the customer to another associate who knew what he was doing and I'd wait on customers who came in while he was occupied.  That's one reason customers walk out the door.  They don't want to stand around while sales associates are making that time-consuming transaction.  Yet corporate heads continue to push cell phone sales to the neglecting of everything else in the store.

Speaking of turnovers, in the time I was there we went through several district managers and store managers.  Last month I went to the local store to make a payment on my credit card (which as a HUGE interest rate) and the manager had to call the district manager to ask how to take my payment!

The flap over the Super Bowl ad was interesting but I haven't seen any changes in the local store other than one of their regular re-arrangments with "store planners" which do nothing more than move everything around with corresponding change of signage for displays a few times a year causing confusion to customers, wastes associates' time and costs the corporation a lot of money.  I guess the idea is to make customers look for what they want and while they are looking, they might see something else they want and buy it in addition to what they came in for in the first place.  As a regular, that is annoying because I know what I want and hate searching for it.

Lastly, corporate leadership has changed many times over the past ten years and with every change, the new leadership comes up with some "brilliant" idea they try to implement leading to more changes on the store level.  Case in point: changing the name from Radio Shack to The Shack a few years ago.

Radio Shack needs consistency and maybe returning to the original mission. Also, what is happening at the lower levels, like staff turnovers, doesn't seem to work its way up the chain of command.  The problems at the local level aren't being addressed and the result is the blind leading the blind.

[Opcom]

Cellphones, or as they are sometimes called so as to include all from dumbest to best product, 'handsets', is a real tough biz. It was more lucrative in the past but I professionally agree with the profitability decline you have cited. Nokia's recent trouble in merely an echo, albeit a strong one, of the profitability implosion.

When I can go to Fry's and buy a cheezy but reliable and internet-able tracfone for $50 and buy my minutes separately, without being locked to plans or unexpected fees, things have got to be tough at the top end of both plans and handsets.
Also, the government has been supplying inexpensive phones through approved vendors to the poor (those making less than $1100 gross a month in TX qualify). This has removed a huge number of potential customers. In the past, those people could be persuaded to buy a cellphone on a plan and be 'trapped' in it for two years via a credit card. Without judging, that was an income stream that has dried up.

I wonder what sub-business RS could have gotten into that might have replaced the profitability of the handset business. Hindsight. But is there even such a business?

In the days before cellphones, RS used to sell a selection of stereo gear, TV sets, and other entertainment-type equipment. I recall that they sold a few name brands, but they had their own Realistic brand, sometimes a contract manufactured design (as in stereos made in Japan), sometimes a re-brand of an existing product.

Despite their huge debts and huge problems, I would like to see RS morph and become profitable and useful again. Maybe pie in the sky, but still.. What would I do, if I suddenly had a RS storefront and the proper authority and discretion on a little bootle?

Everyone who has ever had a small electronics business consider it. What electronics-related storefront-type businesses are out there that already do well and would benefit from the 'reputation' of a national chain? What would you do?

[n1ps]

There are a number of franchise stores out there too.  One such store is here in this area.  The family is hanging in there, taking the punches. 

I wonder what really is the RS brand now.  They were for a while the electronic gadget store.  But then other stores came in, some of them didn't last.  They have been a local parts store for the electronic DIYer.  In this age of DIY, you'd think they would prosper.  But electronics doesn't get fixed anymore.  Its thrown away.  They caught some waves in the past...CBs, computers, etc.  So who are they now?  Well I don't rightly know.  And it seems they don't either.  I hope they catch another wave.  Though I don't go into a RS store often these days, always nice to know they are there.

~ps

[K1JJ]

Waves...

I wonder if robotics, drones and hobby DIY would fly?  Add rocketry, stink-bombs, Halloween costumes, video games and stock the parts racks again.   They once had some nice solid state kits and educational sets. Great toys.

When ya look back at what they sold in the 60's and 70's, it was quite diverse. They had everything.

In 2014, it's probably like trying to save a TV repair shop.  Trying to support a $billion corporation with mega buck salaries and pensions - using a financial structure that was set up in its heyday, is like towing a Sherman tank with a bicycle.

T

[W3GMS]

From my limited exposure to Radio Shack these days, it appears that they are trying to compete with some of the giants out in the consumer electronic market.  When I have done cost comparison shopping it appears that in most cases Radio Shack prices are higher.  I have wondered for a long time how they have been able to stay in business. 

Most of the younger electronic geeks today are buying applications or in some cases writing programs themselves.  Very few are interested in what we did with a soldering iron and a pile of discrete components.  Hardware today is just a way to get to the application. 

So times have obviously changed and it certainly did not happen overnight.  The competition for commodity electronics is fierce and you really need to have some type of differentiation to win.  Price, speed of getting what you want and how to send it back when it does not work are what a lot of the younger set looks for. 

So be glad you have a good junk box and continue to have fun with what most of us enjoy! 

Joe, GMS       

[Opcom]

bombs?? geez. OK well 'lawful' firecrackers or small 2-part energetic materials kits for a little risky fun and celebrations, but I don't allow those items around here. Or neutron guns, or other stuff that's just plain unsafe. WTH, man..  Some fun out in the country perhaps, so that no harm is done.. but there are laws regarding the size of a firecracker, and it is legal to make one big enough to remove a couple fingers.. just saying I don't like them that size. No offense.

I'll take a drone though. The coolest would be one with stereoscopic vision and a converted motorcycle helmet or hat with a light-tight viewing screen to view, hear, and have the instruments show up in. Big money in those things.

Back to RS..  Could have been selling a small range of drones. They do or did sell those self stabilising helicopters.

I agree their prices are high and it ruins them for competitiveness.

RS could have become SparkFun. Even there, the hardware is just a place for the software, although there are many cool kits. Few if any need soldering. My favorite is the scopeclock.
If RS had become SparkFun, the hardware aspect would have been better, I mean, ways to expand the kits with loose parts and project boards not offered by Sparkfun's business model. Back to the scopeclock, it's DAC is not protected and extreme care has to be used building it into a scope, the slightest charge through a coupling capacitor will pop that DAC. At the ideal RS, one could buy a little board and put some transils on it..

Loose parts nowadays are sold at Fry's, MicroCenter, and a couple of parts houses one of which is a 'surplus' store, Tanner Electronics. They make most of their bootle from the local tech programs like DeVry. I use tanner's a lot. The other, Alltex, is a regular electronics supply store used by the local industry. Hams use both, and also Grainger, etc. (Dallas TX)

Science kits are sold online by various enterprises. They cover NMR, drones, optics, bio stuff, chemistry, and the rest. You can actually buy a MRI kit that uses the Earth's field. It is of course fully assembled but comes with training and teaching material and tech manuals, so that the wonders of science are shared properly. That's the high dollar example, but just saying there are ways and ways to offer cool stuff. Where's that MEMS Radiometer kit?

The degeneration of Radio Shack has progressed to such a degree that a 'whole new thing' is needed. In addition, the severe lack of interest in tech knowledge by the kiddos is ruining the market (or nation some say). In the older days, the media was all for individuals playing with science at home for education and fun. What happened there? Too much emphasis on safety? Oh No!! 24 volts!! That's dangerous!! I'm here to wipe that pablum off the contactor and get busy with electronics.

They (RS) have missed so many of these boats over the decades. Perhaps if they had hired me 15 years ago as a new product manager, we would not even be having this discussion. A long shot and a hindsight lost in spacetime, but I still have a passion for the idea of Radio Shack as a popular electronics and hobbyist store; for it as a leader in that industry. Today, they do 'mail order' for many things. Nothing wrong with that, the internet model relieves the storefronts from having to stock everything.

Regardless of my position or ideas, it is surely upper managements' lack of vision, their fault for being a follower of mass/consumer technology and not an industry leader. They have really failed to capture the imagination of youth, failed to offer generic accessory 'expansion' kits for the stinkin cellphones and everything else. I am curious as to whether any of the top guns there have even a slight interest in in the joys of hands-on technology for fun and profit. Or an understanding of the concept.

[Pete, WA2CWA]

I agree their prices are high and it ruins them for competitiveness.

The offer price matching, so they still retain competitiveness.

The degeneration of Radio Shack has progressed to such a degree that a 'whole new thing' is needed. In addition, the severe lack of interest in tech knowledge by the kiddos is ruining the market (or nation some say). In the older days, the media was all for individuals playing with science at home for education and fun. What happened there? Too much emphasis on safety? Oh No!! 24 volts!! That's dangerous!! I'm here to wipe that pablum off the contactor and get busy with electronics.

It's the 21st century, times change, people and their interests change; "playing with science at home for education and fun" today probably takes a back seat to many sports activities and lots of other things not related to science/electronics.

They (RS) have missed so many of these boats over the decades. Perhaps if they had hired me 15 years ago as a new product manager, we would not even be having this discussion. A long shot and a hindsight lost in spacetime, but I still have a passion for the idea of Radio Shack as a popular electronics and hobbyist store; for it as a leader in that industry. Today, they do 'mail order' for many things. Nothing wrong with that, the internet model relieves the storefronts from having to stock everything.

Regardless of my position or ideas, it is surely upper managements' lack of vision, their fault for being a follower of mass/consumer technology and not an industry leader. They have really failed to capture the imagination of youth, failed to offer generic accessory 'expansion' kits for the stinkin cellphones and everything else. I am curious as to whether any of the top guns there have even a slight interest in in the joys of hands-on technology for fun and profit. Or an understanding of the concept.

As a product manager, you would manage a product line or some set of products. You interaction with the over all direction of the company would be minimal unless you were "very closely related" to the CEO or one of the Vice-Presidents who ultimately drive the direction of the company.

[Opcom]

I agree their prices are high and it ruins them for competitiveness.

The offer price matching, so they still retain competitiveness.

The degeneration of Radio Shack has progressed to such a degree that a 'whole new thing' is needed. In addition, the severe lack of interest in tech knowledge by the kiddos is ruining the market (or nation some say). In the older days, the media was all for individuals playing with science at home for education and fun. What happened there? Too much emphasis on safety? Oh No!! 24 volts!! That's dangerous!! I'm here to wipe that pablum off the contactor and get busy with electronics.

It's the 21st century, times change, people and their interests change; "playing with science at home for education and fun" today probably takes a back seat to many sports activities and lots of other things not related to science/electronics.

They (RS) have missed so many of these boats over the decades. Perhaps if they had hired me 15 years ago as a new product manager, we would not even be having this discussion. A long shot and a hindsight lost in spacetime, but I still have a passion for the idea of Radio Shack as a popular electronics and hobbyist store; for it as a leader in that industry. Today, they do 'mail order' for many things. Nothing wrong with that, the internet model relieves the storefronts from having to stock everything.

Regardless of my position or ideas, it is surely upper managements' lack of vision, their fault for being a follower of mass/consumer technology and not an industry leader. They have really failed to capture the imagination of youth, failed to offer generic accessory 'expansion' kits for the stinkin cellphones and everything else. I am curious as to whether any of the top guns there have even a slight interest in in the joys of hands-on technology for fun and profit. Or an understanding of the concept.

As a product manager, you would manage a product line or some set of products. You interaction with the over all direction of the company would be minimal unless you were "very closely related" to the CEO or one of the Vice-Presidents who ultimately drive the direction of the company.

Sports has always been immensely popular with people who mess around with technology because sports and outdoor stuff is a part of living for the majority. It may be more visible due to some new games televised, but it seems to me really the same popularity. I'd more likely agree with a downturn in the general curiosity and imagination of people. Something has sucked the life/brains out of them. Made them less curious and less thinking. lately i find few people working as technicians who have any passion for it. A real shame. sad.

I've been successful in suggesting changes and new products. The opposition is usually from those who are entrenched with their own little empires.  No matter really.