Brand Problem: Big-Box and online electronic stores are superior in sales. Research shows that the consumer has a negative perception of the brand. Research also shows that people are displeased with employees and their ability to help them. Weak sales due to big-box and online electronics retailer competition. New primary research indicated poor consumer perception of employee knowledge, which fought the brand’s “we’ve got answers” advertising message.

Brand Solution: Using the consumers’ notion of Radio Shack as only useful when convenient, we will rebrand Radio Shack as the convenient store. This will reposition Radio Shack as the alternative to big-box stores. Focus on how the brand allows consumers to “get on with their life” instead of shopping.

The Phoenix Project is the yearly contest of Prof. Sean Trapani, a specialist in branding and copywriting. The idea? Take an old brand and reinvent it for today. A full gallery of all the entries is at Phoenix Entries; we will be writing an item on each entry as well.

Radio Shack has put out an RFP for their advertising account. One bit of Andrew McMains’ story caught our eye:

Online shopping, per the RFP, has not only made consumers more price sensitive, but has commoditized the customer service provided by Radio Shack because questions can be answered online. While the company still emphasizes the knowledge of its store associates as a selling point, this has created a “brand relevance challenge,” per the RFP — one that will need to be addressed by its agency finalists.

“The amount of information available online has mitigated the need in many cases for a skilled sales associate, especially with younger consumers,” the RFP states. 

A comment from me, the peg board fan.

Having salespeople who know about the product is no longer necessary for youth? First, younger consumers might not need as much information about electronic products as middle-aged folks like me, but they sure do like to TALK about these products to their friends, and you want younger consumers to be in your store talking about the products, and trying them out, fiddling, and selling extra features.

Has anyone from Radio Shack actually been to an Apple Store and stepped back and watched what happens there? Apple is all about expertise, sharing and conversation. It is (was) a veritable electronics snakepit, all ages chit-chatting about the latest features of all the Apple Products. And by-the-by, youth LOVE to show oldsters how to use electronic products. My 90-year-old mother in law just got an iPhone, and she was thrilled to just learn it had a camera. When we suggested a Jitterbug, she was not amused. She wanted to learn the iPhone.

Even for MIT grads, the sheer variety and number of electronic products and manufacturers make it impossible for anyone except the technology over-consumer to figure out how to really use these to their fullest. I would venture to gain that anyone with a digital camera only uses but a few of the settings, and the rest they are confused about.

And what of software, and computer programming, and even simple things like the insertion of a new Ethernet card into the back of a personal computer? They are pretty easy things to do, but you need someone to show you once.

The younger consumer, that 12-year-old boy, wants to do those sorts of things, and Radio Shack was once the place you could talk to the men who could tell you how to figure it out. They have been moving in this direction with their niche advertising website Radio Shack Invention Lab, but obviously they haven’t gotten the message completely. However, the spirit is there. Take a look at this video on how to build a portable USB charger from scratch. Amazing.

We pulled two invention suggestions from their site in order to illustrate the potential.

• Vibrating Vest for Deaf/soon-to-be-Blind Dog, Charlie Gilman
  I’m writing hoping for some help. I have an albino dog that I love dearly and he’s currently deaf. But already his vision isn’t good and will get worse. I use a vibrating collar right now to teach him commands etc, so I want to make a full vest that has several different pockets where I can place a vibrating motor and activate by wireless remote. ….Please let me know if you can help me out.Thanks
• The Laser Car, by Sam
  You see, I’m making a laser guided car for the sixth grade Science Fair. There will be a track built up of mirrors reflecting the laser into a guidance for the car. The laser will hit into a phototrasistor….(ETC) ROBOTS ARE AWESOME!!! :>)I almost have the main control circuit finished.

BrandlandUSA Advice: Julian Day. Please go to an Apple Store today and take a look. And bring some excitement back.

So business stinks. But when we go by to the store closest to our house, we can’t tell the difference between a Radio Shack and the Sprint store at the other end of the shopping center. We got a great comment on BrandlandUSA today about one of our posts on private brands at Radio Shack.

Phil Macarthur at oswegoradio.com writes to us and says:

The Flavoradio (model 12-166) (and the only pocket radio made in Korea for Radio Shack) was the longest running production radio ever built, 15 years (1972 – 1986). It made the cover of the March 2008 Antique Radio Classified.

So what’s the point? Radio Shack is missing a big part of its old business model when it doesn’t make its own proprietary products. Below, a few recent posts on Radio Shack.

So Circuit City is gone, and it’s Best Buy (NYSE: BBY) and Radio Shack (NYSE: RSH). How opportune for Radio Shack, whose stock seems to be in miracle zone, namely above $10 a share.

In August 2007, we wrote on BrandlandUSA some of our ideas for improving Radio Shack. They included bringing back some of its store brands like Archer, concentrating on the male electronics enthusiast and offering education for everyone in how to use new electronics, much as Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW) offer Saturday “How to install tile” classes led by sales associates. The idea was to find out the sorts of things that spurred small sales and neighborhood store traffic, and differentiate Radio Shack from the big boxes.

There was one other aspect of the brand that was also being ignored that we mentioned. Namely, Radio Shack’s status as a place where the electronics enthusiast could not only buy parts and pieces, but average folk could go in with their questions about AC/DC adapters, and not only get an answer, but plunk down $5 for a part that might cost them $1. The stores would go from being over-merchandised and designed, to a solution-oriented place with lots of plastic-baggie parts and batteries hanging on pegboards, essentially how the store was merchandised (or un-merchandised) in the the era when the company was Tandy.

We got a new comment today on another Radio Shack article from a fellow named Will. I thought it showed perfectly not only the opportunity for Radio Shack, but that they still have a ways to go:

Will: There was a time not so long ago when I spent over $1,200 in a year at Radio Shack and most components were under $2. I do not go there at all now.

This business model was confirmed by no less than Martha Stewart of (NYSE: MSO), though not mentioning Radio Shack by name. I wish I could remember where I read the story, but it bears repeating and is a good example nonetheless. Apparently after hearing Sony (NYSE: SNE) CEO Howard Stringer speak, Martha Stewart raised her hand, with a big tangle of power cords and converters for all of her personal electronics, and said “What can you do about THIS?!” Well, “This” is still around, and Radio Shack can help consumers sort the proverbial cords out. Interestingly, one of the busiest retail stores I have seen lately was a Florida franchisee of Batteries Plus, based in Hartland, Wisconsin.

A look at Radio Shack’s website www.radioshack.com mentions all of these points, including that they sell 200,000 items and are the perfect place to buy HDTV adapters. Radio Shack has also moved in the direction of the enthusiast with an Invention Lab where customers win a prize for the most interesting gadget made from all the funky parts found at Radio Shack. And they now offer an online Learning Center where consumers can register for online classes and learn how to set up home wireless networks. This is good, but I don’t see evidence of it at stores, which have many square feet of floor space, floor space that could be occasionally occupied by folding chairs for PDA classes and an increased number of racks full of new SKUs.

Radio Shack can still differentiate through product innovation. In the 1970s, its candy colored Flavoradio was almost certainly the inspiration for the original multicolor versions of the iMac. One of my personal favorite products (and one that was in every household with a boat) was the Deskube Weatheradio, a little wood-grained box with piano-key on/off and an antenna on top; it received National Weather Service forecasts. These items were designed by Radio Shack, and were essentially low-tech items. But they were useful, and consumers loved them.

We all know what Best Buy and Wal-Mart are going to do with the closing of Circuit City; sell lots more electronics. But with HD radio and television conversion on the immediate horizon, and radio stations struggling, Radio Shack could have a golden moment. Actual radio station groups including Clear Channel (NYSE: CCO) and CBS (NYSE: CBS), themselves slightly struggling, could partner with Radio Shack to push HD radio. In a time when consumers are cutting back, spending a few bucks for a converter for radios and TVs can free consumers from cable bills.

Radio Shack has one other advantage that it can exploit, even if times get REALLY tough. It can sell stores to managers; many Radio Shack stores are already franchises, some located within other stores.

So there is the opportunity. Radio Shack will just have to seize it in order to get Will, and his $1,200, back.

As a child and as a devotee of brands, I shared a love (and frustration) with the Radio Shack (NYSE: RSH) of the 1960s, 70s and 80s. (Great history is at www.antiqueradio.com) On the plus side, it had everything I ever wanted. I would count days until the arrival of their yearly catalog, and pour over their various antennae, phones, connectors, kits, toys and electronics. From Radio Shack, I weaned my parents from their old lease relationship with a Bell System telephone; Radio Shack sold Canadian telephones from Northern Telecom, I think. Their Archer antennae, Realistic speakers and audio components and Optimus speakers spoke to me, in the geekiest sort of way. In each product category, Radio Shack had a branded product of its own, often an exact copy of another product on the market. If it sold branded electronics, it would be merely a dealer. They did stuff that was cool.

The company also had a messianic spirit about it; I particularly appreciated their electronics kits, which were actually a number of different diodes, switches, light bulbs, solar panels, buzzers and such on a flat board, each part connecting to two springs. The kit came with all sorts of diagrams. By changing the wires, a kid could learn how to build basic circuits and electronic components. Wire it one way, and you have a buzzer system; another, and you have a radio. It taught me the basics of electronics; who knows how many boys were persuaded to go into electrical engineering careers because of it. As I look back on it, I can appreciate how the company was committed to learning; ultimately it made me respect Radio Shack as a competent and only sometimes glamorous supplier of all things electronic.

Rural folks had Archer antannae

One part of the Radio Shack experience bugged me, at least then. It was their use of store brands. You might remember the brands; which were not only specific products but specific types of products. Archer went on antennae tuners; throughout the rural south the name sat on top of TVs. Realistic on audio components. Optimus on speakers. Then there were the individual products like the Weatheradio, which was a cool little fake wood-grained box with an antenna sticking out the top. It only received National Weather Service forecasts, which could be had by pressing the little white bar on the top with a click. Every boat person had one on their boat or in their piney paneled dens; in a simple way it asked the question we all ask; what’s the weather today and tomorrow? The most genius product? It would have to be the Radio Shack Flavoradio, which was a simple transistor radio that came in tasty colors; we think it was the inspiration for the iMac. (See Phil MacArthur’s excellent article in www.antiqueradio.com.)

I digress into this because I strongly believed then that it was silly for Radio Shack to have its own brands when I could see that they were just exact duplicates of other items I saw in other stores. In my 70s pre-teen mind, I found the company sort of corny and old fashioned, and wondered why the cool brands that I craved – then Koss, Pioneer, Hallicrafters, AIWA and Sansui (particularly AIWA reel to reels) – were not sold at Radio Shack. How cool Radio Shack would have been if it had just stocked all of that! Like Kmart (then ONLY store brands), Murphy’ s Mart and Howard Johnson (why, HoJo cola?) which only sold its own brands back in the 70s, it was limiting itself.

Looking back on it, Radio Shack seems all the more wiser, and I didn’t realize how brilliant the differentiated products were. For in gathering up all these electronics under its own brand name, and creating its own products, it created its own brand mystique. And Radio Shack’s consistent pricing, catalogs and well stocked stores ensured that almost always I turned to Radio Shack, as did the rest of the nation.

Time Heals Bad Brands

This could have been good brand strategy by Radio Shack. It could have also been time and a stick-to-it-ive luck that made it work. For there is a rule with brands; it is the “Time Heals All Bad Brands.” It means this—if a company delivers a good product over and over again with a brand name that doesn’t work properly or is not well executed with graphics and such—it can still work as a brand and gain traction in spite of the poor execution of the graphics, packaging, advertising and marketing.

Sadly, Radio Shack tampered with a goofy formula.

Today, at Radio Shack, the brands are all diminished. The store and website is now are cluttered with Onkyo, RCA and Sony. Not a big loss for civilization, I suppose. But I don’t think Radio Shack gained anything by diminishing the Realistic brand in favor of Radio Shack.

They negated 30 years of their own, odd brand premise by diminishing the old names and now the weird practice that I have finally gotten used to has now disappeared. And they appear just like anybody else. In fact, because the stores were so small, they just look like diminished superstores, not audio boutiques.

That being said, their stock (NYSE: RSH) was at $19 at presstime, off from $35 in 2004 and $72 in 1999. That’s not too good, but compared to some others, it means that the company has life. And with clever management, it has room to grow again, with its advantages in location convenience (small stores in strip centers) and technology changes in television, radio and electronics that require store traffic. Profits are up, in a horrid time.

That’s really good news. Realistic good news.

Read our other posts on Radio Shack:

• Radio Shack’s Invention Lab: A Great American Invention
• The Solution for Radio Shack’s Problems
• 100 Brands to Bring Back
]]> http://www.brandlandusa.com/2008/09/12/the-soul-of-radio-shack-was-flavoradio/feed/ 5 http://www.brandlandusa.com/2007/08/01/the-solution-for-radio-shacks-problems/ http://www.brandlandusa.com/2007/08/01/the-solution-for-radio-shacks-problems/#comments Thu, 02 Aug 2007 01:50:00 +0000 Garland Pollard http://www.brandlandusa.com/?p=33 Save an American electronics icon with Realistic & Micronta The news on RadioShack Corp. is not good. Sales are down in the current quarter by 15 percent, and the Fort Worth, Texas retailer has closed hundreds of stores. Wall Street has all sorts of answers for why this Corner Electronic Geekfest Gathering Spot is failing, [...]]]> Save an American electronics icon with Realistic & Micronta

The news on RadioShack Corp. is not good. Sales are down in the current quarter by 15 percent, and the Fort Worth, Texas retailer has closed hundreds of stores.

Wall Street has all sorts of answers for why this Corner Electronic Geekfest Gathering Spot is failing, and they wonder why its cellular offerings are not doing well.

While solutions to the problems of Radio Shack are hard, the diagnosis to the answer to the problems of Radio Shack is simple. It is no longer what made it what it was. Radio Shack has ignored its well-developed store brands (Optimus, Minimus, Weatheradio, Micronta, Realistic, TRS, please click on image here to see some great examples at www.transistor.org), and has ignored its core consumer, the radio geek. It was first, after all, a store for ham radio enthusiasts. (It has also squeezed together its two words Radio Shack, and we are ignoring this name change because it looks like a misprint when we write it.)

These answers to Radio Shack’s problems are not something that BrandlandUSA has inferred. Instead, these could be easily figured out by comparing what a store looked like during the chain’s period of growth, vs. today. If you go into a store, it looks like a cellular bucket shop. There might be two 30-year-old electronics geeks at the counter, but they would be dealing with the intricacies of cellular plans, and not figuring out knotty (literally) cable connector problems for consumers. There would be a paltry selection of electronics equipment for sale, all national brands that could be found more cheaply at Best Buy and Wal-Mart. Many parts would now be hidden in the back, and all manner of pieces of electronics would not be sold at all. Today, the selection would be no larger than a home electronics department of a hardware store. An old Radio Shack had all sorts of racks with plastic bags hanging. Today, it’s all about blister packs and a paltry-piddly number of electronics. A Wal-Mart does better by most counts.

So what should Radio Shack’s Julian Day do? The good thing is Julian has plenty of cash, but he won’t need much to fix the problem. He should grab a few well-meaning veteran employees from around the company, sit them in a room, and let them vent about what the company was, and what made things sell. He should then ask them to go to the closest Radio Shack store, and re-merchandise it without the assistance of store planners, designers or market researchers.

Get past the embarrassment of that faked resume. Instead, ask the old guard why Radio Shack’s store brands were dropped in favor of national brands. Ask why the majority of store space is all about clean, open aisles and massive displays, when what brings people into Radio Shack is lots of shelves of itty bitty parts and pieces. He might ask why Radio Shack no longer sells standout unique products. Through the years, Radio Shack was known for developing its own products, some repackaged from other makers but essentially unique to Radio Shack. Many products were standouts. Some were hilarious, others odd; the company even sold a Micronta Bio-Feedback Monitor. Click on the image above to see a bit of that history at Sarah Lowery’s brilliant website www.transistor.org.

Ask why the cute Minimus line of small speakers now is now gone, and the store brand name was changed to Accurian. For electronics nuts, the tiny, black Minimus 7 speaker was a brilliant deal. Ask why there are only a handful of products with the Weatheradio name. The Weatheradio was a great piece of product design; a fake wood box with a white piano key button on top and an antenna sticking out the top. Any person, rich or poor, who had boats had a Weatheradio. It was cool. Bring it back; a Radio Shack without a fake-woodgrain Weatheradio (or other radio) is like an A&P without Eight O’Clock coffee and coffee grinders at the checkout.

Ask why store brands for Radio Shack are all confusing, and a devoted fan of the store might be confused about the offerings. He might ask why there are only a handful of electronics kits for boys. He might ask why Radio Shack no longer sells an equivalent to the TRS-80 computer. We know that millions are using Linux at home for the fun of it. Why not a cheap base model Linux for Geeks to give their sons for entertainment? Take your staff out of polo shirts and put them in short sleeve button downs with pocket protectors.

Best Buy and Circuit City have geeks who visit your house to fix problems. Why not do what customers are used to doing, and have them (surprise!) bring their problems TO the real life geeks at Radio Shack. Perhaps a few of those cluttered aisles could be pushed back a bit in the evening in favor of foldout chairs, and Radio Shack could offer classes in how to work various electronics equipment. I bet a seminar teaching iPod or Shutterfly would be a hit with anyone over 40.

Day might then ask a few target consumers what they want. Radio Shack has a number of them. There is Electronic Enthusiast, male, 29, and too focused on video games to ever bother attending Engineering School. He likes to go in Radio Shack and see what’s there, and buy it. By career, Electronic Enthusiast might be your tech support guy who is in a cubicle down the way. Then, there is Science Smartie; this might be the parent of Electronic Enthusiast, who actually has an advanced degree. Science Smartie likes buying Radio Shack’s electronic kits for nephews, sons and neighbors’ kids. There is also Confused Woman (is this sexist? who cares, it’s true, though there are plenty of Confused Men), a person of any age who goes into Radio Shack for the solution to a particular electronics problem that must be solved in the household. Confused Person also goes into Radio Shack to shop for children or grandchildren. She (or he) knows that if it is about electronics, Radio Shack has answers.

Julian Day should know that there are millions of American men who operate on their own PCs at home, adding memory, modems and such. Think of all the men who work as tech support in American corporations. These are the main target market for Radio Shack. There are certainly a million men who work in electronics, and they all have sons. For these Electronic Geeks, Radio Shack is not just a retail store, it is a place where if you go on Saturday, the place where the Geek will find kindred souls.

Radio Shack should be like an old fashioned hardware store where folks gather on Saturday. In fact, any person confused by electronics likes to go into such a place. A confused electronics shopper might not only get advice from the store clerk, others in the store who are gathering might have the same problems, and they might offer up advice too, or just want to talk about weather or vent about awful cellphone service.

Radio Shack is not thought of as a national asset for science and engineering, where amateurs and professionals share common ground. But it is, or should be, such a place. It is a commonly told story that Steven Jobs built Heathkits. The old Heathkit market is the Radio Shack market. It is a market for enthusiasts.

Of course this is overstatement, but there is a nugget of truth in the statement that Radio Shack’s enthusiasm for electronics helped nurture a nation that once (and sort of still) leads technology. When science education failed, at least the enthusiasts like Steven Jobs filled in the empty holes. Please, Mr. Julian Day. You have a great American icon in your hands. Don’t look across the street to Best Buy to figure out where to take Radio Shack. Best Buy does a great job. Instead, look inward, backward and then imagine life about 10 years forward without Radio Shack. That would be a sad scene indeed.

In the old days, what was good for GM was good for America. In this computer age, what’s good for Radio Shack is good for America.

Read our other posts on Radio Shack:

• Radio Shack’s Invention Lab: A Great American Invention
• 100 Brands to Bring Back
• The Flavoradio. Innovation from Radio Shack.
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