Who shops at RadioShack?

Aarti Shahani Nov 7, 2013

Who shops at RadioShack?

Aarti Shahani Nov 7, 2013

The company founded 88 years ago is hurting for cash. Some analysts say RadioShack needs to have a killer holiday shopping season to survive another year. And to get much further, it has to answer a question it’s long avoided: Is RadioShack a convenience store for techies, or a brand that inspires customer loyalty?

While RadioShack’s storefront with the red and white awning is familiar, fewer shoppers are venturing inside the store. In downtown San Francisco, Sunday afternoon is peak shopping time. But the RadioShack on Market Street is nearly empty.

There are a couple of creative types like Angel Whitney. She’s here to buy a six volt battery.

“I’m actually making colloidal silver at home. It’s silver that you can drink.”

Jos Cocquet loves the variety.

“There’s all these cool electronic components here, like Arduinos.” That’s a microcontroller that lets you build your own electronics.

But Cocquet is not here to buy an Arduino, or anything else for that matter. Here’s here to do research.

“I’m actually just checking out the floor space because I develop an iPhone case and I want to see what the packaging looks like.”

On the other side of the country, in Manhattan, there’s another Radioshack with only one customer. Trish Scanlan just got to America and she’s looking for SIM card to use her international phone. After not finding it at a dozen stores, including RadioShack, she settles on a pre-paid phone.

“They were kind enough to have a very good value phone that I’m buying instead.”

From coast to coast, Radioshack is a familiar haven for Do-It-Yourself junkies and last minute shoppers. It’s got something for everyone.

“That’s the problem,” says Michael Pachter, an analyst with Wedbush Securities.

“Radioshack has something like ten thousand different products,” he says, “The stores are cluttered.”

Pachter says RadioShack is on its last leg and while its new CEO is a competent man, he doesn’t have enough capital to solve all the company’s problems.

“The CEO is making changes there but it’s really a confusing place. It’s not a real pleasant experience, and you have to look for the cool stuff.”

Pachter says RadioShack does not neatly fit into the well-known tale of ‘retail store dies as Internet sales surge.’ The company survived as others like Crazy Eddie and The Wiz died.

But now, Radioshack has to build a relationship with a core group of dedicated customers.

“Home Depot has paint matching. You can come in with a chip and they’ll match the paint color. Abercrombie and Fitch has private label merchandise that you want. But RadioShack has neither.”

Last year, RadioShack got a bit of a boost by selling the iPhone.  But this past quarter, profit decreased $98.1 million, or 28.8 percent when compared with the same period last year.

RadioShack is now clearing out old merchandise and undertaking minor and major renovations in two thousand stores nationwide.

The company didn’t respond to our interview request. Last month on a quarterly earnings call, Chief Financial Officer Holly Etlin curtly dismissed an analyst who asked if the newly remodeled stores are making more money.

“We’re not going to engage in commentary on profitability of individual stores. Next question please?”

On that same earnings call, CEO Joseph Magnacca said RadioShack’s now going to move on to health gadgets for fitness junkies. But he also wants to win back the Do-It-Yourself crowd Radioshack neglected over the last decade.

“The new RadioShack can be relevant to both audiences by connecting on their shared mindset.”

This strategy of casting a wide net, winning back the old customers and recruiting the new — it just might be what got RadioShack into this predicament in the first place.

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