RadioShack's New Niche: A Place for Makers
Sadly, RadioShack stock (NYSE:RSH) is now hovering at about $0.30/share and is in danger of being de-listed from the New York Stock Exchange. I owe a lot to RadioShack, as my position as a RadioShack sales associate essentially put me through college, between 1995 and 2001. I worked at RadioShack from my senior year in high school until I left for grad school, five and a half years later. So I have a deep emotional attachment to RadioShack and its fate.
It's no secret by now that RadioShack has been largely unsuccessful in recent years. But what went wrong? RadioShack has been in crisis before, seemingly every decade or so when changes in technology have threatened to render the RadioShack product line obsolete. But in every prior instance, RadioShack was somehow able to keep up with the times and eek out a new niche for itself, sometimes even being the leader in a technological revolution. For example:
In the 1960s and 1970s, RadioShack was the go-to place for Amateur (Ham) radio and Citizens Band (CB) radio equipment and supplies.
When the CB craze died down and the personal computer revolution was at hand in the late 1970s and early 1980s, RadioShack developed its own line of TRS-80 computers and even opened Tandy computer stores.
As the personal computer market became saturated and bloated in the late 1980s and early 1990s, RadioShack again found a new wave to ride: the cellular telephone. Before there were Verizon Wireless stores or AT&T Wireless stores, there was RadioShack. And RadioShack was a leader in "bundling," the practice of giving away a cell phone for free, or at a reduced cost, with a signed cellular service agreement.
For a time, RadioShack was even a leader with its direct-order "Radio Shack Unlimited" (RSU) expanded product line, along with online ordering from RadioShack.com, anticipating the successful online ordering service that would flourish in companies such as Amazon.com.
But as the novelty of cellular phones wore off, and as innovations such as internet-enabled mobile devices (think iPhone) became the norm, RadioShack failed to carve out the next niche for itself. This is for a number of reasons:
Wireless carriers such as Verizon and AT&T found that they could provide better service, and avoid having to give RadioShack a cut, by opening their own stores. Suddenly, customers stopped going to RadioShack for their mobile phones and found themselves being helped by much trendier-looking employees at a corporate-owned wireless store.
Amazon.com became massively successful, essentially clobbering RadioShack at the online-ordering, direct-shipping enterprise that RadioShack had once been on track to building.
And most importantly, people just don't need the diversity of products that RadioShack had been offering any longer. Open an old RadioShack sales flier and examine its various product offerings, and you will be amazed at just how many of those devices have been replaced by a single device, such as the "smart phone" or the internet-ready phone in your pocket. The average customer just doesn't need a home phone, a camcorder, an answering machine, a pocket tape recorder, an alarm clock, a CD player or cassette player, a calculator, and so on. The little phone in your pocket can even do many of the tasks for which you once needed an expensive desktop or laptop computer.
Because of the last bullet point above, it has not been clear since the advent of internet-capable mobile devices that there even would be another technology wave, since mobile-device makers seem to have made it their goal to pack every possible feature or tool into a single device, the Swiss Army Knife of modern technology, if you will. And sadly, RadioShack was unable to beat wireless companies at their own game, essentially losing their stake in the major product line of our time: mobile devices.
So what is the answer for RadioShack, if it manages to survive at all? I remember back in the late 1990s, RadioShack had begun an initiative that I remember being promoted internally as "Return to Mother," a return to an emphasis on the low-revenue but high-profit products that had been the staple of RadioShack for decades: parts, connectors, batteries, accessories, and so on. While it is true (perhaps sadly, according to a Ham Radio operator like me) that most people just don't need many of these items anymore either, there is a burgeoning new "maker" culture emerging, at least here in the Bay Area, California.
The maker culture is not limited strictly to electronics, as it also has elements of mechanical engineering, software engineering, chemical engineering, and so on. However, in an age when it should be easier than ever to design and build something yourself (this was, indeed, part of the counterculture vision of technology innovators such as Steve Jobs), it is ironic that your average person has no idea where or how to go about making something themselves, designing a prototype of an idea, or inventing a device to solve a problem.
My vision of RadioShack's future, then, is for RadioShack to become the go-to place if you have any desire whatsoever to make or design something yourself:
Need materials? Go to RadioShack.
Need components? Go to RadioShack.
Need programming advice? Go to RadioShack.
Need help with designs and plans? Go to radioShack.
Need a distribution channel for a new invention? Go to RadioShack.
And so on.
I am optimistic that a new niche could be found as a one-stop-shop for makers and their insatiable need for devices, tools, and materials. The sad reality, however, is that RadioShack likely no longer has the capital to retool its entire product line and its several thousand stores. RadioShack has essentially burned through its cash reserves to the point where it no longer has the flexibility to find its new niche for the 21st century. Makers will always find a way; there is something in their makeup that keeps them driving to invent and innovate. RadioShack could find its new niche by making life better for makers, and perhaps by ditching its attempt to be a Jack of all Trades, providing everything to everyone with an outdated product line that no longer serves any real purpose, even for its most loyal of customers like me.
For any makers who stumble on this blog post, what would you like to see RadioShack become? What kinds of products or services would appeal to you most as a maker? What do you struggle to find as a maker that RadioShack could provide if it were miraculously able to reinvent itself and become a maker store?
I wish RadioShack well. We parted on good terms the first time, and I even went back to work for them once when I was teaching philosophy down at UC Santa Cruz. (Hey, you can't be too proud about how you earn your extra funds!) RadioShack has always been in the back of my mind as a place to land if other career options don't work out. I was always amazed by the interesting and intelligent and insightful people that were somehow drawn to working at RadioShack in its heyday. Perhaps there is hope for RadioShack yet, if the handwriting of its inevitable demise isn't already on the proverbial wall.
Resources on the History of Radio Shack:
