RadioShack’s Got A New Groove

When was the last time you really wanted to go to RadioShack? I vaguely remember needing to find a remote controlled car for a Christmas gift in the 90’s, but it’s been a very long time ago.

That’s been the electronic retailer’s problem for a while as few find them relevant anymore. Most of their stores are small and in crowded malls, for one thing. Today, if you are looking for phones or computers you probably go to big box retailers like Best Buy or Target if you are comparing brands. Online companies are taking their share of this market too.

Just this week, the company issued a statement by their new CMO, Jennifer Warren, that the company is overhauling its image. They started with a new TV ad that she hopes will attract a younger consumer to their stores. The spot features young women in scanty attire gyrating to the song “Blurred Lines” by Robin Thicke, promoting Beats by Dr. Dre’s Pill speaker. The spot has over 1.5 million views on YouTube already and she is hoping that it will be the start of getting her employees, merchants and the market excited about RadioShack again.

She said that the company will rethink its store design and will group products by brand and not category. In addition, the company has a new brand platform and tagline, “Let’s Play”, that she hopes will help RadioShack become the neighborhood technology center. “We want to be a destination for the DIY (do it yourself) customer with interactive experiences,” she said. “Employees will be told to sell the entire store not just a specific product.” Warren is intent on retaining the company’s traditional DIY customer base, the people who shop for cables, small computer gadgets and electronics.

RadioShack has had a series of problems starting with their name. While the company has been around for decades and has built equity in the brand, the market has changed and their name doesn’t have anything to do with their products anymore. Management tried to rebrand and take the company in a different direction in 2009 with the push to promote their mobile phone business. It was an acknowledged disaster as it drove off their DIY customers. First quarter same store sales fell by 6% for a $43 million dollar loss.

Many of the company’s serious DIY customers feel disenchanted with RadioShack as customer service is not great by reputation which makes it harder for them to find what they are looking for in the stores. Many still want to tinker with new technology and need a place to pick up their supplies, so this is a niche that RadioShack will continue to fill. The mobile phone business makes up about 50% of their sales so it will be important to include it in future plans but not concentrate on it.

Ms. Warren acknowledges that it will not be a fast turnaround. “This is not about an advertising campaign but a complete overhaul of our brand expression and messaging that will reflect it. Our entire HR department as well as operations and merchants will be involved in this new rebrand,” she says.

It seems that the entire retail category is experiencing the same issues with the marketplace and we will see some older brands die as a result. I hope RadioShack will be able to refocus its efforts and survive by listening to their customer base and attract a new one that likes their new groove.