5 ms·
Radioshack's demise was precipitated by a number of factors. In no particular order the proximate causes were: 1. A drop in retail sales of electronics from in
by s_q_b 12y ago
Radioshack's demise was precipitated by a number of factors. In no particular order the proximate causes were:
1. A drop in retail sales of electronics from in-person stores as the average consumer purchases more and more online, benefitting from the cost savings due to economies of scale and lack of overhead provided by online retailers such as Amazon.
2. A rapid fall in demand for the consumer products Radioshack offered: camcorders, cassette players, digital cameras, and prior to that CB radios. That trend accelerated as the functions of various devices were taken over by smartphones.
3. A failure to recapture the resurgent maker movement, despite a rather valiant last minute effort.
Radioshack used to be a vital resource for makers. Mostly they stocked breadboards, transistors, capacitors, etc. in at least one third of their retail space.
When I was a child, and my father first introduced me to electronics in the mid '90s, I loved Radioshack and visited at least once a week. The staff at Radioshack could give advice that my dad (a chemical engineer and MBA by education, civil engineer by profession, who built a simple computer out of transistors in the 1970s from scavenged parts from pinball machines when he was 13, so no novice) didn't know.
A few months ago a local maker space opened and I enthusiastically signed up for classes on their machines. Ready to jump in, I figured I would build out some software while I waited to be safety certified on the Tormach CNC and various 3D printers, but their inexpensive Raspberry Pi and Pi competitors were sold out.
Out of curiosity, I stopped into Radioshack, since there was one in the same mall. Lo and behold, most of the space formerly occupied by those parts was now filled with modern maker components: Arduinos, Beaglebones, shields to add capabilities, elegant project cases, various add-ons. I picked up everything I needed to get my project up and running on a Beaglebone Black.
It was so much more convenient than waiting for Amazon to deliver that over the next couple days I went back for more components. Radioshack, for the first time in years, seemed like a place I wanted to frequent, a stopgap between my local maker space and Amazon. But there was one essential element missing: expertise. The staff was mostly clueless about the differences between the products they stocked.
Radioshack failed because it failed to pivot to a more successful business model in time. They tried a scatter-shot approach, pinning their hopes on various experimental focal points: cellphones for a time, high end stereos, video games, etc.
Hours worked is simply an unlikely cause of the company's decline. Americans are still tinkering, and the mythos of the lone inventor is alive and well in American psychology.
- api 12y agoI'd say #3 jumps out as the most tragic and obvious. It reminds me of Kodak's failure to get ahead of and dominate digital photography when they had the IP, the funding, and the brand to do so. I'd say the demise of both companies looks strikingly similar in terms of a failure to execute on the obvious. Radio Shack should have been stocking things like the Raspberry Pi and the Arduino and offering classes, workshops, and opening maker space 2-3 years ago at least. You've gotta hold a core market, and Radio Shack's was always the enthusiast. Consumer stuff was always secondary for them -- if not as a profit center definitely in terms of brand and customer loyalty.
- s_q_b 12y agoKodak's case was very interesting too. I have an aunt that worked at Kodak's medical imaging division in the early 2000s (if memory serves.) At the time, Kodak was actively taking the most profitable new divisions and selling them off to keep the core film business in operation. Essentially it was a case of executive-assisted company suicide. My aunt's division was sold to the Canadian conglomerate/private equity firm Onex, and the employees for the most part retained their jobs. Revenue has been flat at around $2.6 Billion, not having grown much under Onex, which as a PE firm focused initially on cutting costs (terrible strategy in the land grab that was medical imaging in the mid-2000s.) Sure, Kodak made a huge strategic error, one that is common to older firms, to stick to its original bread and butter of film at the expense of new profit centers, even as that medium collapsed. But the real lesson is that the process for helping companies die is in dire need of study and executive education. There has to be a better way than the status quo.
- api 12y ago"But the real lesson is that the process for helping companies die is in dire need of study and executive education. There has to be a better way than the status quo." Priceless. Kodak's actions do indeed strike me as insane. I can't even fathom the reasoning that must have led to them. It must have emerged from some set of perverse incentives at the executive level, like pay based on sales numbers in the film business or some other kind of ham-fisted silly bonus structure.