How does the Rat Shack survive?

NotaSuv

FORT WORTH, TX—Despite having been on the job for nine months, RadioShack CEO Julian Day said Monday that he still has "no idea" how the home electronics store manages to stay open.


CEO Julian Day
"There must be some sort of business model that enables this company to make money, but I'll be damned if I know what it is," Day said. "You wouldn't think that people still buy enough strobe lights and extension cords to support an entire nationwide chain, but I guess they must, or I wouldn't have this desk to sit behind all day."

The retail outlet boasts more than 6,000 locations in the United States, and is known best for its wall-sized displays of obscure-looking analog electronics components and its notoriously desperate, high-pressure sales staff. Nevertheless, it ranks as a Fortune 500 company, with gross revenues of over $4.5 billion and fiscal quarter earnings averaging tens of millions of dollars.

"Have you even been inside of a RadioShack recently?" Day asked. "Just walking into the place makes you feel vaguely depressed and alienated. Maybe our customers are at the mall anyway and don't feel like driving to Best Buy? I suppose that's possible, but still, it's just...weird."

After taking over as CEO, Day ordered a comprehensive, top-down review of RadioShack's administrative operations, inventory and purchasing, suppliers, demographics, and marketing strategies. He has also diligently pored over weekly budget reports, met with investors, taken numerous conference calls with regional managers about "circulars or flyers or something," and even spent hours playing with the company's "baffling" 200-In-One electronics kit. Yet so far none of these things have helped Day understand the moribund company's apparent allure.

"Even the name 'RadioShack'—can you imagine two less appealing words placed next to one another?" Day said. "What is that, some kind of World War II terminology? Are ham radio operators still around, even? Aren't we in the digital age?"

"Well, our customers are out there somewhere, and thank God they are," Day added.

One of Day's theories about RadioShack's continued solvency involves wedding DJs, emergency cord replacement, and off-brand wireless telephones. Another theory entails countless RadioShack gift cards that sit unredeemed in their recipients' wallets. Day has even conjectured that the store is "still coasting on" an enormous fortune made from remote-control toy cars in the mid-1970s.


Day admitted, however, that none of these theories seems particularly plausible.

"I once went into a RadioShack location incognito in order to gauge customer service," Day said. "It was about as inviting as a visit to the DMV. For the life of me, I couldn't see anything I wanted to buy. Finally, I figured I'd pick up some Enercell AA batteries, though truthfully they're not appreciably cheaper than the name brands."

"I know one thing," Day continued. "If Sony and JVC start including gold-tipped cable cords with their products, we're screwed."

In the cover letter to his December 2006 report to investors, "Radio Shack: Still Here In The 21st Century," Day wrote that he had no reason to believe that the coming year would not be every bit as good as years past, provided that people kept on doing things much the same way they always had.

Despite this cheerful boosterism, Day admitted that nothing has changed during his tenure and he doesn't exactly know what he can do to improve the chain.

"I'd like to capitalize on the store's strong points, but I honestly don't know what they are," Day said. "Every location is full of bizarre adapters, random chargers, and old boom boxes, and some sales guy is constantly hovering over you. It's like walking into your grandpa's basement. You always expect to see something cool, but it never delivers."

Added Day: "I may never know the answer. No matter how many times I punch the sales figures into this crappy Tandy desk calculator, it just doesn't add up."

bobman1235

Is that from the Onion?

NotaSuv

bobman1235 wrote: »

Is that from the Onion?

yes it is Bob

sucks2beme

He's probably the only CEO to actually say what we all know.
They are clueless. He's redesigned the RS stores to look like a damn
Cellphone store and removed anything that I really need out of the store.
It WON"T survive the handywork of an over educated idiot.
I'm sure he'll pull the police scanners and small parts out of the store
soon and rename it something cute. RIP RadioShack.

bobman1235

sucks2beme wrote: »

He's probably the only CEO to actually say what we all know.
They are clueless. He's redesigned the RS stores to look like a damn
Cellphone store and removed anything that I really need out of the store.
It WON"T survive the handywork of an over educated idiot.
I'm sure he'll pull the police scanners and small parts out of the store
soon and rename it something cute. RIP RadioShack.

He didn't actually say it, it's a satire.

I guess that's a compliment to the writers of the Onion though, they can take something this ridiculous and make it believable.

polkatese

That's a very convincing fiction story indeed.

Perhaps, in the same context, have anyone ever imagine life without Seven-Eleven, even though we don't really shop there?

Jstas

Even if it is satire, there is some modicum of truth behind it. But honestly, I think the satire hit Radio Shack's allure right on teh spot:

"Every location is full of bizarre adapters, random chargers, and old boom boxes

Radio Shack has what nobody else carries. All those adapters and such are what most people go there for. Radio Shack has it. They always do. Ever go to a Home Depot or a Lowes and try to find an power adapter for the motorized Santa that sits in your window? I have. You know who had it when I needed it? The 'Shack. The Enercell batteries are also one of the highest rated brands out there and often placed over Duracell and Energizer.

That is where the bread and butter is for them. That and it's gadget land. But you can still buy a CB Radio there. Not even Pep Boys sells them anymore. HAM Radio is still alive and well and Radio Shack is one of the few that still services that industry. You can still get a number of electronic parts there from resistors and capacitors to breadboards and switches. Most of the common stuff is available in the store. The rest is still available from the catalog which is still huge.

Radio Shack has been able to support the consumer gadget junky while still catering to the electronics geek. I think that is their secret.

As for pushy sales staff, I really haven't found that. Even if I'm looking for something, most of the understand that when I say "I'm good, I can find it on my own, it's more fun that way, thanks." they are cool with it.

The 'Shack ain't that bad and if you can find one still staffed by electronics nerds, even better!

Jstas

polkatese wrote: »

That's a very convincing fiction story indeed.

Perhaps, in the same context, have anyone ever imagine life without Seven-Eleven, even though we don't really shop there?

Yeah, I can deal without a 7-Eleven.

Now take away my Wawas and we'll have a problem!

(and yes, I go to Wawas all the time.)

NotaSuv

bobman1235 wrote: »

He didn't actually say it, it's a satire.

I guess that's a compliment to the writers of the Onion though, they can take something this ridiculous and make it believable.

They do a great job, always a must read each week

polktiger

Radio Shack is the electronic version of the local hardware store. They don't have a huge inventory, their prices aren't that great, but they carry the exact unique item you need to finish what you are working, which the big stores don't carry.

Who has an SPL meter that is not from radio shack? Need to get your PS2 Guitar Hero guitar to operate on a PS3? Don't go to Best Buy or even Gamestop - go to radio shack. Honestly I don't know what I would do without my neighborhood Radio Shack or hardware store.

sucks2beme

Have you been in there in the last month. WTF.
They have dropped about half of their inventory.
The old timers aren't too happy. Note: if the RS employees
know your name when you walk in, you're a hardware geek.
I guess I should look up this "onion " site. It seems they
must be mind reading the RS employees.

Jstas

sucks2beme wrote: »

Have you been in there in the last month. WTF.
They have dropped about half of their inventory.
The old timers aren't too happy. Note: if the RS employees
know your name when you walk in, you're a hardware geek.
I guess I should look up this "onion " site. It seems they
must be mind reading the RS employees.

Depends on what store. The mall stores are geared toward the clueless soccer mom looking for a cheesy present for dad that he doesn't really want or a cheap alternative to some uber-expensive gadget some kid wants. Alot of the mall stores are very geared towards cellphone, GPS and computer stuff too. Most Radio Shacks will sell you a Sprint, Verizon or AT&T phone and often times they have different models than what is in the branded stores from each carrier.

If you go to a standalone store in a strip mall or something, they will have much more nerd stuff available. Also depends on the area. High falutin' neighborhoods with the standalone stores get the mall store treatment. But the couple around here that are in the "Great Unwashed" neighborhoods still have the nerd-geared inventory and some even still have the old, gray, slotted MDF pegboard shelving systems and the gray carpeted shelving with the red beading on the shelves. Like a Radio Shack is supposed to have!

One thing I miss in the car audio display boards. Those were fun! When they were getting rid of them, we went running around to every Radio Shack hoping to snag the power supplies that were being tossed but some other nerd beat us to them and we didn't get any. They were beefy too. Some had 1 dual rail 60A/60A power supply (120A total) some had 2 60A supplies and others that were newer had 4 or more 30A supplies. Those ratings were constant draw too with peak ratings 60% more. It's hard to find beefy power supplies like that.



BTW, I know most will think I am nuts but if you want decent quality patch cables at an affordable price, Radio Shack's Gold Series is pretty good for the price. The standard stuff isn't so hot though but will do in a pinch. But then again, the standard Radio Shack patch cables come in lengths you don't often see from other manufacturers. I have a 30 ft. set at home so I can put a video game system on the coffee table and still reach the TV.

sucks2beme

Jstas wrote: »

Depends on what store. The mall stores are geared toward the clueless soccer mom looking for a cheesy present for dad that he doesn't really want or a cheap alternative to some uber-expensive gadget some kid wants. Alot of the mall stores are very geared towards cellphone, GPS and computer stuff too. Most Radio Shacks will sell you a Sprint, Verizon or AT&T phone and often times they have different models than what is in the branded stores from each carrier.

If you go to a standalone store in a strip mall or something, they will have much more nerd stuff available. Also depends on the area. High falutin' neighborhoods with the standalone stores get the mall store treatment. But the couple around here that are in the "Great Unwashed" neighborhoods still have the nerd-geared inventory and some even still have the old, gray, slotted MDF pegboard shelving systems and the gray carpeted shelving with the red beading on the shelves. Like a Radio Shack is supposed to have!

Here in the shadow of RS HQ, all the stores have been re-designed.
A lot of the stuff I used to go the RS for are gone. I now have to go
to electronics surplus or Fry's for what I need. I build a lot of custom
serial cables for using equipment console ports(the original cables grow feet).
I guess I'm going to have to stockpile some stuff.

obieone

They must be doing something right. As far as why there still around, I can only guess it's because, YDI didn't go national back in the 70's.
Here's a link to their website. Talk about a nerds paradise, this place, each floor is 4x the size of a RS, and 3 floors of stuff.
IIRC, back in the 70's they used to have some pretty nice audio equipt.

http://www.youdoitelectronics.com

Face

Both local Rat Shacks(within 2 miles of each other) always have customers and are sometimes pretty busy.

cfrizz

That was a hysterical read!!!!

But yup when I need a doohickey, I know that I will probably find it at Radio Shack. All I do is come on here & say I need to do such and such & someone always post a link to said doohickey that can be gotten at RS!

brettw22

Jstas wrote: »

One thing I miss in the car audio display boards. Those were fun! When they were getting rid of them, we went running around to every Radio Shack hoping to snag the power supplies that were being tossed but some other nerd beat us to them and we didn't get any. They were beefy too. Some had 1 dual rail 60A/60A power supply (120A total) some had 2 60A supplies and others that were newer had 4 or more 30A supplies. Those ratings were constant draw too with peak ratings 60% more. It's hard to find beefy power supplies like that.

Now, you already know that your nerd factor was high to begin with, but I have to say this was especially nerdy...... ha

inspiredsports

The local Radio Shack here used to be packed to the ceiling with inventory. Today you could drive a semi through it without hitting a single SKU.

I did buy a twin pack of aerosol DeOxit Cleaner and Pro Gold at some ridiculously high price, and a .5A fuse for my VOM (the clerk initially gave me a 5.0A and said it would be OK.

I agree, 2009: R.I.P. Rat Shack

mhardy6647

cfrizz wrote: »

That was a hysterical read!!!!

But yup when I need a doohickey, I know that I will probably find it at Radio Shack. All I do is come on here & say I need to do such and such & someone always post a link to said doohickey that can be gotten at RS!

Not no mo' :-(

Nowadays, R/S's old ecological niche is filled by places like
www.partsexpress.com and www.tubesandmore.com

Here in MA, we're lucky to still have, e.g.,
www.electronicsplus.com (10 minutes from me in Littleton Common)
www.youdoitelectronics.com in the shadow of route 128, known far and wide as "you blew it electronics"

Y'all in B-more still have http://www.baynesvilleelectronics.com/index2.ivnu (not 5 minutes from where I went to high school)

Ron-P

Yeah but online shops can't get me that part I need that day. I'll spend more if I can get it the day I need it. I actually shop at my local Rat Shack quite often, it's more expensive but they've always had what I needed and it's a block away. Convenience outweighs cost the majority of the time with me.

sucks2beme

I just went over this evening to look at an on sale scanner to replace my old one.
1000 channels! The smart guy was on duty. You know the guy.
Scanner on his belt 24/7. He knows everything in the store. All the
other stores send customers to him to set their scanners up.
We talked for about 40 minutes while I decided to buy. He knows where
radio towers are at. He knows who's on what system type.
Old school guy. Remember those guys?

John in MA

I've been a Radio Shack customer for years and years. Within the last five years it's really taken a downturn in stocked items and customer service. Half the stuff I used to buy, and maybe 3/4 of the stuff I enjoyed looking at in the catalogs is gone.

I never go there now except when I need a flashlight bulb or obscure battery in an emergency. And to pay for my cell phone. In past years I'd use them for all kinds of parts and components. Not any longer.

schwarcw

It's a good place to buy Monster cables and speaker wire.:p

I probably spent $100 at RS each year for miscellaneous BS either because of convenience or availability. I suspect there are tens of millions of people like me who spend $100 a year there. They make about 40% gross margin on just about everything. That's why they are in business and making a profit.

Danny Tse

I don't know....but I spend a good amount of $$$ at the Shack the last few weeks.

Koss Pro35 headphones $10.00 (regularly $40.00)
Koss KSC75 clip-on earphones $6.00 (a head-fi.org favorite, regularly $25.00)
Plantronics Bluetooth headset $20.00 (regularly $40.00)
Radio Shack 3 ft Gold Series audio inteconnects $5.50 (regularly $15.00)
40-pak Enercell AA batteries $10.00
Giant Radio Shack home theater surge protector $16.00 (regularly $80.00)

I can't get these items cheaper anywhere, online or not. The closest Best Buy is more than 10 miles away, whch is why I still frequent "The Shack".

spwuinmk67

schwarcw wrote: »

It's a good place to buy Monster cables and speaker wire.:p

I probably spent $100 at RS each year for miscellaneous BS either because of convenience or availability. I suspect there are tens of millions of people like me who spend $100 a year there. They make about 40% gross margin on just about everything. That's why they are in business and making a profit.

That and their commission structure for employees is completely different from what it was even a few years ago. Big items like tv's and ipods and cameras, the employees see $0 from, instead of the 3% like it used to be, so thats more profit for them. Anything that the company makes a decent percentage on, like the headphones, memory cards, the little parts and crap, they pay 2.75% to the employee, if they sell a certain dollar amount per hour.