Earlier this month, RadioShack filed for bankruptcy after 94 years in business, and announced it would sell possibly half of its stores while closing the rest of its 4,000 stores in the U.S. Saying goodbye to this iconic brand isn't easy, especially for those of us trying to keep our companies fresh and attractive. However, there's a silver lining: we can learn from RadioShack's mistakes.
The company, once known as the world's largest electronics chain, set out years ago to make a name for itself as the go-to brick-and-mortar for electronic gadgets. In its prime, it was a household name, the one-stop shop for technology needs. But at one point, it just stopped evolving, and became a punchline.
RadioShack remained stuck in the '80s and '90s as cooler, cheaper options like Best Buy and Amazon took center stage. The store failed to keep up with fast and furious technological advances, and didn't adapt to consumers' ever-changing needs.
Lack of Innovation
When Amazon was founded in 1994, the competitive landscape changed forever. It was the dawn of the Internet age, and the website slowly became a worldwide giant as it innovated.
First, the site began expanding its inventory to not only sell books, but also everything from electronics, to DVDs, to clothing, to even groceries. Then it jumped into the e-book reader market with the Kindle, which led to the Kindle Fire a few years later, a fine opponent to the iPad.
Meanwhile, Best Buy was taking the necessary steps to remain a valuable option in the face of a competitor like Amazon. After struggling for a few years trying to get its groove back, the retailer changed its business model, implemented a matching prices policy and introduced the concept of stores within stores, partnering with leading brands like Samsung and Apple.
But as others changed, RadioShack's showroom remained the same grey, outdated display of technology. The stores didn't even have enough variety in their inventory to fall prey to "showrooming," where customers visit a store to evaluate a product but opt to purchase at a cheaper online retailer, usually Amazon.
False Starts
RadioShack may not have been innovative, but they fought against the current to stay afloat. The company tried to update its business model, moving towards mobile tech. In fact, by 2013, 52 percent of the company's sales were from mobile devices.
They also tried to rebrand and refresh the old image. Last year, one of the most memorable Super Bowl commercials was RadioShack's own, "The '80s Called: They Want Their Store Back." The hilarious spot recruited some of the most memorable '80s stars and signaled a turn for the better in the company. Even the stock market responded well to it, with stocks rising 7 percent the next morning.
But in its efforts to compete, RadioShack lost sight of who they were. Technology changed rapidly, but their gadgets did not, and many of them were rendered obsolete as smartphones came into the picture with apps that easily replaced them. They didn't focus on the right things, and that led to fruitless attempts to become relevant once again.
The Right Focus
What should have the company focused on? For starters, their staff. When employees are clear about who they are and their objectives, it can serve as a fantastic opportunity to further your company's goals and have ambassadors for your brand. But instead, the Internet is filled today with more than its fair share of RadioShack horror stories, which tell about low morale and overworked retail employees who are clueless about company culture.
There was a huge missed opportunity to innovate in other areas, as well. While RadioShack might have not been your first choice when shopping for a new laptop, for example, it could have been the perfect place to learn how to use that laptop, whether it was via an app, in-store classes, or online tutorials. Company leadership knew the ship was sinking, but had no idea how to help the stores evolve. Their energy was spent trying to compete, when RadioShack could have created a new concept instead.
The inability to evolve led RadioShack to extinction. Other companies have an opportunity to learn from its mistakes. In the end, what matters is that consumers find your products or services useful and relevant. If they move on, and you are unable to, your fate is sealed.