The End of Radio Shack May Be Near By all accounts, the writing on the wall at RadioShack reads "We May Soon Be Out of Business." Many news sources, including this one from the Los Angeles Times, are reporting RadioShack will likely declare bankruptcy fairly soon. The reports that RadioShack may fold should not be a surprise and only adds to a long list of retailers that have called it quits in the last ten years. As we noted back in 2011, undoubtedly the Internet is to blame for many of these closings. Online retailers have dramatically altered the retail landscape, and the store-based retailers that did not see this coming early on have found themselves in deep trouble.

Yet in the case of RadioShack, there are many more issues that have led them to this point, with much of it centering on not fully understanding how their customers had changed. When RadioShack was in its glory years, circa 1970s, their product line was heavily skewed to do-it-yourself electronic products that appealed not only to hobbyist and tech-nerds but also to the average consumer who needed an electronics part, such as a TV antenna. Back in the day, RadioShack was about the only retailer offering electronic products within a retail setting, though there were also many mail order firms doing the same. In fact, RadioShack was so well-known for specializing in electronics that it was quite common for customers of all types to think of RadioShack first when in need of electronic products and parts. Even more, back in the late 1970s and early 1980s, they were also were likely on most personal computer buyers' short list of sellers.

However, by the 1990s things changed. Namely, a company perceived as selling what were viewed as technological and somewhat innovative products failed to keep pace with evolving trends. As one example, for many years RadioShack continued to write receipts on paper rather than utilizing computer-entered transactions. For a company selling computers, this seemed very strange. This along with product offerings and staff that did not keep up with innovation in computer and cellphone technology led many customers to lose the mental connection RadioShack once had with technology. Of course, it also did not help that category killers, such as Best Buy and more recently online sellers, such as Amazon, entered and rapidly became the go-to retailers for tech products.

While declaring bankruptcy is no guarantee RadioShack will be out of business for good, all signals suggest this may be the case.

Ads and Product PlacementResearch studies conducted and written by marketing academics, such a marketing professors, can often be a challenge for the general marketer to follow. Much of this has to do with the way studies are written which is often in a style that is not easy to read as it is presented within complex sentence structure, mentions research-specific terms and issues, and may contain advanced statistical analysis. Additionally, some research papers are discussed at such an advanced theoretical levels that the untrained has difficulty grasping. Because of these and several other issues, few marketing practitioners bother to read current research published in academic journal.

However, marketing professionals should not be so easy to dismiss such research. There are many outstanding papers written each year that produce compelling results and may even prove quite useful in practice. For example, this story from Forbes presents results of a research study conducted by three business professors (the author of the story is one of the researchers).

The study focuses on the impact product placement within a television program has on advertisements appearing after the placement. Specifically, the researchers investigated how the placement of ads during different parts of a program affected three types of ads: 1) ads for the same product that was also in the product placement; 2) ads for the same brand though different product than what appears in the product placement; and 3) ads for competitors to the product placement. Data was then gathered by analyzing the set-top box viewing habits of nearly 500,000 households. The measurement behavior in this study was to see what percent of the audience tuned away when ads started showing.

There are several results presented with the most interesting being that for ad group #3, product placement was shown to increase viewers' desire to tune away. The implications of this and the other results are certainly something that even the non-trained research can understand, though these too are discussed in the story.

Retail Stores and Their CustomersBack in 2013 we discussed how retailers were having trouble with the evolving shopper activity called showrooming. Showrooming is where customers visit stores to examine and even sample products only to leave the store without buying anything. Instead, they access the Internet to purchase the product they experienced in the store with the purchase often being through a different retailer than the one they visited.

Even back in 2010 we noted how retailers were concerned with how shopping practices were evolving thanks to new technologies. In particular, retailers sensed they were losing sales as they observed consumers pulling out cellphones while still in the store only to see them head for the exit. The assumption then was that the cellphone served as a price comparison tool and, despite any assistant provided by the retailer, the cellphone wielding customer was only concerned about price.

Well, it now appears retailers' fear of significant lost sales due to showrooming may not be as bad as previously thought. As discussed in this Washington Post story, the results of a large-scale study conducted by Nielsen supports retailers' contention that many customers do follow the showrooming practice. However, the research also indicates that a large number of customers do the opposite as they first search for products on Internet retail sites only to make the purchase at a physical store. This practice, which some are calling "Web-rooming," has led retailers to respond with several services including the order-online-but-pickup-at-store option. The Web-rooming practice was also supported by research undertaken by Accenture.

The message from these reports is that retailers must accept that the world is changing and so too are consumers' shopping methods. The message to retailers is that in order to maintain a handle on how shoppers' practices are changing, retailers must frequently talk with their customers and find out what they want. They also must throw out old retail habits and adapt to what consumers really seek in their retail experience.

Problem With Direct Mail PromotionWhen creating a direct mailing promotion, a key roadblock facing marketers is to overcome mail recipients' reluctance to read the material. For postcard mailings, this is not too difficult as most people that pull it out of their mailbox will at least take a few seconds to see what the postcard is about. However, getting people to read becomes more challenging when the direct mail piece is contained within an envelope that must be opened. To encourage the opening, marketers look to such creative options as colorful envelope designs and using persuasive wording, such as "Limited Time Offer Included Inside."

Another method to entice opening is to include something inside that is evident when holding the envelope. For instance, including an item that provides extra weight or presents a slight lump or solid feel to parts of the envelope. People feeling that there is something different with the envelope, may be inclined to take a few seconds more to evaluate whether to open. Marketers hope this extra time will increase the recipient's curiosity and lead to higher open rates.

Depending on who will be receiving the mailing, the item included must be chosen careful so that the person who opens the envelope feels their time is not wasted. Marketers also need to make sure what is included is relevant to the recipient and, especially, not something that will annoy them.

Well, here is an example of a mailing promotion that includes an item that may be annoying to its recipients. As noted in the picture included with this blog post, leading pharmaceutical firm Biogen sent out a direct mailing to people who have been diagnosed with multiple sclerosis (MS). The mailing included a booklet that encourages MS patients to respond to a series of questions and make notes related to the issues presented. To help them make notes the mailing included a small, flat yellow pen, which gave part of the envelope a slightly firmer feel.

The issue with this promotion is the pen. A key physical symptom for many MS patients is the inability to grasp small items, such as this pen. Consequently, for many people with MS receiving this promotion, they are certain to come away annoyed and wondering if the company behind the promotion is really sensitive to the physical issues facing the people they are targeting with their products.

Problem With Buying a FranchiseHistorically, if an entrepreneur is looking for the best option for being successful in a store-based retail business the best option is to join a franchise operation rather than trying to start a retail outlet from scratch. As we discuss in our Retailing tutorial, a franchise is an agreement by one party (the franchisee) to operate, for a fee, a business that has already been established by someone else (the franchisor). As we note, one important advantage of such an arrangement is that the franchisee often gets a running start in attracting customers since the business has already been established by the franchisor. Consequently, there likely already exists some name recognition in the area where the franchisee's retail outlet will be located. Additionally, a franchise buyer can receive training in operating the business, thus flattening the business learning curve.

Also, those who are successful running a franchise can be rewarded by being approved to buy additional franchises to the point the some franchisees can own hundreds. For instance, many of the most successful franchisees own over 100 individual franchise locations.

Unfortunately, the idea that a franchise is a good way to get into retailing may be fading. According to this Wall Street Journal story, while the number of people buying into a franchise system has increased, the number of problems arising with franchise owners has escalated. One of the key issues is that the number of businesses listed as a franchise operation has skyrocketed. However, the quality of these new retail options has sometimes been difficult to determine. In many cases, doing due diligence when acquiring a franchise (which is highly recommended) has also become a problem as many franchisors are not entirely forthright with information.

For anyone interested in franchising, this story includes good information on what needs to be researched before committing to buying a franchise. It also lists important information sources that should be consulted.