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.
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