RadioShack Plans Reinvention
Posted by: Douglas MacMillan on August 04, 2009
Most people visit their local RadioShack to pick up mundane electronic accessories like batteries and headphone adapters. Would a new brand name and flashy products make the store more of a destination for big-ticket items?
RadioShack is willing to try something new. On Monday, the Fort Worth company announced a marketing campaign that will dub its store “The Shack” in TV, print, and online ads. The branding effort comes on the heels of a deal RadioShack made in July to bring T-Mobile handsets to its stores.
Like other electronics retailers Best Buy and Wal-Mart, a lull in consumer spending has severely impacted sales at RadioShack, which has announced layoffs and numerous store closings in the past year. But unlike big-box stores with larger footprints, RadioShack is unable to sell a great deal of big items with high margins, like TVs and computers, because of its smaller stores.
The “Shack” ad campaign will highlight the area where the store wants to compete: mobile phones. “You will see a real focus on mobility and wireless products from leading brands in our new advertising,” RadioShack chief marketing officer Lee Applbaum said in a press release. In addition to T-Mobile, the retailer sells handsets used on Sprint, AT&T, Nextel, and Alltel. It carries Palm’s popular smart phone Pre – but not its chief competitor, Apple’s iPhone.
This strategy is not unique to RadioShack, according to Steve Baker, an analyst at market researcher the NPD Group. He says that because two-thirds of handset sales in the U.S. are made at the stores of the carriers themselves, “all the retailers look at that as a huge opportunity.”
Will the move towards mobile work? “I think the concern is that they need to get people to think of them beyond capacitors and transistors – that’s been their struggle,” Baker says. “They have to find some way to connect and be a little more current in terms of perception.”
RadioShack seems to be acknowledging its need to get more hip with its “Shack” marketing campaign, though not everyone is sure it will have that effect.
“What you don’t want to end up doing is spending marketing money overcoming current perceptions” about the word shack, says Martin Bishop, director of brand strategy at San Francisco consultancy Landor Associates. People are already inclined to associate the word with basketball star Shaquille O’Neal, the B-52’s song “Love Shack,” or actual, wooden shacks, he adds.
RadioShack recently made another attempt to modernize its brand: it’s sponsoring Lance Armstrong’s American Pro-Tour cycling team.