Incompetence destroyed this company. There's a maker revolution happening right now and they can't figure out how to harness it. Imagine if each radio shack was a hammarspace and had been adding tooling steadily for the last 5 years.
I (naively) popped into a Radio Shack about two years ago thinking that they might have some random electrical parts I was looking for. Once I got past the cellphones, remote control cars, and junk too cheap to be sold at Sharper Image, I found the four drawers of parts in the back corner, mostly empty. Perf boards were like $6/piece, and they sold an Arduino starter kit for like $200.
I remember the store nearest my house growing up having multiple AISLES of just power adapters and barrel connectors, etc, and it was a tiny store in a strip mall sandwiched between a Baskin Robbins and a Subway.
I could probably say similar things about Maplin Electronics in the UK, in that a large part of the store is given over to selling miscellaneous tat. Although, in fairness to them:
- Most of the cabling and audio components are out on the shopfloor, which is handy,
- They do tend to (always?) have a component counter at the back, which fronts onto their warehouse/storeroom space, where you can usually get what you need. I guess that stuff is too easily stolen to have out front.
The one by my house in Seattle was REALLY good. And had a good selection of misc. robotics parts (even if at ridiculous prices). The one by my house in Portland is lighter in some areas but has more Pi/Arduino/etc. variations in stock.
In both stores it was at least three aisles worth of things like components, perf boards, various breakout kits, enclosures, etc.
The also typically have an okay semiconductor parts selection, but you have to cross-ref with an NTE part number (hopefully they'll have the catalog nearby to look up any specific parts).
I think there's room for a 'maker' retail store. I don't think it was feasible for a company the size of Radioshack to make that transition. You probably wouldn't want it to be in expensive mall real-estate, for one, and you probably wouldn't want to start with 5000 stores, in lots of places where people into that kind of thing don't live, but focus on places where you actually have a high percentage of people in tech industries-- California, DC, New York, etc..
Radio Shack is a case of terrible management unable to see the writing on the wall and adapt. The idea that Radio Shack can't compete against online electronics stores (such as Amazon) is false. They just failed to focus on a market and stick with it (specifically electronic enthusiasts).
For example, what if they partnered with Raspberry Pi, and offered a Pi store inside of Radio Shack where you can buy Pi's, accessories, and talk to Pi experts. Copy the Apple store experience for this vertical.
According to this post[1], they've sold 10 million Raspberry Pi's. At an average price of $35 each that represents a 350 million dollar market. While not huge, there is certainly opportunity to capture accessories. See cell phone cases as an example.
Even assuming they sold every single Raspberry Pi at 100% profit, 350 million across 5000+ stores is 70k USD per store. Even with a lot of accessories sold, that's probably not enough to keep the whole operation afloat.
The problem with a strategy like that is it's hard to be better than everybody else who has the same idea. Perhaps their mistake was opening so many stores in the high-rent areas in the first place; it didn't really mesh with their original core market.
I took the grandparent post to be one example of how to execute a greater strategy. This would presumably be one way to appeal to electronics enthusiasts, among many.
Selling resistors and breadboards to hobbyists doesn't pay the rent on a physical store with employees. Raspberry Pis can be obtained online for cheap and you only have to wait a few days for shipping.
Radioshack could have lived on just fine catering to the enthusiast and hobbyist market but these days it's unacceptable for a publicly traded company to make modest profits. They're expected to make investors wild profits and show quarterly growth, that's just not going to happen in the market Radioshack was in so they tried to pivot out of it and failed horribly.
The trouble is that Radioshack tried to pivot from being an enthusiast and hobbyist store into a more general retail electronics store. They are small storefronts in strip malls not suited for carrying large stocks of big ticket items like the Best Buys of the world. Because of this limitation they focused on small consumer electronics, mostly phones, and pit themselves against both big box retailers and the Telephone Carrier who run their own shops in the very same strip malls.
Why not stock the highest end developer laptops for example: until recently I had a very hard time finding a Dell XPS 13 in a store, but I was reluctant to order by mail since I wanted to physically see it first and see how the keyboard feels.
There's a term in retail: "showrooming" - where savvy customers like yourself will try things out in a shop and then order them for cheaper online. This is what tends to happen with higher end items as the online/in-person difference is so great.
This! There's a single store I found within 10 miles of where I live that directly sells anything close to this. I'd go a lot more frequently if not for the 30 - 45 minute drive (with traffic). I'm not alone either.
I went to a local Radio Shack the other day to get a cheap soldering iron.
There was one person in the store, sitting at a fold-up table with a Sprint table cloth over it. They explained that I wouldn't be able to buy anything except cell phones because the Radio Shack employee had gone on break.
I've said for 10 years now that Radio Shacks problem was its focus on cell phones. Employees were highly incentivised to sell phones, and everything else suffered as a result.
Just as mentioned in another comment...Anyone can sell phones now, and once that became a reality, they began competing with much leaner business models that focused on phone sales with much lower overheads.
Great piece, but I'm now reasonably certain that clicking around in the SBNation comment section got my Netflix account hacked in some sort of CSRF. It's fixed now, but I won't be visiting that site again outside of incognito mode... although I guess this would be more Netflix's fault.
The Netflix agent assured me that this could only have happened if my "email got hacked". Hmmm, I'm not sure that Netflix is the high-value target there...
About ten years ago I needed a capacitor for a failed power supply. I drove to RS, found a replacement cap in the parts bin (which was virtually hidden in a corner in the back of the store), and went to the register.
The cashier gave me a disdainful look and didn't even want my money. He just handed the cap back to me and told me to leave with it.
These days I just order parts off of eBay. They arrive in a few days, and they're really cheap. The parts usually work, too.
I recall reading an article a few years ago about RadioShack in that era. It said that employees weren't just rated according to how much they sold in total, but also by the average amount of each sale.
So that cheap capacitor would have dragged down this employee's performance rating and compensation. It was better for him personally to ignore a capacitor disappearing out of the store than it would have been to ring it up and take your money.
I wish I could find the article; there was a story in it almost identical to yours.
In a way this reminds me of when HN used to track not just your total karma but also your average karma. If you cared about such things, it meant that every time you posted a comment you had to think not only about whether it was a worthwhile comment, but also whether you expected it to move your average karma up or down.
If you had an average karma of 10, then you wouldn't want to post a comment that you figured may only get 5 upvotes - even though those votes meant that five people appreciated your comment.
To me at least, HN seems like a friendlier place now that average karma is gone. And RadioShack would have made more money if they hadn't made their salespeople worry about lowering their average sale.
But, like some of the wacky schemes I've come up with, it must have seemed like a good idea at the time.
Can confirm that this is how it was, at least for the ~6 months I worked there in the early 2000s. I'd recently been laid off and saw RS was hiring. Being somewhat technically inclined and having fond memories of the place in my youth I figured it was as good as any other low-end retail gig while I looked for something better. This was not the case.
I'm not going to get into any long RS stories but in terms of sales averages, it went roughly like this as far as I can recall: Actual hourly wage was around the state minimum but you could make commissions and "SPIFF" bonuses for selling things like cell phone contracts (since they got a cut of those). The cell phone thing was straightforward - sell a phone contract, get a flat amount added to your paycheck.
But the commission thing was awful and things were set up so that it was incredibly difficult to get commission. You had to sell not only a certain amount, but rather your average for each day of a pay period had to be at a certain level in order to even qualify for commission. If you were unable to hit those goals every day, you got no commission, even if one of those days you sold thousands of dollars worth of merchandise.
So they would make sure to give everyone at least one or two short shifts a week or shifts during crappy hours so that it was nearly impossible to make commission. Combine this with the sales meetings you had to attend out of town every (month? can't remember) it was almost like you were losing money by working there.
Thankfully I found some other crap job that at least paid better and in time, I moved on to better things but man...that place was awful.
Many retail stores are starting to fall into this metrics trap. For example, just a few days ago there was a report[0] that GameStop now dis-incentivises sales of new games & console hardware in order to promote used hardware, even though most customers would likely prefer new over used.
Retail shops need to be cognizant of how aligning to certain metrics can be short-sighted and ultimately drive away customers, but that reckoning has yet to arrive.
DigiKey is amazing. It only takes two days to ship stuff from their Thief River Falls, Minnesota warehouse to your doorstep somewhere in Europe.
Easily the most maker-friendly distributor, too.
IIRC, Radio Shack also ran one of the first customer tracking programs. From my recollection it started circa 1998, until about 2003 ? Every purchase you made they'd ask for your full mailing address.
Even in the 1970s RS was asking customers for address info. The salespeople were really adamant about it, since they were yelled at for not getting it from the customer.
dick smith - the australian version of radio shack did exactly the thing and went under last year. they ended up getting bought out by an online retailer.
i used to go into them as a child, do the hobby boards and that pretty much got me into programming. I stopped going later in life as the electronics isle got smaller and smaller.
Now we have JayCar -- only sell electronics, long isles of caps and components. DIY everything. Seem to be going strong! They are semi used by tradies, but we still have other wholesalers who mainly service that market.
Dick Smith didn't die. It was murdered [1]. Long story short, a private equity firm bought out Dick Smith from Woolworth's using money that was on Dick Smith's balance sheet. They did some huge write-offs to lower the (paper) value of the business, sold inventory at a steep discount to boost revenue, and then put the company back on the market, with a P&L statement that looked good, but masked the fact that the company was a husk of its former self. As expected, investors bit, and the private equity firm walked away with a half-billion dollars of profit, while the later investors were left holding the bag.
Jaycar is not bad. The one I've seen (Sydney, opposite QVB) has a decent choice of components. I didn't know that Dick Smith used to sell boards and components initially (I have lived in Australia just for a few years).
I always wondered if they supported and built a community of teenagers by providing classes, competitions on electronics related projects, and computer hadware, they could have retained a passionate base of customers for long time.
20 years ago, I used to work for Computer City and they treated us like Radio Shack's embarrassing little brother.
The writing was kind of on the wall, even back then. Metric and spiff driven sales staff. They were making quick money without thinking about long term viability.
They eventually sold off Computer City to CompUSA but I was long gone by then.
