retail news in context, analysis with attitude

The New York Times has a story this morning about the fading retail company that is RadioShack, which has found itself almost completely out of step with the nation's electronics needs and desires - people don't buy component parts the way they used to, its big bet on mobile phones has left it enmeshed in a market that is highly competitive and low margin, and it has stores that tend to be small, dingy and low-impact, especially when compared to entities like the Apple Store and e-tailers like Amazon.

The company has tried to close more than a thousand stores, or a quarter of its fleet, but its creditors have resisted that tactic. And it brought in a new CEO, Joseph C. Magnacca, who had seen a measure of success at Duane Reade, hoping that he could unearth some latent retailing magic at the chain.

But here's how the Times describes RadioShack's continuing problems:

"Mr. Magnacca and his team have put a plan in place to try to turn around the brand, and fill its stores with unique, higher-margin merchandise.

"The company hopes to replace some of its dingier, outdated stores with those awash in bright light and clean lines, sometimes nearby. They have opened 125 new or extensively remodeled stores around the country, one of them on the Upper West Side of Manhattan.

"The store is carefully maintained, organized and interactive. A display of Beats by Dr. Dre headphones, dotted with small rectangular mirrors, greets customers at the front of the store, where shoppers can test both the sound and the look. An array of phones and tablets are available for tapping and testing. In the back, someone deep into a D.I.Y. project can find a small soldering iron or a breadboard socket.

"But just 10 blocks away right in front of a subway entrance, a small, narrow RadioShack illustrates the neglect that characterized so many company’s stores and repelled customers. Despite some new signage and merchandise — all RadioShack stores have received at least some basic upgrades — dank gray squares provided carpeting and bits of the storefront’s siding were peeling away from the building. The smartphones on display cannot be tested; only stickers affixed to their fronts show what the home screen looks like."
KC's View:
Add RadioShack to the list of retailers that simply did not judge the market correctly, did not pay attention to how consumers were changing and how other retailers were innovating, and soon found itself in a virtually untenable position.

I hate to say it, but it hard to imagine circumstances under which RadioShack is able to avoid the same graveyard where we find the carcasses of companies like Circuit City, Borders, Virgin Superstores, and Blockbuster Video. And every other retailer needs to see the RadioShack saga as a cautionary tale.