Place Your Bets: Will RadioShack Still be Here Next Year?

RadioShack is a “nice” store. It’s clean, everything is always in order, the colors are bright. You can never get lost in one because they’re “boutique” size. And the people are very friendly and helpful and know their merchandise. If you ask a question, they generally have the answer.

But as the CompUSA store across the street from one of my local RadioShacks closes, I couldn’t help but wonder, if such a huge store as CompUSA couldn’t make it against tough competitors like Circuit City and Best Buy (also across the street), how can a little guy like RadioShack survive?

The brand certainly has its niche. If I need a cable connector or audio or cable wire, it’s the only place I would go. But the margin — and the sales volume — on that kind of stuff has got to be pretty low. Their signature products — stereos, tape recorders, answering machines, cell phones — all their competitors sell them.

The other thing is, there’s so many RadioShacks. There’s only one Best Buy. One Circuit City. One CompUSA (for now). One Home Depot. And three RadioShacks in my town — each with less than one-tenth the merchandise of these big guys.

So how do they make enough money to stay in business? How have they survived all this time? I know they’re franchises, not corporately owned, but these people have to compete with the giants and still make enough money to put food on the table.

And what if they don’t stay in business? Where am I going to go to get those few unique things that they sell? Perhaps Best Buy or Home Depot already sell connectors and wire and I just never noticed.

The way I see it, they have a limited time span from which to completely change their game plan or, by this time next year, RadioShack could be a brand no more.

So here’s what I think they need to do. Start a corporate rewards program. Rewards programs have a major influence over where I shop. Best Buy has a great program and I will definitely go there before going to one of their competitors because I get rewards points. Same thing with CVS. Stop & Shop sells the same merchandise. I can get cards at Hallmark and get gold crown points. But for my money, CVS has the better coupons and points rewards. So I take my business there. And I will go out of the way to get to a store where I am a loyal rewards shopper, if I have to.

If they don’t start a loyalty program to grow their customer base and build a loyal following, well… I shudder to think what could happen. Anyone want to bet me that they won’t be in business by this time next year?

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