Tuesday, November 05, 2013

THINKMAP 017: Why Is Radio Shack Broken, And How Can We Use Digital To Fix It?

Radio Shack was the perfectly oiled machine.

During the late 60’s, 70’s & 80’s, they pioneered innovations in electronic calculators, personal computers, mobile phones and satellite television.

Remember the place where you and your dad went to buy batteries for the remote controlled car? That was Radio Shack.

Remember the place where radio and electronic nerds used to hang out and bond over their favorite mechanical hobbies? That was Radio Shack.

Remember the place where you could geek out with the guy behind the counter without caring who was watching? That was Radio Shack.

Remember there place where you could always go in an electronic pinch and always walk away with something useful? That was Radio Shack.

No wonder they became the world's largest electronics chain. Thank you very much, Mr. Tandy.

It wasn’t just a store, it was destination.

But somewhere around the late 80’s and 90’s, the brand started to struggle.

Big box retailers like Best Buy were the new kid in town. Iconic design companies like Apple were the hottest girl in school. And innovative technology like mobile was the shiny new object.

This perfect storm of competition, innovation and cultural transformation sent shockwaves down Radio Shack’s organizational spine. And by the time the new millennium came around, Radio Shack began to putter out like the very machines its batteries once powered.

Shares devaluated. Sales plummeted. Executives departed. Competitors advanced. Margins dropped. Relevancy vanished. Employees walked. Customers complained. Image deteriorated. Executives departed. Debt accumulated.

Worst of all, their enterprise value was on a collision course.

Everyone was waiting for Radio Shack to die. A few highlights from my research:

The media. Did you know MSN Money reported them as the second worst company to work for in 2013?

The employees. Did you hear Glassdoor reported their CEO has a 38% approval rating!

The customers. Have you ever read the store reviews from infuriated customers who call them a bloated mess of a mobile phone store?

The shareholders. Can you believe for the first time in over a decade, Radio Shack experienced an annual loss?

The chorus was global: “How the hell are they still in business?”

So, as big brands tend to do in this situation, Radio Shack panicked. They started pulling out every trick in the book to be cool, hip and relevant. Partnerships with celebrities, social media contests, concept stores, clever ad campaigns, hip rebranding efforts and new executive leadership.

And some of those tricks worked. Radio Shack’s efforts did see traction for a short period of time. Especially with the digital generation. Thank you very much, Dr.Dre.

But that’s the problem. Radio Shack doesn’t need tricks.

They need to be useful. Digitally.

Isn’t that what made them successful in the first place?

And even though big box retailers like Best Buy and Amazon have been chipping away at their clientele, Radio Shack still owns a three assets that those brands would kill for:

Ubiquity, immediacy and memory.

They’re everywhere. What’s cooler than having platform?
They're right now. What’s hipper than not having to wait a day for a part?
They’re already invited into people's memories. What’s more valuable than being a fixture in your customer’s childhood?

And, it’s not like Radio Shack is the first brand to fall. Brand turnaround is an economic phenomenon. Just ask Dominos, Red Cross, Xerox, Taco Bell, Pampers and Best Buy.

They all fell. But they also had a plan. A digital one.

So here’s mine. Radio Shack, tune into this:

*  *  *  *
Take Back The Shack
#takebacktheshack is groundswell movement that enlists geeks, makers, techies and employees in the DIY project of a lifetime: Rebuilding Radio Shack. 

1.     Mission and Vision: We’re going to own what we’ve built. We’re going to create monopoly on a story and a set of expectations. We’re going to build an experience that consumers would go out of their way to experience again.
2.     Employee Development: We’ll revise our hiring/training practices to view employees as essential parts that make our corporate machine work. Treat employees like a million bucks, they’ll treat customers like a million bucks, and that’s exactly the kind of money we’ll make.
3.     Influencer Marketing: We’ll use crowdfunding platforms as a talent agency for our rebuilders. We’ll attach our brand to the brightest young talent, helping them achieve their maker dreams. The best way to be cool is to find––and fund––people who are.
4.     Internal Communication: We’ll build a modern day ham radio that uses Arduino, Twillio or Raspberry Pi technology to open a channel of communication between customers, frontline employees, branches, managers and leadership.
And that’s just the beginning.
Radio Shack isn’t a squealing mechanical dinosaur waiting to be put out of its misery.

It’s an impassioned phoenix poised to rise from the digital ashes.

Want to help me oil this machine?

Send an email to scott@hellomynameisscott.com and we’ll take back the shack together.