Issue link: https://beckershealthcare.uberflip.com/i/490072
119 Strategy RadioShack's Fall Highlights New Decisions for Hospitals By Kenneth Kaufman, Chair, Kaufman, Hall & Associates, LLC R adioShack's history shows the difficulties of keeping up with chang- ing consumer product demands while balancing in-store and on- line assets and focus. In the 1960s and 1970s, RadioShack thrived by providing inexpensive electronics components to value-conscious do-it- yourselfers, according to a Bloomberg Business retrospective. RadioShack's many locations made it highly convenient, and its knowledgeable staff pro- vided expert advice. As the public's interest in electronic devices grew, RadioShack worked to keep pace. In the 1970s, CB radios were a popular item and a significant percentage of RadioShack's sales. When the public tired of CBs, RadioShack more than made up for the lost revenue with one of the first widely available personal computers — powered by software from startup Microsoft. However, soon competitors began offering improved personal computers at lower prices, leaving RadioShack with an unprofitable hardware business. In the 1990s, RadioShack attempted to broaden its reach by launching big- box stores. These provided a spike in revenue, but were unprofitable and ul- timately closed. "I don't think we knew how to operate those stores," said a former RadioShack executive. In the early days of cellphone adoption, RadioShack found a successful niche signing up new cellphone users, getting a portion of the sale and monthly service payment. Soon, however, wireless companies opened their own re- tail outlets and renegotiated their agreements with RadioShack. In addition, the rise of smartphones, with their diverse capabilities, cannibalized Ra- dioShack's sales of items such as GPS devices and answering machines. RadioShack's digital strategy, according to one former executive, suffered be- cause leadership was focused on problems with the company's stores. Online purchasing was not possible on RadioShack's website until the late 1990s, and RadioShack outsourced its e-commerce until recently. RadioShack was an early adopter of in-store pick-up of online orders, but despite this effort, the company's online sales actually declined 22 percent between 2003 and 2012. RadioShack tried to use Amazon's popularity to create in-store traf- fic by hosting lockers for picking up Amazon orders, but the expected sales bump did not materialize. As RadioShack strove for the right in-store and online strategies, its customer service — once a distinguishing feature — suffered. An article by a former employee describes RadioShack staff and management as perpetually ex- hausted, underpaid and subject to unpredictable demands and unattainable revenue expectations. In the end, RadioShack sought to tap the new hobbyist movement, offer cell- phone repairs and revamp its digital presence. However, these moves could not coalesce into the dramatic turnaround the company needed. What would Amazon do differently? With RadioShack's bankruptcy filing came news that Sprint would operate up to 1,750 of RadioShack's approximately 4,000 stores. Speculation on who will take over the other stores has centered on Amazon.