My first job as a teenager was working for Radio Shack, the year was 1990 and I was a senior in high school looking for a job to pay for my ride. I already knew I had a love for computers and consumer electronics so Radio Shack was a good fit. I wound up working for the Tandy corporation for my entire college career.
Almost 30 years later and Radio Shack is on the ropes going down for the count. Where did they go wrong? How could they have saved themselves. I have a few theories that I would like to share.
Why did Radio Shack Fail?
- Late entry into the online world – Radio Shack was a brick and mortar business that relied on tons of direct marketing and consumers viewing the “Radio Shack catalog”. As we went into the DOT-COM boom and the Internet took hold Radio Shack was late to the starting gate. They never placed enough emphasis on internet sales, however they did ask for the last 4 digits of your phone number for every transaction.
- Loosing focus on its own branding – As Radio Shack saw the future writing on the wall they tried to adapt to the Best Buy model and began stocking name brand merchandise. Forgetting the tens of thousands of customers who enjoyed their Realistic speakers or Optimums stereo systems. Don’t forget
the DuŌphone answering machines and most of all Tandy computers. - Loosing focus on its staff – When I was a Tandy employee my compensation was commission based. We basically made 7.5% of every dollar sold and a few bonuses or “spiffs” as they were known on items corporate wanted us to focus on. If you knew your stuff a college kid could make a decent living. A few years after I left the company I stopped back at one of my old stopping grounds and found the company reduced commissions to 1% plus an hourly wage. This reduction forced all the talented sales staff to move on to their next jobs. There was no longer any incentive to learn the brands and features and make loyal customers. What remained was mostly a young staff that was clueless to help you.
