RadioShack’s Wireless Strategy
Even established retailers have to mix things up once in a while to remain fresh and relevant to their customer base. No retailer may need that more than RadioShack. To say that it’s been a rough couple of months for the national retailer would be an understatement. But the company has been making a number of changes to improve its well-established position, some of which could rub off on other dealers who sell wireless products and services.
RadioShack’s year did not start off well. A recent academic credentials scandal involving the now-resigned President and CEO David Edmondson was a dark mark for the company, and it was only exacerbated by a fourth quarter drop in net income of 62 percent. Much of the problem in profit was attributed to falling average selling prices on higher-end items such as televisions, and the lower performance of these kinds of products at RadioShack stores.
But there have been changes—many which started before all the bad news— that could lead to better fortunes in the future. For starters, RadioShack is concentrating more on selling wireless products and services. At the beginning of the year Radio Shack moved into new territory by taking on an 11-year contract with Cingular Wireless and ceasing a relationship with Verizon Wireless. Long-time partner Sprint still remains an important vendor, as well. But the retailer realized that it would take more than just new vendor relationships to attract customers, especially in a market where service-provider-operated stores are so dominant.