Radioshack has been left behind in the brave new world of electronic trade. The company’s recent announcement to close 1,100 stores across the U.S. is another move in the life of a company that has repeatedly been criticized for not moving on with the times. The company, originally opened 90 years ago, will close down its most under-performing stores. How much longer its remaining 4,000 stores survive in an industry dominated by online retail giants such, as Amazon, is a question that will be making the rounds of business media after the news.
The announced closures were anything but a shock to the business world. Reports of the company’s losses have been hitting business headlines for years now and revenues for the fourth quarter of 2013 were the worst yet. The company suffered a net loss of $191.4 million compared to $63.3 million for the fourth quarter in 2012. A holiday season of low consumer spending and poor store traffic due to severe weather did not help matters.
The news will be partly attributed to Radioshack being left behind in the brave new world that is the online trade of electronic goods. Online retailers such as Amazon reported revenue of $25.6 billion yet still saw stocks drop by 8 percent due to not meeting market expectations, while Wal-Mart,reported fourth quarter earnings of $1.67 a share, a ten percent increase on the previous year. And while Radioshack have made a move into online retailing, it has been a case of too little to late as Amazon and Wal-mart got in there early, built their reputations, and cornered the market.
Radioshack’s move into online retail is testament to their attempts to not get left behind in the brave new world of online electronic retail. The company have also made other efforts to modernize in the face of criticism and falling revenues. But just as their move into online sales was too late, so was their attempt to re-invent themselves as wireless phone specialists. Special offers of $50 I-phone 5s and newer brands at discount prices for limited periods came as smartphones grew became one of the most competitive markets in the electronics industry, easily snapped up on the net. The company, who, unlike Amazon, have overheads to maintain the running of brick and mortar stores, also modernized its stores to entice customers inside, but refurbishments have not been enough to keep it from being another bricks and mortar victim to show-rooming, the practice of consumers trying out electronic devices in stores and then going online to purchase them at cheaper prices.
Even Radioshack’s self-lampooning advertisement in the Superbowl has not been able to save it from being left behind in the brave new world of online retail. The advert, showing 1980s popular culture icons such as Teen Wolf and Alf rummaging through a Radioshack store, may have got viewers laughing, but it has not got them into the stores. With their sofas being as great a place to do their shopping as watching sports, and, more crucially in times of economic crisis, cheaper, the chances of viewers actually getting up and buying goods at Radioshack are as low as the struggling electronic retailers revenues.
Commentary by Christian Deverille