The Critical Differentiators for RadioShack
Nov 19th 2012 7:40PM
Updated Nov 19th 2012 7:46PM
With e-commerce running through the retail industry like a bull through a china shop, retail stores need to be on top of their game not only to make a decent profit, but also to simply survive. RadioShack (NYS: RSH) , facing strong competitors such as Amazon.com, is no different. Can RadioShack compete in today's retail industry?
To help answer this question, check out our new premium report on RadioShack. For a taste of what's offered inside the report, read the following excerpt that discusses RadioShack's retail performance.
A retail overview
Success in retail depends on brand, customer service, and operational ability. There are few barriers to entry and not many competitive advantages, meaning that retail companies usually earn razor-thin profit margins. How does RadioShack stack up in terms of these critical differentiators?
Founded in 1921, RadioShack does have a well-known and iconic brand. The brand holds a value of $1.25 billion according to Interbrand, making it the 36th most valuable retail brand, between Toys R Us and Dick's Sporting Goods. Valuing brands is far from scientific, however, and that value can easily drop. To help protect the brand value, RadioShack's image is undergoing a refresh with advertising firm Grey New York, the same firm responsible for E*TRADE's talking and stock-trading baby.
Of course, brand value means nothing if it is eroded through poor customer service or poor inventory management. The 2011 Temkin Customer Service Ratings ranked RadioShack as the absolute worst retailer in terms of customer experience. Former CEO Jim Gooch talked about further training for store associates to help explain cellphone plans and upsell customers on accessories and warranties, but this new training may miss the point. Customers have disliked the hard-sell tactics at Best Buy, and emulating them could further ruin the customer experience.
On the operations side, RadioShack has had plenty of issues. In its recent focus on selling mobile phones and services, it has failed numerous times. Its first failure with smaller-footprint kiosks occurred with a short trial within Blockbuster. Another failure happened in special kiosks located within Sam's Club. Yet another started in 2008 when the company tested three smaller-concept stores with various consumer electronics under the name PointMobl; the PointMobl stores closed in 2011. Now, RadioShack has ramped up Target Mobile locations, with over 1,500 as of mid-2012.
More in-depth analysis available
That was a sample of what is available in our thorough premium report on RadioShack. As RadioShack faces a different store mix, new management, and the chance of a collapsing business, our report breaks down the most pertinent information for investors. It comes complete with updates on the latest news and analysis for RadioShack. For your copy, click here now.
The article The Critical Differentiators for RadioShack originally appeared on Fool.com.Fool contributor Dan Newman has no positions in the stocks mentioned above. The Motley Fool owns shares of Amazon.com, Best Buy, Dick's Sporting Goods, and RadioShack, and is short RadioShack. Motley Fool newsletter services recommend Amazon.com and Best Buy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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