Retail Management Success Lessons from the Failing of RadioShack
It has been said that in every crisis there’s an opportunity. This is certainly true in sales and customer service; every missed sale or customer service failure provides a lesson learned – an opportunity to do better the next time around.
This article presents a retail failure of epic proportion, that of RadioShack corporation. Once a thriving retail giant, the company is now on life-support and fading fast. Over the past four years, the retailer’s market capitalization has fallen by nearly 97% and with 10 straight quarters of losses their demise appears eminent.
RadioShack’s end would put them on the list of failed consumer electronics retailers that includes Circuit City, CompUSA, and Tweeter – all down and and out in recent years.
It would be easy to point blame on the changing marketplace with more and more electronics consumers shopping (and purchasing) online and that is certainly a threat that RadioShack did not successfully counter. Best Buy, by comparison, is profitable today due in large part to meeting that threat head-on by growing their e-commerce business with increased product availability online and speedy shipping.
But it’s not that easy…
True world-class companies understand that nothing really matters unless they have a great team of happy, engaged employees who believe in the mission at hand and are committed to providing the very best experience to shoppers and the very best service to customers. I call this PRIDE and it’s a very real element that you can see, feel and experience when doing business with world-class retail, hospitality and professional service businesses. Great managers foster PRIDE as part of creating a winning team culture.
So how has RadioShack been doing on that front? The answer to the question is covered (from many angles) in a disturbingly fascinating article published just before Thanksgiving by a former employee of RadioShack.
In the article the author, Jon Bois, provides a unique perspective of what was going on behind the curtain during his 3 1/2 years with the company.
Interestingly, Jon and I share a very similar recollection of the early days of RadioShack. An excerpt:
I bet RadioShack was great once. I can’t look through their decades-old catalogs and come away with any other impression. They sold giant walnut-wood speakers I’d kill to have today. They sold computers back when people were trying to understand what they were. When I was a little kid, going to RadioShack was better than going to the toy store. It was the toy store for tall people.
I agree with that sentiment. Sadly, much of Jon’s account can be summed up in this excerpt:
But as this company has spent the last decade-plus trying to save itself, the happiness of the employees has always been the first to go overboard. Its store managers are worked so hard that they become unhappy, half-awake shadows of themselves. Labor laws have been brazenly ignored. Untold hours of labor haven’t been paid for (when I quit, on good terms and with two weeks’ notice, they withheld my final paychecks for months and wouldn’t tell me why). Lawyers have been sent to shut down websites that have bad things to say about RadioShack. Employees who make a few dimes over minimum wage are pressured, shamed, and yelled at as though they’re brokering million-dollar deals.
RadioShack is a rotten place to work, generally not a very good place to shop, and an untenable business to run. Everyone involved loses.
Ouch! That’s certainly not the image RadioShack, or any company, wants to project to the public. But, as is so often the case, happy, engaged employees will be great advocates for their companies. Unhappy, disengaged employees will be (along with unhappy customers) the biggest critics.
Here’s the whole article >
A eulogy for RadioShack, the panicked and half-dead retail empire
No doubt there will be some that dismiss Jon’s account as the rant of a disgruntled former employee. Just know this.. even if the story is 50% true it is still 100% disgraceful and wrong. And, from these failings, there is a lesson to be learned for all retailers.
Make a Great Day!