Wednesday, February 4, 2015

Amazon Might Want Some Radio Shack Stores

What a shame that Radio Shack couldn't figure out a way to rebound from a dying business strategy and re-emerge as a leader again in a new mobile world.  But stuck with a name that reflects old technology, and a marketing campaign that fell flat, Radio Shack is on the verge of bankruptcy.

But others may benefit from the Radio Shack failure.  Amazon has watched as Apple has used a retail strategy to build stronger customer relationships and grow business.  Microsoft is also starting to venture into the retail world.  And now it might be Amazon's turn to create a retail presence.  By opening up stores using some of the Radio Shack footprint, Amazon would be able to let customers better interact with its product line, especially as its products are not currently getting much market share.  They could push better the Amazon brand and value and let consumers interact with its devices, including the Kindle, Fire tablet, and of course its Fire smartphone.  It would also provide a point of purchase for service issues as well as marketing events.

The challenge of acquiring Radio Shack locations might be the initial size of some stores.  In many malls, they occupy a much smaller square footage than say an Apple store and thus would limit foot traffic.  But that might be a short term problem as they renegotiate leases with malls for larger spaces.  Having a retail presence seems a strong strategic move to compete better in the product marketplace. 

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