I'm rooting for RadioShack if for no other reason that it sports an identity that Landor developed back in the 90s. It's also encouraging to see that, after years of cost-cutting and in spite of the tough economic environment, RadioShack is tweaking its business model and investing in a new marketing campaign to reinvent itself. Unfortunately, it seems to me that the new approach has some serious flaws:
1) Business model/customer experience: RadioShacks are not big stores. That's part of the business challenge. Where Best Buy can make money selling big TVs with big margins, RadioShack has to find something else, something smaller. Mobile phones fit the bill and are already driving 1/3 of sales and that's before a new deal with T-Mobile. The challenge I see with this expanded role for phones is that it will crowd out the rest of the business, especially the traditional business of accessories and replacement parts. It's already hit-and-miss whether you actually find the part you are looking for when you go to a store and, with less space, there'll be less chance. And who, going into a store to find a cable stupidly left in a hotel room or some part for something that you should really be getting rid of anyway, wants to be power-sold a new and unwanted phone? Perhaps the plan is to get out of this traditional business or, move that business completely online?
2) Call us "The Shack": The part of the brand reinvention that has generated the most interest and comment is the plan by RadioShack to refer to itself as "The Shack" in marketing promotions. The logic behind the idea is that Radio sounds old-fashioned and that "The Shack' is more friendly. But brands need to be careful going down this path. There's a contrived familiarity about The Shack that is similar and just as bad as "The Hut" (a shortened version of Pizza Hut). It's we the customer that get to decide whether we want to give a brand a nickname. Can you imagine sending an email to all your contacts on Facebook and LinkedIn saying: "Hi there! Just wanted to let you know that, from now on, I'd like you to know me as (insert over-friendly nickname here)?"
3) That doesn't matter. Call us "The Shack" anyway: There's another problem with using "The Shack." "The Shack" already has meaning to people and none of these various meanings are particularly helpful to the cause or consistent with the message. What does it mean to you? Shaquille O'Neal? The Love Shack (B52s)? An actual wooden shack? The Shack is just not a particularly classy, quality kind of word. Focusing on it just reminds people of that.
So, overall, I'd say I'm not particularly optimistic that the new campaign is going to work. What do you think or are you all-Shacked-out already? I think I've said all I can on this issue what with this and, last week, two press interviews on the subject. Thanks to both journalists for calling me and selecting quotes that made some sort of sense:
1) RadioShack Plans Reinvention: Douglas MacMillan, Businessweek
2) RadioShack would like you to call it 'The Shack': Theresa Howard, USA Today
Tuesday, August 11, 2009