Will RadioShack find new life inside HobbyTown’s stores?

Discussion
Photo: RadioShack
Jul 30, 2018
Tom Ryan

In yet another comeback attempt, RadioShack plans to install RadioShack Express “store-within-a-store” shops inside select locations of HobbyTown, the hobby and toy franchisor.

RadioShack will initially launch 60 locations and then expand over time to 100 of the approximately 140 HobbyTown stores across the country. According to the New York Post, the first in-store shop takes up 500 square feet of a 6,000-square-foot store in Mooresville, NC and shows the Radio Shack signage outside. The HobbyTown partnership is designed to bring RadioShack to more suburban markets.

“We are excited about the HobbyTown partnership, as it will allow us to re-engage and directly serve our core hobby and DIY communities,” says Steve Moroneso, chief executive officer of General Wireless Operations Inc., which acquired RadioShack in 2015.

HobbyTown’s website announced the partnership on the front page of its website along with images of a digital soldering station, batteries, hookup wire, a drone and a circuit board. HobbyTown sells a wide array of radio-controlled helicopters, boats, airplane and drones, as well as scale models, games and educational toys.

“This will expand the RadioShack footprint quickly and enhance the product selection and services offered at HobbyTown locations,” said HobbyTown president Bob Wilke.

In 2017, RadioShack filed for bankruptcy for the second time in a little more than two years after a failed attempt to co-brand its stores with Sprint. It emerged in January with its e-commerce site and 400 standalone stores in rural locations, down from a peak in the U.S. of more than 7,000 in the nineties.

Mr. Moroneso told the New York Post, “Our strategy today is to not own bricks-and-mortar locations.”

In a similar move in 2013, RadioShack opened electronics sections inside University Co-op locations at the University of Texas at Austin with additional openings at other college stores expected across the country in a partnership with the National Association of College Stores. Bankruptcy proceedings ended that program.

RadioShack also briefly opened electronics kiosks inside select Blockbuster locations in 2001.

DISCUSSION QUESTIONS: Do in-store shops make more sense for RadioShack than opening its own stores? What do you see as the keys to success for the RadioShack Express shops?

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Braintrust
"If RadioShack can’t make it there, they won’t make it anywhere on their own again."
"This could work, especially if they focus on young people, STEM areas and promote kits for school projects. There may be a whole new audience here."
"RadioShack seems to have had more relaunches and fresh starts than I’ve had hot dinners!"

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26 Comments on "Will RadioShack find new life inside HobbyTown’s stores?"


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Mark Ryski
BrainTrust

This battered and beaten brand’s time in the sun has passed. While there may be some opportunistic opportunities for RadioShack to play the “store-within-a-store” game, it sounds like a lot of smoke with not much fire — HobbyTown is a good example of this. Does anyone think this concept actually has legs?

Art Suriano
BrainTrust

I think this is a smart move for both RadioShack and HobbyTown. The store-within-a-store concept has shown substantial success for many companies such as Sephora located inside J.C. Penney. People know and still remember the RadioShack name. The victory will come from what products RadioShack carries that have consumer appeal, the locations of the stores, what type of traffic those locations have and how well the in-store RadioShack staff can “wow” the customers. If RadioShack gets those things right, I can see this being a winning formula with an opportunity for both HobbyTown and RadioShack to expand their partnership.

Ken Lonyai
BrainTrust

This is a good test of the market in that it’s far cheaper to operate a store-within-a-store than a stand-alone location and the demographic is a great fit. If RadioShack can’t make it there, they won’t make it anywhere on their own again.

Bob Phibbs
BrainTrust

Irrelevance cannot be undone. Seriously a soldering gun as a symbol of a brand people are looking for? I’ve heard zip consumers bemoaning the death of this brand which means zip are looking for it to return.

Dave Wendland
BrainTrust

Just as a phoenix may rise from the ashes, the goal of RadioShack soaring once again is remote. For those familiar with my views of retail, you know that I’m a huge fan of pop-up stores and that I’m often inspired by collaborations that enhance the value of two or more entities.

My challenge with RadioShack Express is one of relatability. The image of RadioShack is dated. The term “radio” is no longer relevant to shoppers. And the recognition and identity value it brings to HobbyTown is very limited.

Now I’m not saying that the types of products stocked by RadioShack are not relevant to HobbyTown shoppers. My issue is with the naming and the association with the failed RadioShack model. Why not take this opportunity to reinvent and to re-stage rather than to regurgitate?

David Weinand
BrainTrust

Wow, the brand that just won’t die. Conceptually, this makes sense since HobbyTown sells electronic-based items and there will always be a need for those items to be repaired or tinkered with. It is definitely a lower cost proposition than trying to bring back stand-alone stores and it could be a viable model. However, I don’t believe the RadioShack name has a lot of brand equity left so I’m not sure how much incremental value this will give HobbyTown or whether RadioShack can expand this approach to other retailers.

Ricardo Belmar
BrainTrust

Honestly, what will be next, an announcement that RadioShack is opening store-in-a-store concepts in Sears stores? I’m not sure where else this concept would work besides HobbyTown.

I can’t remember the last time anyone said to me they wished they could go to a RadioShack to buy something. The brand equity is gone — it’s in the same boat as Circuit City and that ship has sailed! While conceptually, I’d agree with you, it’s too little, too late in my opinion.

Neil Saunders
BrainTrust

RadioShack seems to have had more relaunches and fresh starts than I’ve had hot dinners! That said, this partnership seems logical, but it’s clearly a niche offering so the opportunities for significant scale are very limited.

Tom Dougherty
BrainTrust

RadioShack has needed a rebranding for a dozen years. The market has spoken and the management continues to turn a deaf ear.

Ask what RadioShack means with an expanded customer base and you will hear the problem immediately. The brand as constituted is unimportant and irrelevant.

The problem is not putting a store in a store, per se. They might as well open up stores within stores partnering with Stein Mart unless they address brand permissions.

Lyle Bunn (Ph.D. Hon)
Guest

The deep geek in me wants to see people and families gathered around a science project. But desire will not suffice. It will take links to science clubs or new ones being started, thoughtful consideration of project focus, smart associates and a celebration of scientific mentality. Memo to RadioShack (again); retail and scientific inquiry don’t mix.

Trevor Sumner
Guest

Computing and robotics kits are growing in popularity among children, which is a great overlap between the two brands. The partnership is a win-win with a reduced cost footprint for RadioShack and additional technical appeal for HobbyTown customers. The partnership has the building blocks to succeed, albeit to a much more limited hobby market than mass market electronics.

Lee Kent
BrainTrust

RadioShack used to be a go-to store for certain items but it has been out of the public mind for so long now. Could this concept work? Maybe, if marketed correctly and to the right consumer. I used to be a hobbyist in my day and I built my first computer with RadioShack. Ah the days. If I had my druthers, I would love to see them come back in that hobbyist niche but alas that day has likely passed. For my 2 cents.

Mike Osorio
BrainTrust

If it is to find a sustainable future, this is how RadioShack will do it. In as much as HobbyTown will be successful, I don’t see any reason why this won’t be successful for both parties. HobbyTown could have decided to offer the same product and services without leasing to RadioShack. They did it because they knew that the brand RadioShack still has cachet for this category and they’d do better by leveraging RadioShack’s ability to attract that consumer vs. trying to build the category on the HobbyTown name alone. I am cautiously optimistic that this will work for both.

Ed Rosenbaum
BrainTrust

I can understand General Wireless looking to get some type of return on their investment. HobbyTown could be a good place to begin the test. But any aspirations of returning to the traditional brick-and-mortar world is probably not going to happen. RadioShack had a tremendous run in its time. And it tried valiantly to survive. But its day in the sun has passed.

Doug Garnett
BrainTrust

This seems to make sense for RadioShack and I hope they’re able to make it work.

That said, will it make sense for HobbyTown? What are they giving up in order to make room for RadioShack and will it pay out?

Only time will tell.

Jeff Sward
BrainTrust

I really like the idea of RadioShack trying to evolve into a Genius Bar of sorts. But the brand seems to be rooted in antiquity. It’s not unheard of for a brand to shed an old skin and emerge reinvented. So if you’re going to evolve, EVOLVE already! The premise of a Genius Bar makes a lot of sense for HobbyTown. Why evolve with an antique partner? Go all the way!

Camille P. Schuster, PhD.
BrainTrust

This could work, especially if they focus on young people, STEM areas and promote kits for school projects. There may be a whole new audience here for them.

Matthew Stern
Staff

The RadioShack brand, its signage, etc., doesn’t immediately strike me as having much of a charge left in it. However there could be something to the idea of really going back to the retailer’s roots as a niche electrical engineering spot (rather than its latter-day incarnation as a moribund cell phone shop) with this store-within-a-store. The images of soldering HobbyTown is using to promote the relationship seems to indicate that this is the plan.

The real opportunity for differentiation there, it seems to me, would be in offering electrical engineering/tech classes from experts for people of all skill levels, having hobbyist-related lectures you might not get elsewhere and maybe even partnering to offer related industry certifications. Joann Fabric is adding community-building, educational offerings to try to revive its place in the crafting space — perhaps RadioShack (in its store-within-a-store iteration) could get back on the map by doing the same in this highly-technical niche.

Rich Kizer
BrainTrust

I really don’t think too much of this. Five-hundred square feet of circuit boards, batteries, wires, drones and a soldering station in a 6,000 square foot merchandised box … it just doesn’t sound like an explosive brand awareness strategy to me. Creating an in-store presence for RadioShack I think is a real challenging assignment. This one just doesn’t feel good, but I do hope that RadioShack proves me wrong, because they sure are not afraid to try something!

Ryan Mathews
BrainTrust

Yes, it makes more sense than RadioShack opening its own stores, but that’s not the same thing as making sense. The DIY business has moved online, at least at supportable scale.

Peter Charness
BrainTrust

Perhaps the reason RadioShack perished after living 9 lives was because there is not much of a market for hobbyist electronics anymore, online, inside a RadioShack store, or in a corner of a HobbyTown?

Patricia Vekich Waldron
Staff

When I hear RadioShack, all that comes to mind is batteries, which you can get anywhere, including Amazon, these days.

Ken Morris
BrainTrust
Ken Morris
Retail industry thought leader
1 year 2 months ago

Many of today’s toys and hobby projects have a technology component and when things break or customers have technology questions, typical toy store employees are not qualified to help. Adding RadioShack store-within-a-store concepts in HobbyTown stores will offer technical expertise for its customers from a company that is known for “you’ve got questions, we’ve got answers.” Adding this value added service is a benefit to HobbyTown and its customers.

From a RadioShack perspective, it is a low-cost way to keep the limping brand alive and drive some incremental revenues. They keep trying….

James Tenser
BrainTrust

Just because some of us aging nerds retain a nostalgic love for RadioShack doesn’t mean the brand has a massive future ahead. Co-locating makes some sense for RadioShack, but I’m not so sure it will drive significant traffic for the host HobbyTown stores.

Here’s a counter-proposal: Should HobbyTown adopt the Joanne Fabric model (as Matthew suggests here) and create a “hangout” space where drone and robot-creators may gather and share tips and techniques? Include a high-end 3D printer that may be rented by the hour. Access to tools and a long-tail virtual assortment of parts could make HobbyTown an experiential retail leader.

None of this requires the RadioShack brand to work, however.

Kai Clarke
BrainTrust

RadioShack is trying to add value by opening the same concept stores within HobbyTown’s stores, when the model will not work in today’s environment. No matter how this is presented, RadioShack is still an intermediary trying to add value as a middleman, when today’s market has moved past this retail model. Consumers won’t pay more to keep RadioShack’s margins in the black when there are so many other direct retailers who offer the same products online, or in a limited retail brick and mortar capacity that have no middleman mark-up to deal with.

Kenneth Leung
BrainTrust

RadioShack’s brands started off as an electronic hobbyist store for parts like batteries, transistors and soldering gun etc. I just don’t know how people remember that legacy and how it translates to the modern consumer. I am curious what merchandising these stores are going to carry. This is a long shot for RadioShack, but probably a cheap one for the owner of the brand and the operator to try one more time.

wpDiscuz
Braintrust
"If RadioShack can’t make it there, they won’t make it anywhere on their own again."
"This could work, especially if they focus on young people, STEM areas and promote kits for school projects. There may be a whole new audience here."
"RadioShack seems to have had more relaunches and fresh starts than I’ve had hot dinners!"

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