RadioShack, Woolworth’s, and Farriers

Sadly, RadioShack, once an American business landmark, is on the ropes:

Back when stereo was cutting-edge, RadioShack sold hi-fis driven by a smooth diamond stylus at one end, cloth-covered speakers at the other and a warm, glowing tube amp in between. The chain put CB radios in the hands of average drivers, let high school kids slap a cassette player in their car and produced a mass-market computer, the TRS-80, within months of Steve Jobs….

The company today is “broken,” chief executive Joe Magnacca said Tuesday as he announced plans to shut 1,100 stores, about one-fifth of RadioShack’s U.S. footprint, amid plummeting sales and losses that hit $400 million in 2013, triple that of the year before…

That is ironic for a firm that helped define modern electronics retailing and for a while was included alongside Apple among the leading consumer brands in the early years of the digital age.

What tripped the company is the speed with which those technologies took over, changed, morphed and made much of RadioShack’s stock in trade — think component sound systems, cathode-ray televisions and all the stuff those people in the commercial were carting out of the store — irrelevant….

That seems to raise the question: What if the culture passes you by? What if the ethic that built your business — that do-it-yourself, everyone’s-an-expert notion that made people want to match audio components in perfect ensemble and fix their headphone cord when it wore out — becomes less relevant to what people want and how they consume it?

Music “devices” don’t have needles, magnetic heads or other parts to maintain, even batteries. Headphones have become earbuds with soldered joints too small and insulated to mess with; when the cord breaks they get ditched. “Electronics” now means computer code and integrated circuits — and if you are messing with that stuff, you are probably ordering parts from one of the big online warehousers.

Another company that time passed by is Woolworth’s. Younger readers won’t even remember what that was, but, in 1979, Woolworth’s was at its zenith. It was a ‘five and dime’ store (although prices for goods had long since exceeded a nickel or a dime) where lots of reasonably well made goods could be purchased at low prices. It was also one of the places you could always find sewing supplies (Woolco thread). That business, of course, requires that people sew, as opposed to throwing away clothes that no longer fit or wear out. That doesn’t happen much anymore. As that shift happened, Woolworth’s had to compete on price with the likes of Walmart and couldn’t. Ultimately, Woolworth’s went out of business in 2009.

Perhaps the ultimate business that time passed by was the farrier business–yes, horseshoes. When we switched over to the automobile, the need for horseshoes plunged. Until that point, however, I’m sure a lot of people thought that being a farrier was a guaranteed trade.

While I think too many economic problems are shoehorned into ‘creative destruction’, it does happen sometimes.

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8 Responses to RadioShack, Woolworth’s, and Farriers

  1. L says:

    It’s somewhat ironic that at a time when interest in hobbyist electronics is experiencing a resurgence, as well as an increasing demand for prosumer equipment, that Radio Shack can’t find its niche. Plus a lot of Radio Shacks are mom and pop franchise stores in smaller communities which depend on them. You’d be amazed at the number of people who can’t change their own cell phone battery, much less know which one to buy.

    • Gingerbaker says:

      My thoughts as well. RS should have been all about arduino and 3-d printing; home automation and wireless integration; Linex and coding; renewable energy fabrication; electric paint….

      They should have been partners with tech web entities like Instructables and MAKE. Instead, you walk in and it looks like K-Mart. Not a soldering gun in sight.

      There are a lot of once-brilliant business plans (Kodak, anyone?) destroyed by the continued influence of Harvard business school MBA’s, who really should be quite ashamed of themselves.

      • Leo says:

        That would have been a really nice way to go. I worked at a Radio Shack all the way back in the mid-late 1980s, and while all our profit was in the stereos, computers, phones, and toys, even then it was the electronic components and batteries that paid the rent. Radio Shack made that Superbowl ad this year which made fun of its 1980s incarnation, but what if that’s what people really want? No, not the stereos but the electronic components, and arduinos and 3D printers, plus a reliable place to find the right battery or cable, with expert advice. I’d shop there.

  2. NewEnglandBob says:

    For each area that culture passes by, there can be a half a dozen new ventures that can take off. Why sew a whole in a polyester shirt when you can go to Walmart and buy a new one for $3.50.

    Granted, that most commodities have suffered a deterioration of quality, but this is due to everyone wanting cheaper goods. We are all at fault.

    Some things have actually had their quality increased. Automobiles and other vehicles, child car seats, some cookware, etc. Amazon can deliver most goods extremely efficiently. The explosion in information availability and transfer is remarkable.

    It is unfortunate that a lot of services deteriorated drastically, such as cable TV.

    • NewEnglandBob says:

      I forgot to mention the awful service at places like Dunkin’ Donuts and McDonald’s, where the people can’t even give you change back from a dollar.

    • Min says:

      “Granted, that most commodities have suffered a deterioration of quality, but this is due to everyone wanting cheaper goods. We are all at fault.”

      Why does everyone want cheaper goods? Because their wages have stagnated, despite impressive economic growth. And why is that?

  3. TheBrummell says:

    I find this attitude of everything-is-getting-worse very puzzling. Despite the griping and complaining (or, perhaps, because of it), overall quality of life improves. Yes, there are plenty of individuals experiencing a troubling decline, but the majority of people in the majority of places are having a better day today than they did yesterday. Home-built audio entertainment systems notwithstanding.

    Also, Woolworth’s is a major grocery retailer in Australia. Is that the same company, morphed and mutated in a different market?

    • Gingerbaker says:

      “but the majority of people in the majority of places are having a better day today than they did yesterday.”

      You live in a different world than me. In the U.S. I live in, almost everyone is doing worse than they used to, unless they are living above their means by going into enormous debt.

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