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.