Figuring out Radio Shack's retail strategy..

A while ago, satirical website The Onion published an fake article entitled Even CEO can't figure out how Radio Shack still in business.

They have a ton of locations, but they usually seem empty, and their employees haven't struck me as terribly knowledgeable, especially the one a few years ago who, when I tried to find a usb hard drive that was on clearance, handed me a usb pci card and saked me if that was what I was looking for - leading me to think their motto should be "You've got questions? So do we!".

I ventured out today - my first time driving since I crashed a few days ago - to a Radio Shack near my parent's house. Since I'm going to be driving my dad's minivan for the next week or two while my truck is geting fixed, I wanted to get one of those cassette to 1/8" audio adapters for my iPod - the van lacks a cd player or aux input, and since I live in a radio-heavy city, FM transmitters don't work well. I had one in my truck, but I didn't feel like going back to the body shop to get it.

When I got to the shack, I was rather surprised to find a line at the checkout - I don't think I've ever seen more than 1 person waiting to checkout at a Radio Shack. I was also surpised at the price - $21.99. I knew it was probably considerably cheaper online, but I needed it now, so I bought it. And I was right that it would have been cheaper online- I could have gotten it for $2.40 shipped off eBay - from Hong Kong.

Which suggests that the profit margin on stuff from Radio Shack is freakin' ginormous - probably several thousand percent. Of course, their overhead is also way higher than eBay sellers - rent for stores in high-traffic locations, staff, inventory. But I guess there are enough people who need something now to make them profitable. Sure, you can get it cheaper somewhere else, but when you need an odd part in a hurry, you know you'll find it at Radio Shack, and that there is probably one very nearby.

My friend bsom has offered an alternative theory - old people - that I think is also part of it. Old people feel comfortable at the Radio Shack, because they are small and not as overwhelming as a Best Buy or Circuit City, and they are often close by in their neighborhood instead of far away like big box stores.