'Fashion makeovers': RadioShack revamps in push to woo women

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RadioShack plans to overhaul its image later this year with new ads and a fresh direction designed to expand its appeal to women and young people, according to people familiar with the plans.

The effort complements the already-in-progress "fashion make-overs" of RadioShack retail stores to create a younger and more female-friendly atmosphere. Its flagship headquarters store in Fort Worth, Texas, is emblematic of the new RadioShack: vivid colors, interchangeable displays, wider aisles, brighter lighting and more open space.

Instead of traditional counters with merchandise in glass cases, the redesigned store has floating islands that showcase products, such as mobile phones and digital cameras, that customers can pick up and examine without sales help. RadioShack has rolled out elements of the design in many of its 5,000 company-owned and almost 2,000 franchise-owned stores, with several hundred completely overhauled.

"There is the old adage that says your biggest strength is also your biggest weakness. But this is an opportunity to say `OK, so everyone's heard of RadioShack, but have you heard about the new RadioShack?"' said Kate Delhagen, VP, Forrester Research. "The new store format I've seen [in Fort Worth] is a very strong statement about being a 21st-century retailer."

Geoff Wissman, VP at consultancy Retail Forward, compared RadioShack's initiative to Lowe's in the home-improvement industry. The strategy is to try to distance itself from competitors by focusing on customer service and consumer friendliness, and by becoming more aware of women. "Consumer electronics are still pretty much sold by how many megapixels you've got, not how to make your life better," he said. "There is a void of that in the market that they could capitalize on."

A RadioShack spokeswoman declined to comment, saying it is too early to talk about fall marketing plans. She did confirm that its in-house ad agency, Circle R Group, is working on several new ads for fall launch, including at least one with new pitchman, former NFL quarterback Terry Bradshaw, who joins longtime spokesman Howie Long (AA, June 21).

RadioShack's traditional image has been the "go-to" store for TV, video, telephone and cable accessories, like cords and batteries, with those products as its bread and butter revenue. However, in 2003 wireless communications, which includes its partnerships with Sprint PCS and Verizon Wireless, accounted for 35% of sales, while power and technical sales accounted for a second-place 16%.

In RadioShack's second-quarter report released July 20, sales from wireless products jumped 16% over the previous year. RadioShack projects a growth rate of 5% to 8% in its wireless department through 2004. CEO Leonard Roberts has said it will expand its test of Sprint Wireless kiosks to continue fueling sales.

Some analysts are concerned about RadioShack's one-category dominance. Morningstar analyst Joseph Beaulieu wrote in a May report that "heavy dependence on wireless communications is another concern," when talking about the retailer's competition outside its core battery and accessory business.

focus on three areas

Still, it isn't likely RadioShack will forsake its heritage. President-Chief Operating Officer Dave Edmondson said recently in a published report that his company wants to be the "convenience store of the consumer-electronics industry," and will focus on three areas for the future: electronic parts, supplies and accessories; mobile phones and service contracts; and exclusive items like its ZipZap and XMODS remote control mini cars.

RadioShack spent more than $190 million on media in 2003. Aegis Group's Carat handles media buying. Its TV, print and radio advertising employ a myriad of celebrities including Mr. Long, Vanessa Williams, Ving Rhames, Bernie Mac, Daisy Fuentes and Paul Shaffer.

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