COMMENTARY
12:39 pm
Thu April 10, 2014

When Innovation Ends, Brands End

A Radio Shack retail location.
Credit CoolCaesar / WikiMedia Commons

At its peak, Radio Shack was at the forefront of innovation; however, in the past two decades, stores have closed and sales have declined sharply. When innovation ends, brands end as well.


If you want a prime example of the importance of business innovation, just mention Radio Shack.

A retail version of Kodak, Radio Shack exemplifies how businesses grow through innovation, and die from a lack of it. Radio Shack opened in 1921. The first retail store for ham radio buffs in Boston.

They took advantage of surplus equipment from World War One, introducing a mail-order catalog for radio equipment. The brand name was chosen because radio shack is what they called the room that housed radio equipment on ships.

Radio Shack was the innovator in hi-fi music equipment. In 1947 it opened the first audio showroom, a virtual supermarket, for music equipment.

In 1977, Radio Shack introduced at retail the first mass-produced personal computer, selling over 200,000. Radio Shack dominated the CB Radio craze.

The company peaked at 7,300 stores and almost $5 billion sales. After current closings, there will be 4,000 stores and $3.5 billion in sales.

As in the case of Blockbuster, nobody knows the number, but Radio Shack’s years definitely are numbered: too many stores, too many wrong locations. Maybe nothing could have protected it from Amazon.

But no innovation in forty years and an out-of-date brand didn’t help. 

To reach Mr. Malmo, hear and read more of his commentaries, or to ask him your own marketing question, go to http://askmalmo.com.