Radio Shack has been a powerhouse in their sale of electronics and electronic goods. They have been able to be so successful because of the aid they have received from companies such as Sam's Club who have allowed them to set up numerous kiosks throughout stores across America, and sell their merchandise. The convenience of having those kiosks located in the Sam's Club drove sells out of the water. However in recent news, Radio Shack reported that the contract with Sam's Club has been terminated. The profit that Radio Shack once saw from the sale of those products is predicted to decline any where from 10-15 million dollars this year.
How does Radio Shack plan to deal with this declination? They didn't waste time sulking about their losses. Instead, they have already jumped the gun and began the process of teaming up with another retail giant, the Target Corporation. As reported in August of last year, Radio Shack had 850 mobile kiosks up and running, already twice as much that existed in Sam's. The amount of customers and the demographics of Target appeal greatly to the reasoning behind the contract agreement. A Target customer is more likely to purchase Radio Shack electronics than a Sam's customer is. Radio Shack figures that if the majority of people shopping in a Target store are more likely to stop and spend some money at an electronic kiosk, the future revenue will have double the revenue that they lost in the contract termination.
T-Mobile, Sprint, and AT&T are the only wireless companies that Radio Shack carries. This could potentially be a problem because of the increased popularity in the iPhone and Verizon's new deal of selling them could destroy AT&T's selling of the iPhone. It would be smart of Radio Shack to conjure up a plan in order to get Verizon on their side. While it may seem as if they have everything figured out, they are still suffering a decline in sales of accessories, modern home and personal electronics. They plan to solve this dilemma by "selling the entire solution", says CFO of Radio Shack Jim Gooch. Their motive is to up sell so that when a consumer comes to their kiosk only wanting to buy a phone, they will also leave with a matching hands free bluetooth, phone case, and car charger to complete the package ultimately receiving more revenue means more money. Wireless sales account for 2/3 or revenue for Radio Shack and they have already seen a 15 percent increase in net income since the switch. Things are looking up for Radio Shack.