Radioshack Downgrade Evidence of a Dying Breed

18 Mar

Radioshack was recently downgraded by Moody’s Investors Service, run by CEO Raymond McDaniel. Its new rating is a Caa1, and the outlook is negative. But though it’s sad, it’s not altogether surprising. Electronics stores have long been on the road to ruin, with sales falling on average by 2.6% every year for the last five years.


Electronics stores seem to be a dying breed, and although stores like Best Buy say they can get back on track, it’s hard to see how. People no longer go to the store to purchase electronics, it seems. They go online, where sales have increased by nearly 15% each year for the last five years. Even CDs, DVDs and TVs are no longer promising—prices are dropping on TVs as they are replaced by computers, and people don’t buy nearly as many physical copies of music and movies as they used to.


We’ve entered the digital age, and electronics stores simply can’t keep up with the convenience of buying products on websites like Amazon for less money and hassle. Radioshack and Best Buy are not the first to fall, either. Circuit City and CompUSA, once giants in the market, have both failed under pressure. To survive, big changes need to be made to make customers’ experiences unique and appealing. The old model just won’t work anymore.


Abt Electronics is one of those stores that might just survive. Their showroom in Glenview, IL, is a whopping 350,000 square feet and includes plenty of interactive experiences for children and adults. There are giant bubbles, flight simulators, video games, live exotic fish, and even fresh-baked cookies and coffee on the weekends.


Abt also focuses on customer service, paying employees salaries and bonuses for taking good care of customers. They can even offer discounts on the spot, without asking for permission first. And unlike Best Buy and Radioshack, their sales are up.




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