Tuesday, March 4, 2014

The Economy

The transformation from the old economy to the new is progressing unabated. Radio Shack (old economy retailer) has announced that it will close over 1000 stores this year. That's about 20% of all it's locations. Radio Shack has struggled for the last several years and looks to be losing the fight. What is killing Radio Shack (and many of the other old economy retailers)? Simple, it's the internet and data. Radio Shack is losing because of Amazon and Wal Mart (new economy retailers). Amazon has leveraged data and the internet to become one of the worlds largest retailers. They have figured out how to lower prices and still make some money (though not much). Wal Mart has figured out how to keep prices lower than anyone else and still make some money. Both have figured out that gaining market share is the key to survivability and hopefully better profits (but survivability is a good goal). Radio Shack has not figured out how to use the internet or data to transform their stores. As a result they are losing the fight and will soon cease being viable (like Borders and several other retailers). To survive the transformation we are living through you have to master the internet and data. You have to learn from Amazon and Wal Mart.

What do you think?