When business was lagging, Radio Shack got down to the basics and
used barter for its surprising turnaround. A decade ago, the
electronics retailer with 7,000 locations, tapped the former
chairman and chief executive at the Shoney’s restaurant chain to be
its president. He led a new focus on retailing.
Leonard Roberts did what every smart business-owner does, he focused
on “using what he had to get what he wanted.” He determined that
Radio Shack’s greatest asset was its 7,000 stores — even if some
were outdated. With a visionary insight Roberts decided to refurbish
the stores, having suppliers pay for it in exchange for exclusivity
within those stores.
The three suppliers he worked with were Sprint, Compaq Computer, and
Northpoint Communications Group:
·
When Sprint Corporation was looking for a retail base from which to
sell its new wireless phone network, Radio Shack and Roberts offered
to make Sprint its exclusive national wireless provider for ten
years. In exchange Sprint would provide tens-of-millions of dollars
in new store fixtures and advertising support, plus about 5% of the
revenue generated by their shared customers.
·
Radio Shack cut a similar distribution deal with Compaq Computer.
Compaq would refurbish a portion of Radio Shacks’ stores,
controlling the look and merchandising of the space, plus share some
of its service revenue with Radio Shack.
·
Likewise, Radio Shack struck a deal with broadband internet service
provider Northpoint Communications Group in which Radio Shack stores
sell high-speed web-access contracts.
Have you recently asked yourself how you could use what you have, to
get what you want? Once you determine that, the next step is to take
action. Go out and structure a winning barter agreement!
