Report: Amazon to Buy Some of Radio Shack’s Stores for Offline Retail

Amazon logo

It appears that Radio Shack is going out of business. Sprint is reportedly buying some of its stores; but more interestingly, according to Bloomberg, Amazon is thinking about buying some of the Radio Shack outlets as well:

Amazon.com Inc., aiming to bolster its brick-and-mortar operations, has discussed acquiring some RadioShack Corp. locations after the electronics chain files for bankruptcy, two people with knowledge of the matter said.

Amazon has considered using the RadioShack stores as showcases for the Seattle-based company’s hardware, as well as potential pickup and drop-off centers for online customers, said one of the people, who asked not to be named because the deliberations are private.

Amazon has operated temporary “pop-up stores” in the past. There was also a report last year that Amazon would be opening a New York retail store, which didn’t happen. Whether the initial report was wrong or the company decided against it in the end is unclear.

Amazon has for a long time been pushing into the “real world” with its lockers, Fresh grocery delivery service and other efforts to close the gap between e-commerce and traditional retail. Opening physical retail stores would likely help the company in multiple ways and further strengthen the Amazon brand, which is already dominant in e-commerce.

Financial analysts would undoubtedly express concern over costs and overhead and their impact on margins. But in the long run the benefits to Amazon would likely outweigh those costs.

Amazon stores could showcase the company’s products and branded hardware, serve as return or pick-up centers and places to see and order select products. Indeed Amazon might be able to create an innovative in-store online-offline experience that showcased the future of retail.

It remains to be seen. Just as the New York store didn’t happen, it’s also possible (likely) the Radio Shack deal will fall through. If it does Google should swoop down and buy those stores. I’ve argued for a number of years that Google would benefit from physical stores for many reasons.

The company could sell hardware, swag, showcase new products and technology and offer help and support to SMBs (Google My Business, AdWords). In fact, it would be even more interesting, than Amazon, if Google would up buying those stores.

Update: Amazon opened its first offline retail location at Purdue University.

Amazon store

You can follow any responses to this entry through the comments feed.

8 Responses to “Report: Amazon to Buy Some of Radio Shack’s Stores for Offline Retail”

  1. Dave Oremland says at

    That is such an interesting and sort of strange development with web businesses possibly buying up Radio Shack stores.

    That Radio Shack has rapidly declined to this state is one set of circumstances.  These days they still remain a carrier of obscure electronic equipment that people can use…but in general they are not a player in the larger retail environment.

    That various other web businesses would value their stores is quite interesting and will be something to follow over time.   In general these are smaller stores and not always in the greatest of locations in a market, though they are everywhere and reasonably accessible if not at the most visible and central locations.

    There are a lot of those stores out there.  They are the right size for a lot of sellers of mobile devices…and generally on the smaller size (compared to something like Apple stores or Microsoft stores.   

    I wonder how it will play out.

  2. Greg Sterling says at

    Good point about the size and location of stores. That would deter someone like Google, which would want to offer something comparable to Apple or MSFT. Regardless, the benefits of opening physical stores for Google remain in my mind.

  3. Dave Oremland says at

    well this was fast:  bankruptcy announced today:  http://www.streetinsider.com/Corporate+News/RadioShack+(RSH)+Files+for+Bankruptcy+Protection%3B+Reaches+Agreement+with+Standard+General+(S)/10235330.html

    Standard General, an investment firm and evidently RS’s largest shareholder is taking over the stores and flipping/moving a large number to Sprint.

    Now the question is….what happens with the other 2,000+ stores…if anything?

  4. Greg Sterling says at

    Doesn’t look like Amazon will be buying . . . probably.

  5. Dave Oremland says at

    Besides the propreties’s Sprint is claiming there are 2,000 or so more stores.  Who knows how many will be obtained by other groups if at all.  Possibly different groups are vying for some of the same stores right now.  Possibly others have no current interest from existing groups.  

    We’ll see how it plays out.    My general impression of Radio Shack stores are that they are on the smaller side (relative to Apple type stores) and both ubiquitous and accessible in many markets, yet in many cases not in the highest profile locations.  We’ll see.   I’m not sure, but I don’t think Standard General is a huge group with a lot of people.  I know that trying to dispose of this many properties takes a lot of time and effort…especially if there are a lot of players, and/or possible players that might have interest, but need a lot of information and time to make good decisions.

    One year ago RS spent a lot of $$ on a SuperBowl ad and was making an effort to re position and survive.  Didn’t work and things continued to go down hill fast.

  6. Greg Sterling says at

    One could see Radio Shack’s bankruptcy coming from a long way away. Clearly in their case the Superbowl ad did nothing for them but the product was broken to begin with.

  7. Dave Oremland says at

    I’m sure you are right about that, Greg.  RS has been going downhill for quite some time.

    Meanwhile opening campus stores, such as what Amazon did, and seems to be repeating, is very very different from a general retail location in oh so many ways.   Regardless it gives them an opportunity to operate in a retail format, test things, and develop processes, services, etc.   I think its a clever way to test retail formats.

  8. Greg Sterling says at

    Agree that it’s a good “toe-in-the-water” approach.

  9. Amazon Opening Physical Bookstore In Seattle, Google Abandons Store In NYC | Internet Marketing says at

    […] There were previous rumors that Amazon was going to open a New York retail space or was going to buy part of the bankrupt Radio Shack chain, neither of which came to […]

Leave a Reply