It's no secret that RadioShack's
Say you wander into RadioShack looking for a nifty BlackBerry from Research In Motion
Although strong sales of wireless equipment helped RadioShack enjoy quite a good run for a while, recent quarters haven't been so kind. If you look at RadioShack's second quarter, you'll see that the company blamed a steep drop in profits partly on a downturn in wireless sales -- a downturn that has continued for several months now. Even while RadioShack sales were still sizzling in 2004, many Fools were more than a little bit concerned about the retailer's emphasis on wireless products. (Here's a flashback to the situation in late 2004.)
So today's announcement makes sense, right? For RadioShack, it's better to have customers ordering products online than defecting to Best Buy
In addition, many cell carriers are increasingly selling their wares directly to consumers, eroding RadioShack's sales. Although the retailer recently extended its deal to sell SprintNextel and Cingular phones, it will no longer provide Verizon
While I can see RadioShack's logic in finding a way to offer as many phones and services as it possibly can, I can't help but think that the idea of shopping online while in a store seems a bit odd. If people go to a bricks-and-mortar store in the first place, aren't they looking for instant gratification? If you're going to shop online, then why go to the store at all?
The announcement, though innovative, emphasizes the challenges that RadioShack continues to face. Although the company trades at a mere 12 times forward earnings at the moment, investors will likely need a lot more proof that it can rejuvenate its sales in the wireless arena and beyond.
Alyce Lomax does not own shares of any of the companies mentioned.
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