RadioShack would like you to call it 'The Shack'

ByTheresa Howard, USA TODAY
August 05, 2009, 10:38 PM

NEW YORK -- RadioShackrsh is the latest older, "legacy" brand to try to put a cool, hip spin on itself.

The 88-year-old electronics outfit will re-introduce itself Thursday as just "The Shack" — at least in its ads.

The retail chain is spending a big chunk of its $200 million ad budget for this year on new TV and digital ads to introduce The Shack as its name for advertising and marketing purposes. Signs outside of stores will remain RadioShack. The company hopes to hold onto to its brand heritage and attract more tech-savvy shoppers.

The ads will focus on the company's knowledgeable sales staff and wireless products, which accounted for 33% of $4.2 billion in sales last year. They'll also promote the average 2,500-square-foot size of a RadioShack store as more easy to navigate than big-box rivals such as Best Buy.

As part of its new branding, the chain recently expanded its own proprietary brands and added national brands such as T-Mobile. It's also signed a marketing agreement with bicyclist Lance Armstrong, who next year will compete in the Tour de France and other races under Team RadioShack. "We have an iconic American legacy brand," says Lee Applbaum, chief marketing officer at RadioShack. "This is a way to ensure that customers understand our innovation in products with a focus on mobility, leading brands and knowledgeable associates."

Despite competition from Best Buy bby and Wal-Martwmt, RadioShack has survived with the more mundane products of the technology world, including batteries and cables. Same-store sales (sales of stores open for a year, the best measure of retail health) slid 4% in the second quarter ended Jun 30.

Analysts say that a brand overhaul requires lots of time and capital — and consumer acceptance.

Sales of sports drink Gatorade have suffered since changing its name to "G" in January. After a test earlier this year to change its name to The Hut, Pizza Hut is sticking with its original.

There's also risk involved, especially as the company markets itself as The Shack but operates its 4,450 U.S. retail outlets as RadioShack. The company's logo also will go unchanged.

Martin Bishop, director of brand strategy for the San Francisco office of design and branding firm Landor Associates, says there's a logic to what RadioShack is doing. " 'Radio' sounds old-fashioned, and they want to sound cutting edge," he says.

But Bishop warns of possible trouble. When Federal Express changed its name to FedEx, he says, "FedEx had no other meaning than Federal Express. With The Shack, there is a contrived familiarity that I'm not sure is helpful."

Expert Richard Bates agrees. "Giving a nickname for a brand, it's a tricky thing," says the chief creative officer at The Brand Union. "If a client does it or a consumer does, it's a way to claim ownership. If you impose it ... there's a little bit of danger."

Applbaum, who joined RadioShack 10 months ago to handle the makeover, says that the differing names won't cause confusion. The marketing "allows us to tell a simple and powerful message that's easy for consumers to digest," he says.

Applbaum is hoping that Thursday's big national kickoff in New York and San Francisco will help generate buzz for the brand. People in those cities will be able to communicate in real time on 17-foot wireless laptops with webcams and giant keyboards through Saturday. People can also log in to the event via

The giant laptops "underscore the way that The Shack keeps people connected in a highly mobile world," he says.

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