How Alignment Is Boosting RadioShack Sales

RadioShack plans to better integrate its web operations with its 5,000 corporate-owned stores, with the goal of adding more items per sales ticket.

The “ship-to-store” project, now piloting in 1,300 stores, requires both business- and IT-side leaders to work together in order to deliver information about orders made on the web site to the stores’ web order management tool, and ensure that processes introduced by the new capability would not disrupt the stores’ operations.

RadioShack relaunched its web site last year with an extended aisle enabled by a new hosting relationship with GSI Commerce, which provides logistics and fulfillment services along with e-commerce technology. Online, RadioShack now carries thousands of SKUs (Stock Keeping Units) that are not in its small-footprint stores, including flat panel LCD TVs, digital imaging products, portable music players and more.

Yet, “online retailers struggle with adding lines per ticket,” says Jimmy Mansker, vice president at Radioshack.com. So the retailer is leveraging its network of thousands of neighborhood stores and knowledgeable sales people to reach its goal of accessory attach rates on 30% to 40% of its online orders.

When consumers order online, an email notification will be sent to the store where the customer is picking up the item, alerting personnel about what has been ordered and what three add-on products go with it. If the item isn’t already in stock, it should arrive at that store within three days.

When it hits the store, the store associates receive it in the web-based management tool, which is the stores’ interface into incoming orders and how they should be closed out with the customer. At the same time, the customer gets an email that the item has arrived, along with the same accessory suggestions.

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“Face to face contact helps add lines per ticket,” says Mansker. When customers order a flat-screen TV online, for instance, odds are they want to talk to someone in person about what kind of cables will be needed to hook it up or make it HDTV-ready.

“We get some of these products we typically can’t carry in stores, because of their small footprint, into the hands of knowledgeable salespeople who can sell more product and make a bigger basket sale,” says Mansker — especially since those salespeople now have insight into the customers’ requirements before they ever set foot in the store.

Processes Inside Processes

Putting this all together involved collaboration among the dot-com side of the business, GSI, and internal IT staff. Beyond the mechanics of layering the web order management tool on top of the e-commerce system, was the question of how to build processes that fit inside the store processes, so as not to cause any customer issues at the retail site.

“Our IT department is very store-centric,” says Mansker, and its feedback was critical as RadioShack explored implementing this capability. Its expertise was necessary for issues such as how to deal with returning online items to the store site.

“IT came in and helped us to understand the returns process in the stores, how it will work with third-party products [the extended aisle items are fulfilled by GSI], how to give the customer credit, how it will have to be shipped back and build a process for that.” It’s still testing that process, which includes tracking an item via the web-ordering tool if a customer doesn’t have a receipt.

While RadioShack has seen same-store sales dip in its most recent second quarter, its vast network of retail sites may be a key advantage over Big Box competitors — even those that offer same day pick-up for items ordered online. RadioShack says the bigger issue for customers who want to order online is having somewhere safe and nearby to ship expensive items at no charge, which this new service enables. And if same-day pick-up is an issue, in many areas there are a handful of RadioShack stores within a five- or 10-minute drive of each other, and customers can go online to see if an item they want is in stock at any one of them.

RadioShack said it can’t share information about who gets credit for sales of items ordered online and shipped to stores, as it involves internal compensation issues. It plans to roll the ship-to-store offering out to its 3,700 other corporate stores in the U.S. by mid-Q1.