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09/07/2010

Renovation Exchanged For Exclusivity & Advertising

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he had to get what he wanted.� He determined that Radio Shack�s greatest asset was its 7,000 stores � even if some were outdated.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!



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