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Can LittleBits Save RadioShack?

Probably not.

Can LittleBits Save RadioShack?
[Photo: Flickr user Lisa George pour Ultra-lab]

RadioShack has had a rough year. In March it announced the closure of 1,110 stores. Six months later its brand-new CFO resigned. The electronics store is running out of cash and earlier this year hinted it could be forced to liquidate or seek bankruptcy protection if it didn’t turn things around soon, according to the Wall Street Journal.

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Faced with imminent death, RadioShack is going back to its roots, launching a last-ditch effort to appeal to its original customer base: makers.

LittleBits set up in RadioshackPhoto: courtesy of Radioshack

Starting this week, the gasping retailer will prominently display and sell LittleBits, the darling of the maker community, in 2,000 of its stores. “For us, they represent the origins of the maker movement, the DIY movement in electronics,” LittleBits CEO Ayah Bdeir told Fast Company. The original makers–hardware hobbyists who build their own gadgets–went to RadioShack to stock up on circuits, LED, batteries, and other necessary parts for DIY projects. Bdeir, for example, grew up tinkering with RadioShack kits that her dad used to bring back to Lebanon, where she grew up.

“Makers have long been a loyal customer for us–and for several years I think RadioShack moved away from one of their core competencies and core customers,” CEO Joe Magnacca told Fast Company. Indeed, the company now gets about half its revenue from cellphones, tablet, and related accessories sales, commodities available at lots of other places. “Our new leadership team is committed to embracing the parts of our heritage that allow us to differentiate RadioShack in a crowded market,” Magnacca said.

LittleBits fits into that “heritage” because as the company releases more sophisticated bits. people can make actual, useful objects. Today, LittleBits is launching a new product, the Smart Home Kit, which will retail at RadioShack for $249. The kit lets tinkerers turn regular household items into smart ones. Some potential projects include a monitor that beeps and sends a text alert when the fridge door has been left open, or something as simple as an app controlled lamp. “As opposed to purchasing things in the Internet of things space, why not allow people to invent whatever they want?” Bdeir says.

Selling LittleBits will attract a customer who might not think of RadioShack as a technology shop, Magnacca hopes. Although the gizmo depot is again selling something available elsewhere, namely on LittleBits website, part of RadioShack’s survival plan is developing services, such as in-store phone-repair operations, according to Businessweek. The what and the why of LittleBits takes some explaining. RadioShack’s dedicated retail areas have interactive demos so people can see how the magnetic electronic pieces snap together to make working electronics. RadioShack has also trained its associates for fluency in the product.

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In theory, the move makes sense. As evidenced by the company’s wildly popular Super Bowl ad, nostalgia is in. But RadioShack has leaned into this tactic for years, to no avail. The store has had ties to Make magazine since 2008, and in 2013 launched a co-branded partnership with Maker Faire. In an effort to attract DIY types, the store has also started carrying 3-D printers and Arduino at its stores.


Unfortunately, focusing on makers hasn’t worked yet. RadioShack has only seen sliding revenues since; it hasn’t posted a profit since 2011 and last quarter it announced $119.4 million in losses.

As for LittleBits, it doesn’t have much to lose with the partnership. It gets access to a wide audience that might not know the niche product, and a physical retail footprint.

About the author

Rebecca Greenfield is a former Fast Company staff writer. She was previously a staff writer at The Atlantic Wire, where she focused on technology news.

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