The Target partnership helps correct last year's unsuccessful "The Shack" rebranding campaign. The longtime hotspot for hardcore techies looking for, say, a walkie talkie or a transistor, RadioShack has been hamstrung by its nerdy image. Simultaneously, Best Buy (BBY), the late Circuit City and, well, Target have expanded into tech goods enough so that RadioShack isn't really necessary. "The Shack" rebranding was an attempt to reset RadioShack as a hip, cool place -- something, frankly, it will never be. To quote my BNet colleague Steve Tobak on the Shack, "...[N]ow it's a bit player with tiny stores that sells everything to everybody in an age of global super-brands, huge retail chains, and a zillion ultra-low-margin Internet resellers."
Also, the Target partnership aims for the one area of serious growth for RadioShack: Mobile phones. As I wrote earlier this year, RadioShack is seeing increasing profit from cell phones and related goods, but the competition from Best Buy and other stores was too dense for it to depend on it in the long term without some type of exclusive partnership either from the carriers, the manufacturers or, in this case, another store. Like Wal-Mart (WMT), Target has become a major hub for mobile purchases. RadioShack is wise to get in on the action, as "The Shack" still isn't the first place customers will think of when buying mobile product.
The Target partnership takes RadioShack's eggs all out of one tiny basket and spreads them to business that are actually on the rise. RadioShack is humble enough to know when it needs help - and it will pay off.
Photo courtesy of Brave New Films