Ted Rips Packet 8
2006 What Will It Be Like

Radio Shack: A Not So BrightPoint For Skype

I often tell clients that it's not about "selling in," it's about "selling through" that matters in retail product marketing. Too often we hear about the "big announcement" from a company in the technology products space that tells us all that they landed a "retail partnership" with so and so. That's why when I spotted Phil Wolff's post about Radio Shack and Skype I had to laugh, not at the post, but in full agreement. Phil is dead on with his assessment.

Here's why.

With Radio Shack you have the ultimate geek product retailer with thousands of locations around the world. Radio Shack is a chain that has been better at selling batteries, voltage detectors, plugs, switches and yes, cell phones than all others on the planet and they got married up with the fastest growing online service ever. Skype.

What could be better. I mean all those free users who want extra add-on accessories for early adoptive geeks. Heck, Radio Shack has been selling to that crowd for years. It's called the aftermarket and in many ways the products Radio Shack sells are either their own or name brands that people can trust to fuel that sector. Radio Shack also sells a lot of off beat, arcane items that has made them the geek and toy idiot type's favorite place to always look for what they know is out there, but was never easy to find. So one would think that given all that Radio Shack is, that they would be the ideal location for Skype add ons. Right? Except there's a problem and it isn't Radio Shack's fault. It's Skype. 

You see if you're going to come out big with announcements, drive retail placements and generate buzz around all these licensed products, then you better have real retail promotion programs in place to make it happen, not just rely on PR and the blogosphere to make people know the products are there.

And in fairness to Skype, they're not the only ones who suffer from this. Most technology product companies do, but when you move into licensing of your trademark, you better damn be sure that you've got the chops to back up what you're doing, and the best way to do that is to lead with the checkbook, and since it's the licensees money (OPM) that makes it work anyway the cost to doing things the right way can be a real win on the P/L. Factor in some start up costs, hire a few bodies to run the programs, one on the licensee side, another on the retail promotion side, a third to keep everything on track, execute a few things well, run a few new programs a year and watch things take off and grow...Just look at the NFL, the WWF, MLB, NaASCAR and so forth. They all started that way, and well, licensing fuels thaose businesses even more than the butts in the seats.

Back in my days of sports marketing, and the sports licensed products world, having come from the team side of the business one of my roles was to question the licensors motives and scruitinize what was really going on. While I questioned a lot, one thing I quickly learned that when the NBA, NFL or MLB worked a retail promotion for all their licensees, they really went out and worked it.

The NFL was the very best at that, and still are. The NBA may be slicker, but no one moved product like the NFL for their licensees. They did it the old fashion way. They sold in. Promoted big and made sure everyone in the store knew not only where the product was, but what was there too. They educated sales clerks. Gave them hats, golf shirts. They branded the idea of "official NFL" product sections and raided illegal counterfeit outposts, with the press and police in tow.

At retail the sports leagues all leveraged every inch of space they could get their products onto. 4 foot branded sections. End caps. In aisle display. Hang tags. Shelf talkers. Window posters. Those tactics all built awareness for the licensed products and drove revnue for both the leagues and the product companies. Oh and yes, they would also employ a field sales force that would go out and merchandise the sections to the planagram, making sure the products were cut in the way the layout showed, and more importantly were even in the stores and on the shelves not sitting in the back room somewhere for a stock person to sit on. The field force folks also made sure the dump bins were full, that the promotional offers, contest entry forms and other awareness building tools were up and visible. Oh yes. The leagues did something more. They advertised, buying four color ads in local newspapers and sometimes branded circulars in the Sunday supplements. And all that is what's lacking here at Radio Shack.

You see for some of these licensees, Skype is their run at the big time. But without sell through programs, the great sell in accomplishments ( nodoubt conceived and executed by some of the recently departed Skype executives, that the eBay team has now inherited) will  likely be more like Sell In, Sell None, Got Sold Out by Skype for many of these product companies who all are jumping on the Skype Hype.

Next week during CES I expect Skype to be out in force with a bevy of announcements in many different directions.

Hopefully the more sober eBay leadership will tone things down and let the company's efforts over the past year mature, so their actions and results speak louder than their words.

It's now time for eBay/Skype has to begin making what they already have in place better and to capitalize on their investment, not just let it spin like a top. If they do that, to quote a client of mine who has been in the past a top sales gun for DEC, COMPAQ and then his own ERP firm, "the Bigger Will Come."


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