National Post (National Edition)
The Source looks to avoid fate of ‘walking dead’
Small stores as electronics playgrounds
TORONTO • The Source is staging a transformation to turn its stores into electronics playgrounds in an effort to boost sales as the consumer technology industry faces pressure on multiple fronts, including big-box retailers and online shopping.
The firm, formerly Radio Shack, is overhauling its stores, doing away with walls of boxed products in favour of a new esthetic with a more modern flair — bright lights, wider aisles, even wood accents. It is setting up interactive displays to allow customers to connect their smartphones into headphones and speakers so they can test the sound with music they enjoy rather than a store-selected soundtrack, said Charles Brown, president of The Source.
The first revamped store opened in the Yorkdale Shopping Centre in Toronto in 2015. The Source is aiming to complete the renovations at more than half of its 550 locations by the end of the year.
The reality, Brown said, is that the Source needs to adapt to a world where consumer electronics are no longer found exclusively at specialty outlets — they can be bought at convenience stores, gas stations and other retail pit stops, not to mention online.
“Retail now, there’s just so much disruption,” Brown said in an interview.
Revenue in the Canadian consumer electronics industry has declined over the past five years at an annualized rate of 1.2 per cent, according to estimates by IBISWorld. The market-research firm projects revenue will continue to fall between 2017 and 2022 at an annualized rate of 0.8 per cent. The drop comes as people increasingly purchase electronics from Amazon, eBay and mass merchants like Costco, according to a recent report by the firm.
Electronics retailers have been part of a wave of store closures in recent years. The Source has been among those swept up, closing about 200 locations since it was acquired by BCE Inc. in 2009.
Brown, head of The Source since 2011, said it became clear it needed to change to remain competitive. “Standing still means you’re just going to be another zombie retailer,” Brown said. “You’re just walking dead ... and it’s just a matter of when your clock’s going to run out.”
Under the changes, The Source offers a smaller selection in its stores. But Brown said that is an advantage over its bigger competitors that can overwhelm customers with their offerings.
Brown said the transformation is paying off, with samestore sales at renovated locations having risen between 10 and 30 per cent.
He said the company has also invested more in its staff, doubling annual training hours from 40 to 80, to improve customer service. It also began providing benefits to its part-time employees as of two years ago in addition to its full-time staff.
Last year, about 30,000 people submitted applications for jobs in the stores, Brown said. “Three years ago? We would have been lucky to have a tenth of that.”