The Source stores fighting ‘zombie retailer’ apocalypse
New esthetic and modern flair govern company’s survival plan — and it could be working
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 the ease of online shopping.
The company formerly known as Radio Shack is in the midst of overhauling its stores, doing away with walls of boxed products in favour of a new esthetic with amore modern flair — bright lights, wider aisles and even wood accents.
It is setting up interactive displays to allow customers to connect their smartphones to headphones and speakers so they can test the sound with music they enjoy, 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.
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 seen a wave of store closures in Canada in recent years. The Source has been among those, closing about 200 locations since it was acquired by BCE Inc. in 2009. Competitors such as Sony and Best Buy have also shrunk or shut their doors altogether.
Brown, who has headed the Source since 2011, said it became clear it needed to invest in 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 of- fers a smaller selection of products in its stores. But Brown said that is an advantage over its bigger competitors that can overwhelm customers with their offerings.
The Source, a private company headquartered in Barrie, doesn’t release its earnings publicly. But Brown said the transformation is paying off, with same-store sales at renovated locations (those open for at least a year) 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 parttime employees as of two years ago in addition to its full-time staff.
Last year, about 30,000 people submitted applications for retail jobs in the stores, Brown said.
“Three years ago? We would have been lucky to have a tenth of that.”