When was the last time you bought something from Radio Shack?
If you're anywhere near my age (38), chances are you have spent hundreds or thousands of dollars there in your lifetime.
But it's been .... awhile. A long while.
in 2015 Radioshack filed for bankruptcy. With Amazon and other E-Commerce retailers easily replacing the experience with a more convenient, cheaper online experience for people.
If you needed an extra HDMI cord, speaker wire, or an AC adaptor for a fledgling electronic unit, you had other, better, cheaper, options with the rise of online retail. Radio Shack never stood a chance.
On November 19, Radioshack was bought by a company you haver never heard of called Retail Ecommerce Ventures (REV), headed up by Alex Mehr and Tai Lopez. Their plan? Ascend Radio Shack from the ashes of in-person retail to e-commerce dominance.
REV has the same plan for other recent acquisitions like Pier 1, Dressbarn, and Modell's. And most recently, Stein Mart.
Do you see a pattern here?
Who Are These Guys?
Tai Lopez and Alex Mehr are no strangers to online entrepreneurs.
Those of us who have been in the world for awhile know all too well Lopez's infamous poses in front of his fancy sports cars and millionaire mansions.
Lopez built his wealth building social media marketing and info product businesses online and has run tons of training programs and masterminds teaching people to do the same. Everyone in the entrepreneurial space has seen his Facebook ads, touring his massive estate, palm trees all around - making promises of how you too can get rich on the internet.
Alex Mehr is the co-founder of successful dating app, Zoosk, which was bought by Spark Networks in 2019 for $258 million.
What's So Brilliant About This?
Brand awareness has always been a highly coveted trait for businesses, with trillions of dollars in television ad spending to back it up.
But in the world of e-commerce and online sales it is largely undervalued.
As the documentary, The Social Dilemma, so intelligently noted - marketers are now selling guaranteed sales performance just based on the power of the algorithm, and businesses have come to expect that in kind (this is a mirage, by the way).
Since the general discourse around social media advertising is that anyone can plug into it, no matter how big or small they are, brand awareness has fallen way to the bottom of the value totem pole.
But this is, again, a mirage.
Brand awareness is absolutely crucial to long and even short term financial success. Even if you make a million dollars this year selling stuff through Facebook ads because you caught a lucky pocket - if you have no brand awareness outside those direct, impersonal sales - you're dead in the water.
What's fascinating about this, is this guy, Tai Lopez, who is famous for the "anyone can get rich on the internet" mentality - knows seemingly better than anyone, the power of brand.
By buying up brands like Pier 1 and Radio Shack, there is inherent trust in these brands.
We're surrounded by fake knockoffs of products and a race to the bottom in price and quality. As consumers we know that, and the bar has now been raised for what we will buy online, and what we'll discard as "cheap crap."
Lopez and Mehr know this.
And by buying these brands and relaunching them online, they are going to have the luxury of skipping over some of the most difficult psychological hurdles new businesses have online.
The brand awareness and brand trust is already through the roof. With all else being equal, who are you going to feel most comfortable buying from online? Radio Shack, or a company you have never heard of?
This also means (such is the power of brand), that RadioShack can charge more for their products, because price is a story. And we associate that increase in cost with an increase in value. We're willing to make a marginally greater sacrifice to have a higher quality product.
And this is all just marketing.
Even if no-name company X has a product that is just as good, Radio Shack can still charge more because of the brand recognition they have. It's a safer choice. And the price of the product confirms that value.
What Can We Learn From This?
It's time to stop trying to get rich quick and start trying to get rich smart.
Every e-commerce company, when sitting down to make their budgets for the next year, should build brand awareness into that budget.
If you only spend your money on direct sales, it's like driving a car across the country on a quarter tank of gas. It's going to keep running out and you have to constantly refuel. And you never know how much that gas is going to go up in price along the way.
But investing in, and then ultimately achieving a high level of brand awareness - that's like traversing across the country in a private jet.
If you want to learn more about working with me and my agency, Guide Social, click here and get in touch.