Electronics retailer Radio Shack is teaming up with hardware manufacturer and accelerator PCH International to bring 6 square-foot “Powered by PCH” retail spaces to stores in the United States. This area will feature hardware startups that work directly with PCH’s accelerator, PCH Access, to bring their products to retail after incubation.
The partnership will be called Radio Shack Labs and will reach stores by the end of the year. Makers can submit their products to Radio Shack Labs online.
“It’s going to have a huge impact in creating more hardware startups in the U.S.,” said PCH International CEO Liam Casey. “When people tell you that bricks and mortar is dead all you have to do is look at Apple retail sales.”
The largest risk hardware companies have taken, said Casey, are the financial and inventory requirements placed upon them by retailers. By shipping directly to stores and into this dedicated space, hardware makers will be able to get product in front of customers without major investment or consignment risk. While the Internet is now the de facto source for most electronics, many products benefit from bricks and mortar foot traffic.
What does this mean for hardware startups? Quite a bit, actually. One of the hardest things for most makers to do is get their products into retail. By landing in Radio Shack without the traditional risk and payment terms the companies can use PCH Access to bring their products into real stores.
“The good thing for Radio Shack is that it’s getting exciting products in the stores,” Casey said.
Radio Shack seems excited for the attention. “We didn’t really want an antiquated retail model so that people couldn’t move forward,” said CEO Joe Magnacca. “The big issue is the fact that the inventory investment and the terms retailers usually have aren’t favorable for the entrepreneur. It’s daunting and in many cases it’s not a model that they can enter into.”
By giving startups like LittleBits floor space, the company hopes to breathe new life into the stores and bring back the maker community that has recently shunned big box electronics stores for online retailers.
Analysts have been ringing a death knell for Radio Shack for the past few quarters, but Magnacca has begun investing heavily in updating and improving stores, as well as creating about 200 special stores featuring specific themes for makers, electronics fans, and mobile electronics shoppers. He hopes that these special PCH areas will further interest the maker set and encourage hardware entrepreneurs to start selling their wares at retail spaces.
“We’re providing expertise in terms of packaging and placement,” said Magnacca. “It’s an investment we’re making for the success of real world products.”
The “Powered by PCH” areas will roll out in the 2,000 current Radio Shack stores over the next few months.
“It’s a win-win-win,” said Magnacca. For small hardware makers, it seems like it just might be.