"We are hoping by the fourth quarter of this year, they'll be in the driver's seat," Joel Carter, the Fort Worth-based RadioShack's vice president of brand marketing, tells GSR. "Our long-term shoppers know us and know how we've evolved....But, there's a whole generation of shoppers who just don't get us."

One of Arnold Worldwide's biggest challenges is to find ways to appeal to Gen X and Gen Y shoppers, who have been buying competitive products in music and video retailers' stores. "They build a preference," Carter says, "and RadioShack isn't even on their radar."

In 1993, RadioShack hired the former Lord Group of New York City to assist an in-house agency that had been around since the 86-year-old company's early days. The "you've got questions, we've got answers" team soon become one as the Circle R Group, rising to an all-time high of 180 employees. Carter says the team this month was renamed to RadioShack Marketing in a shuffle that added 16 jobs yet created a net loss of 40 as the Fortune 500 corporation and its new pitchman dug into pigeonholing their roles.

"It's not your father's RadioShack" is catchy, but the slogan still doesn't capture enough younger consumers, according to Carter. "We need to let a broader audience know that we have the latest and greatest name-brand products," he says. "We have not done a good job of communicating that....We've been a utility brand. We aspire to be more top of mind when it comes to innovative products."

Carter emphasizes RadioShack historically is methodical and diligent about testing before undertaking any new approach. That cautious tact isn't likely to change, he says. "If Arnold is ready, this golden quarter will have a new and exciting message," he adds. "We'd like to be ready (for the fourth quarter), but we want to be sure we're ready."

Arnold Worldwide also has been tasked with deciding if celebrities like former NFL player Howie Long carry any weight with consumers. "We are redefining who our target audience is," Carter explains, citing inherent risks and rewards from buying a face and a name. "Arnold will help us through the question of whether celebrities make a difference or not."

With the Hispanic market so critical in today's retail world, RadioShack doesn't intend to abandon its specialty agency, Foote, Cone & Belding Worldwide of New York City, which has been helping for five years to spread the message to Hispanic consumers in the US, Puerto Rico and Mexico. Carter emphasizes the need for a unified message from both agency fronts plus developing a campaign that can play out even in Canada. "We expect it to be broad enough to be translated into different intents and different languages," he says.

RadioShack's real estate spans 5,047 corporate-owned stores, all leased sites, and 1,788 franchise stores in the US and Puerto Rico and another 125 stores in Mexico. Last week, RadioShack announced it's forming a Canadian subsidiary after claiming a legal win over Circuit City, which bought InterTAN Canada Ltd. and continued to use the RadioShack name on products in more than 1,000 locations in Canada. As would be expected, Circuit City is appealing the March ruling that requires it to give up the RadioShack brand by June 30--citing a licensing agreement with a 2009 termination date.

RadioShack execs view Canada as key to growth because the US is practically at a saturation point. With stores within a five-minute drive of 94% of Americans' residences or workplaces, the stateside growth has been coming from relocations, remodels and deals like store-in-store locations with Sam's Club and Sprint-branded kiosks in malls and lifestyle centers. RadioShack now leases space in 546 Sam's Clubs and has 53 Sprint-branded kiosks in operation. According to a recent conference call, RadioShack will jump the kiosk count to 200 by year's end and 500 by 2007.

"RadioShack does have growth options even though it isn't adding core stores," David Johnson, senior vice president and chief accounting officer, said during the Lehman Brothers 8th Annual Retail Seminar. But, he admitted, roughly 10% of the RadioShack Wireless locations will be cannibalized by the kiosk and Sam's Club plan.

The retailer's research shows an average 2,400-sf RadioShack store generates $342 per sf in sales. Sam's Club locations and Sprint kiosks, naturally smaller, are generating $3,050 per sf and $5,000 per sf, according to Johnson.

As for core stores, 500 will be upgraded this year to a sleek C3 format, according to Carter. The concept, tested in Tucson and Jacksonville, FL, puts registers in the middle of the retail space and many products previously kept behind the cash register are now out in the open with a modular look that encourages shoppers to browse shelves. Known for its inventory staples, RadioShack this year is adding more gifts, disc jockey and public address merchandise and karoake items.

Arnold Worldwide was up against three other agencies for the contract after gaining a berth with an unsolicited letter that caught RadioShack's corporate team's eye. "It was powerful enough for us to give them a visit," Carter says. "And they continued to be right on the mark with their recommendations. It's not just an advertising solution but an integrated revolution."