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Exposing the Retail Experience: “Mystery shopper” surveys assess retailers’ approach to recommending and promoting handset models and brands

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Market Study
Published: May 2013
Pages: For full details, please email deborahf@cmsinfo.com
Research from: Ovum (was Informa Telecoms and Media)
Sector: Handsets & Devices

From: GBP 995.00
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The report provides research and analysis from a series of in-store “mystery shopper” visits from a variety of locations worldwide, with a focus on smartphone positioning, the ability of the sales assistants to promote and sell devices, and strategies for selling tablets.
Simply having a great product is not enough for vendors to succeed. To truly stand out, it is critical that vendors ensure the right point-of-sale experience is provided in order to persuade the consumer to buy their product.
Julian Jest, Research Analyst, Handsets & Devices, Informa Telecoms & Media

    In-depth data and observations were collected by a “mystery shopper”, under the guise of a typical customer, from a variety of retail channels in a number of countries worldwide. The results are presented in this report.

    The visits took place in various locations around the world, including the UK, Vietnam, Indonesia, and Arizona and California in the US, between June 2012 and March 2013. Stores visited included mobile-operator stores, dedicated electronics stores, general stores and department stores.

    Specific outcomes and metrics were collected including smartphone models recommended by sales assistants, vendor brands with their own table-top displays, in-store standalone displays or posters for device models, the number of tablets on display, the ratio of tablets to store size (by square feet) and the business strategy used by retailers to sell tablets. The ability of individual sales assistants in each store to promote device features was also assessed, with particular focus on their technical knowledge and capacity to match features to the needs of the customer.

    Reviews of own-brand stores including Microsoft, Apple and Android are also covered, comparing and contrasting the in-store strategy to understand where the priorities of each business lies.

Case studies include:

  • Erafone Android store
  • Apple store
  • Microsoft store

Cities/regions covered:

  • Hanoi, Vietnam
  • Jakarta, Indonesia
  • London, UK
  • Phoenix, AZ, US
  • San Francisco, CA, US
  • Silicon Valley, CA, US

How will this research help you:

  • Understand how handsets from various vendors are positioned by sales assistants
  • A snapshot view of the relative in-store advertising, marketing and positioning between specific handset models and OS platforms
  • Learn how sales strategies differ depending on store type
  • Get an overview of the support retail channels receive from vendors for in-store promotion
  • Find out the ability and knowledge of sales assistants from different store types to explain and describe the benefits of various devices and operating systems

Microsoft is a long way from rivaling Apple’s network of retail stores
Microsoft is some way from Apple’s 250 stores in the US, even with plans to increase its store
count from 20 to 52 by year-end (see fig. 2). However, generating revenue is only part of the
benefit to be gained by Microsoft from expanding its retail operations. Microsoft appears
to be using the retail stores as part of its marketing strategy to change how it is viewed
by consumers. With its range of desktop computers, gaming console (Xbox) and accessories,
smartphones, tablets and ultrabooks, Microsoft is making a strong case with consumers that
it has everything they need for the office, home entertainment and on-the-go under one roof,
running on software from one company.

The software giant has been accused of providing a limited customer-service experience for
its products. By establishing a chain of retail stores, Microsoft aims to address this problem
and offer support to anyone who has a device with a Microsoft operating system. The affected
customer can bring it into the store and receive help, whether the device was bought directly
from Microsoft or not. This level of customer support has been a crucial part of Apple’s success,
and Microsoft is right to try to emulate this service.
One of the first things I noticed about the Microsoft store was that it occupied a retail lot
roughly twice the size of the close-by Apple store (see fig. 3). That could have been an attempt
to better its long-time rival, but more likely it is simply because of the larger number of
products it has to offer. Microsoft is a long way from achieving parity with Apple’s highly
successful retail chain and will need to accelerate its plans for expanding its retail presence,
especially outside of the US, where it has not yet opened a store. This is in sharp contrast to
Apple, which has opened 127 stores outside of the US – over a third of its total stores. However,
Microsoft is doing a solid job of showcasing its strengths, and for this customer provided a
compelling alternative to its competitor stores.
Mobile phone retailers, including Carphone Warehouse, 3 and O2, are eager to leverage the
popularity of the Apple and Samsung brands to draw consumers into their stores by using
large window wraps and hanging posters in-store (see fig. 2), while in a corner of Phones 4 U
large Apple and Samsung stands are set up, almost facing each other, displaying the Samsung
Galaxy SIII and the Apple iPhone 5. Although both mobile phone stores and other retail stores
mostly used advertising from multiple brands, the only brand on display in the store window
at the O2 store this mystery shopper visited was Apple, for the iPhone 5 (see fig. 3). This singlebrand
advertising gives the impression of exclusivity between Apple and O2, even with the
iPhone available on other mobile networks, possibly at the risk of turning away consumers
looking for alternative handsets.
In the Verizon store in San Francisco, the sales assistant strongly promoted the Share
Everything plan, a single tariff that covers connectivity for both a tablet and a handset.
Operators have struggled to establish a new revenue stream with tablets, and Share
Everything appears to be a viable way to encourage adoption. The mystery shopper found it
striking that no other store attempted to encourage the customer to take a tablet along with
a handset.
The AT&T stores in San Francisco and Phoenix offered a US$200 discount on a joint purchase
of a tablet and a handset, and Sprint offered its smartphone customers a tablet with 1GB of
data for US$15 a month. Except for at Radio Shack, which did not have any tablets on display,
at least two tablet models were on display in all stores. The largest number on display was in
Best Buy, which was also the largest store visited on the mystery shop (see fig. 5).
Fig. 5: Tablets on display in Phoenix and San Francisco stores
Apple devices were not recommended as frequently as Samsung models, but the brand had
by far the greatest number of advertising displays in stores. Apple branding was highly visible
in the Verizon, Sprint and AT&T stores in Phoenix and in all stores visited in San Francisco,
in the form of posters and tabletop displays, mostly advertising the iPhone but also the iPad
Mini. When asked by the mystery shopper to recommend a phone for an older customer, seven
of the 10 sales assistants recommended the iPhone, mainly citing the simplicity of the user
interface, the reliability of the software and hardware and the handset’s high resale value.
Apple has shown great reluctance to make any major change to the look and functionality
of its OS, instead providing existing customers with continuity between iPhone models over
the years while building a strong reputation for reliability. Another reason commonly cited
by sales assistants for buying an Apple device was the post-sale support offered through the
firm’s chain of more than 400 stores for any hardware or software problems.
The sales assistant who helped the mystery shopper in the Phoenix Sprint store summarized
the Galaxy SIII as being the most innovative phone and called the iPhone the most reliable
handset. This perception could be why sales assistants were eager to promote devices from
Samsung, such as the Note II and the Galaxy SIII, which come with a number of innovative
features, rather than talking about the reliability and ease of use of the iPhone.
Market development
At the time of the mystery shop in San Francisco, the latest device from BlackBerry, the Z10,
was not yet available, and there were no posters regarding its imminent launch. At the time of
the mystery shop in Phoenix five days later, AT&T had the device in its store, and T-Mobile had
received a test version and was due to put a display model out in the coming days. Verizon had
a small poster in the store window advertising the device but did not have any in the store.
The launch of the Z10 in London almost two months earlier was similarly inconsistent in
terms of how the device was promoted and made available in store. The mystery shopper
found that BlackBerry missed a great opportunity to stimulate interest in the new device at
its launches, something that could set it back in the short term in the fiercely competitive
smartphone market.

 

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