Telecom retail and distribution: Smartphones and tablets pushing independent retailers and demanding innovation from operators
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...integrate their channels to offer a truly multichannel strategy (see fig. 3). Currently operators are offering devices through various different channels, but these channels are far from being integrated. The survey respondents recognized the increasing importance of independent retailers in the market, especially for smartphones and tablets, and they also highlighted that staff training is the way to not only retain the workforce, but also provide better customer experience and support.
Fig. 3: Service providers' retail plans over the next three years
Regarding the drivers for potential customers to go to a retail store, the respondents believe that buying devices is the main driver, followed by looking for a better deal and trying new devices and new features (see fig. 4). This demonstrates the importance for the stores to have the right mix so consumers can 'try and feel' a new device before actually buying it.
Furthermore, operators will need to be able to offer the best deal (devices and services) as there is an increasing number of independent retailers offering pricing/offer comparison across the different operators (e.g., Carphone Warehouse, Amazon). Technical support was also another important driver, which means that operators must be prepared to offer a support alternative to their customers.
Fig. 4: In your country, how important are the following factors for consumers when they visit a retail store?
Operators like Sprint and Vodafone are aiming to migrate most of their subscription base into smartphones. To do this, it is important that they offer the right conditions to convince the clients about the benefits of changing to a smartphone as well guaranteeing support throughout the customer’s life time with the operator: Programs like Sprint's Ready Now, Carphone Warehouse’s Geek Squad and Apple’s Genius Bar are good examples here. To remain competitive in the telecom retail market, operators will need to reinvent their business by changing from simple voice phone retail to the more sophisticated smartphones and tablets, moving into the consumer electronics arena.
Independent retailers will increase their share of the telecom retail market. Tablets and smartphones will be their main focus as these devices are getting closer to the consumer electronics category, an area in which independent retailers already have expertise. Operators will need to evolve their offer and aggregate new features into their retail strategy, such as a better shopping experience, technical support and multichannel integration.
Tablets are having a significant impact on the telecom retail business. As operators are not able to subsidize these devices, independent retailers are taking the lead and developing innovative strategies for these devices. Amazon is a good example - after the company launched its own tablet, it was not just looking for hardware sales opportunities, but also looking to drive other initiatives on content and applications.
A multichannel strategy is a must to optimize operators' retail channels. Currently operators offer products through a number of channels ('bricks and mortar', online and telesales). However, these channels are not fully integrated, which can make the customers frustrated. The operators need to rapidly address this frustration as the independent retailers snapping at their heels already have multichannel experience that can be applied easily and quickly to telecom retail.
For more on this topic, check out Informa Telecoms & Media's report Telecom Retail and Distribution: Identifying winning strategies and best practice - 7th edition from where this article has been extracted.
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© 2011 Informa Telecoms & Media