Why mobile phone stores need to stop selling product
Tuesday, 24 July 2018 | NewsThe ever increasing need to optimise customer experience
Imagine an auditorium buzzing with anticipation for the unveiling of 2018’s latest mobile handset. The room falls quiet, the CEO whips a brick-like device from his pocket and proudly claims that the new device can make phone calls and, wait for it…can handle SMS messaging.
They would be jeered off the stage, yet when it comes to telecoms retail outlets, the industry remains oddly accepting of store design that languishes in the era of 2G. The typical store remains a display unit for devices and accessories offering an appalling customer experience. When was the last time you really wanted to visit a telecoms operator store?
A recent study that sent a troop of Millennials to mystery shop over 70 East Coast cell phone stores returned verdicts of “dirty, tired and dated.” This should be more than concerning for telecoms operators considering this group and their Gen-Z cousins can, and will, switch to online purchasing in a heartbeat.
Rejection by a future customer base of digital natives is a huge problem for an industry in which the typical mobile operator haemorrhages five-to-six per cent of its operating costs on stores. That’s a serious whack to spend on a touchpoint that no longer inspires the customer. Some attempts have been made to combat this - a change of store layout here, a tweak of lighting there - but not only are these not enough, they miss the point. It is time for a major transformation starting not just with aesthetics, but with an overhaul of the store’s very purpose. Mobile retail stores need to stop selling product and start selling the telecom operator’s direction, ambition and soul.
That “customer acquisition” remains the number one metric by which the industry measures a store’s performance is telling as to how out of step it is with consumer habits. If your goal is to shift units, there are dozens of more cost efficient ways of doing this than running a store. Bricks and mortar locations must be much more than a just point of transaction. This is especially the case for telecoms operators where revenue is generated post-sales through payment plans. They need to sell a vision of the future that puts the brand at the forefront of purchasing decisions whichever channel is eventually used. Moreover, in a world where permissioned data is going to be scarce, stores become a place to collect valuable information and learn about customers. Brand loyalty, customer retention and customer information become the new metrics for the digital age.
Elsewhere in retail, brands have woken up to this. Take US men’s apparel retailer Bonobos that is changing the way we purchase clothes with their “guideshops”. A one off visit to one of these sets a consumer up with their perfect fit for future online ordering. Elsewhere, gourmet food and cookware chain Williams Sonoma lures customers away from e-commerce to its physical stores with its Return to Learn initiative where customers can meet with in store experts to learn tips and techniques for making the most of their new cookware and kitchen electrical purchases. Neither of these initiatives are focused on an immediate sale, but they do offer a physical experience that Amazon, for example, just can’t (yet) match.
Albeit limited, there have been admirable efforts by the telecoms industry to break the retail store mould. Verizon’s “Next Gen” store concept boasts virtual reality headsets, collaboration areas and bookstore-esque “what we love” displays, while AT&T’s entertainment focused retail stores offer customers ‘whenever wherever’ content. Apple, as always, leads the way with its flagships, featuring award winning architecture, tree lined genius groves, and iPhone fitting rooms; people actually enjoy visiting.
Yet despite the bells and whistles, the quotidian experience of a typical mall phone store remains very much cookie cutter: a greeting from a salesperson - tick, payment plans displayed on digital screens - tick, a table to play with devices, tick. For our experience driven Millennials and Gen-Z it’s all a bit, well, samey.
Mobile carriers need to re imagine their stores as inspiring spaces where customers can experience the technology universe. Places, for example, where people drop by to try holographic video messaging and learn how 5G will improve their home office. In these interactive settings where consumers play with the latest developments in connected home/life technology there’s not a table of handsets in sight!
Find out more about Turkmen Deniz, Partner
Find out more about Chris Woodland, Partner