Mobile Networks Innovate on the High Street as the Fight for Smartphone Customers Intensifies
A fresh approach to retail feels long overdue and offers a rare opportunity for operators to differentiate themselves in a highly competitive market. As the process of buying a smartphone get more complicated, customers need more support to get the most out of their devices and understand complicated data pricing.
Apple has set the benchmark for customer support through retail spaces like its stores in Regent Street and Covent Garden, where there's a strong focus on demonstration and learning. Recently, we've seen mobile network operators trying to emulate this model. They aim to overcome some of the barriers to buying a smartphone, as well as strengthen brand loyalty and reduce churn.
For example, O2 is readying a new two-floor, 3,900 square foot retail outlet in Oxford Street. It intends to allow consumers to trial devices and learn how to use services. Smaller, more-local shops will focus on selling. O2 is also investing strongly in its Guru programme, in which staff offer advice and fix technical problems.
Meanwhile, rival 3 recently announced that it is redesigning all 330 of its retail stores following a successful trial. It is also rolling out another 70 shops by 2015 as it looks to reach its target of 10 million customers. In the trial, 3 introduced so-called "discovery areas", which showed off the latest devices and let customers compare tariffs on interactive screens. It hopes that a more contemporary design will create a relaxed environment in-store and allow staff to engage more easily with customers. It's an encouraging step, given that 3 has been regularly criticised by Ofcom for its poor customer service.
Vodafone too is refurbishing its stores. Its three-year programme includes a greater focus on showcasing the capabilities of phones and employing more staff to give technical advice.
And Everything Everywhere continues to create branded stores selling both Orange and T-Mobile services. It's investing £50 million into revamping its customer service operation and will use agents trained on specific devices and operating systems. It hopes this strategy will enable it to maintain its low churn rate, a strategic goal of the company.
UK operators' innovations are important to encourage subscribers to buy a smartphone for the first time and to prompt existing users to adopt more advanced features. The UK is a leading market in the use of data services, but there is still plenty of room for growth — Ofcom said recently that 61% of the population do not yet own a smartphone.
Buying behaviour is also changing. Typically, customers do their research online first and enter shops far better informed than they used to. Operators need to adapt to this trend. Clever use of education and engagement could put them in a strong position in an increasingly homogeneous market.