Insights from a Mystery Shopping Trip (Part 1)

Apple and Samsung Dominate

To start the year, I thought it’d be interesting to visit some stores retailing mobile phones to assess current trends and challenges. A morning at the Westfield shopping mall in West London saw me and my colleague Vaishali noting a couple of things:

• Dependence on Apple and Samsung is higher than ever
• Retailing foldable devices is challenging

In part one of this blog, I look at the dominance of Apple and Samsung in the UK retail environment. Part two, looking at the challenge of retailing foldables, is here.

Two Brands to the Fore

A decade ago, a visit to a mobile phone retailer would afford the opportunity to see a multitude of devices from numerous brands.

Those days are largely gone. It’s not a new story, but retailers’ dependence on Apple and Samsung devices in the UK is higher than ever. It has become the path of least resistance as more and more people get hooked on the iPhone. For the rest of the market, Samsung has an attractive range at all prices that satisfies most requirements.

We found the best metaphor for this situation at EE’s flagship Studio store in Westfield, where the phone section of the shop is dominated by two podiums, labelled Apple and Samsung (see below). Other phone-makers barely get a look-in.

At present, the only other player in town seems to be Google, with its Pixel devices. In the UK and many other markets, Google is investing heavily to promote its products and this has enabled it to a place in retail and in people attention. Sales volumes remain relatively small compared with those of Apple and Samsung, but the progress is impressive.

That’s not to say that other brands aren’t available. During our visit, we saw products from Doro, Honor, Motorola, Nokia (HMD Global), Oppo, Sony, Xiaomi and others, but they were typically tucked away from the main display area, and this reflects the huge struggle facing other phone makers to compete. It feels like there’ll be some casualties in the next couple of years.

For some time, I have felt that operators’ dependence on Apple and Samsung isn’t a good thing, but it’s hard to see things changing any time soon. Smartphones are a mature product. Each new generation brings relatively incremental changes and consumers just aren’t as excited about new devices as they used to be. They’re happy to hold onto their phones for longer, and in many cases, buy their next phone online without even visiting a store. All signs point to the retail squeeze intensifying. The growing popularity of second-hand phones is also piling on the pressure.

On this basis, it’s little surprise that network operators are trying to diversify the offerings in their stores. That means working harder to promote converged subscriptions for mobile and broadband connectivity. Additionally, other products such as smart home devices, game consoles, wearables, virtual reality headsets, connected laptops and TV services are becoming increasingly prominent. It’s early days for some of these initiatives and I remain sceptical whether they will offer enough to fill the gap.

In some cases, it seems like retailers are close to giving up. Our trip to Currys was a dismal experience. Unlike the enthusiastic greeting received in most stores we visited, there were no staff to be seen. There also appeared to have been an epidemic of thefts, leaving multiple gaps in the displays, with the worst being the Samsung smartwatch display, where every item appeared to have been stolen, leaving just a few forlorn watchstraps (see below). One podium was completely bare apart from screw holes in the work surface. If that’s the situation in what should be considered a flagship store in Currys’ retail estate, I fear for what I would find in other branches.

The pressure on UK retailers is palpable. It’s not just phone shops that are suffering, every high street is withering. The ascendency of online retailers has taken its toll and, in many cases, retailers have struggled to overcome the impact of the pandemic, which has changed consumer behaviour forever.

Sadly, further consolidation of mobile network operators and consumer electronics retailers appears inevitable.