Mobile Phone Retailing Sucks

March 6, 2004

in General Interest, Wireless

I recently made a purchase decision for a new phone without any detailed help from the retailer, limited insight from the web and with limited infomation from the manufacturer although I’ve visited all the key websites before. Perhaps this rant is similar to Robert’s last year when out looking for a new Laptop. I did list some fix it points at the very end.

Frankly this is a post about the state of mobile retailing and why it sucks. I’ve been in the market for a new phone or contract potentially for three years. My current phone was over four years old and I haven’t had a fixed contract with Verizon for over two years. As part of the purchase process I’ve visited Cingular, Verizon, AT&T, T-Mobile – “DISPLAY” retail stores. These are the stores that only exist to sell you a plan and a phone. I’ve also visited Radio Shack and keep a watching eye out when I am in Best Buy, Circuit City, CompUSA even Target etc. For the most part I’d bet all of you have been in or past some mobile phone display at least once in the last year.

Typically when entering a Mobile retailer you find phones lost on tables and on flimsy shelves where there is a small feature list and price card with them. The phone is not operating. It may well be tied down with some form of harness. Because of the limited assortment a typical store may actually spread the same phone in a couple of locations. So when you are there you know there is not much to look at. The phones are all small and the space is all big.

So what’s this post about….. The fundamentals of Mobile Retailing in the US are sick and ready for a new format. This UK data probably applies here too.

two thirds have to see and touch a mobile phone before buying it,
over 60% resort to a retail store to buy their mobile phone.

So most of us go to the store to buy a phone or are given one. The likely exceptions are buying one for a busy partner (eg on the family plan) or when a friend has simply sold you on their model. Only then would an online only shopping approach make sense. So retailing is important to the cellphone purchase.

It made sense to retail phones in the high street when no one had them and making them visible was part of securing adoption. For months I’ve been told by Verizon that they will give rebates for trading up to a new phone and locking in to a new contract (two years). That means handsets are being marketed as commodities rather than branded products that fit with different lifestyles. The new phone merely an incentive to lock me up.

On reflection I found there there is a lot wrong with the experience. After visiting many online sites I found they were plan-centric rather than communication centric. Thus you may as well make your basic choices on the web first. Mobile providers are like car dealers Each one only has a few models. Having then made your choice you visit the retailers store.

These are my reflections:

  • There is no initial or ah ha experince in the dead zone are in most of these outlets. So navigating them is difficult. Where should one start? There is nothing that makes one smile.. there are no flowers, you can’t smell the fresh cookies, in fact despite the fact that this is a store about connecting and talking… talking is most likely to be in hushed tones. The real question in their mind is: Are you a current customer? or Are you a new customer? This relates to plans when you are thinking product.
  • Product information is missing or wrong and the sales people ill equiped to handle it. When selling paint you provide color samples and plenty of how too information. If you are home depot you provide classes for laying bricks or making a deck. I know most people have never head of blogs or photoblogs and yet there is not one thing in any of these stores that provides examples or the ability to think about integrating a “mobile communicator” as part of your lifestyle. Not one retailer I went into was prepared to handle questions about photoblogging. There is no board with times and classes and yet this would be simple for the most part. Perhaps the real opportunity is for Apple stores to now start retailing phones as well. At least when I go into an Apple store I can play with the stuff. Talking on the phone may seem a little stupid. However would you buy a bed without laying on it first? Believe me taking pictures and e-mailing them home right then and there is powerful.
  • Signage Should I continue on siignage which is simply boring? Few stories are told. There is no kids section, no soccer mum, no CEO Dad, no Geek fest. No message that says this outlet is about the future of communication. They talk price plans first, rather than communications and connecting people. There is nothing that sells the “camera phone” experience. You can’t pick up a phone and simply send a photo from it. For the most part the people behind the counter can’t even demonstrate it. Similarly the “business” oriented products fail to communicate real stories on productivity. There were no handout for integrating communication solutions in the SBHO workplace.
  • Tag Details – both features and benefits are missing or incorrect on product price cards. My Nokia 3650 had no details listed for its PDA functionality. There were no pictures that showed it being used in different ways. There was nothing that talked Nokia’s story. If stocking is a problem then I’ll order it. Just give me a loaner for a couple of days. When it is in I’ll come back and pick it up.
  • Navigation: While (unlike most stores) there is no racking “volume” cue to let you know what is the best seller. or the most popular models. In one retail channel we used to over stack the product…. made it look like we sold more and faster. Once they have helped you make up your mind they go back in the cage and get the phone. It’s all part of the secret number club. Plus at that point it is very officious… you sit at the bar for ID etc. In fact all these stores I went in have the admin / desk at the back so the greeting process takes place on the floor when as a customer you are already lost just trying to understand either the plan or the merchandise.

    Nokiabox.jpg Nokiabox2.jpg

  • Packaging Visibility: Why aren’t the boxes displayed? There is more information about the product on the box than I found anywhere in the store. The store also had plenty of printers handy so they could have printed a custom set of leaflets for a folder on their recommendation for me I was going to leave without buying.
  • Service and Touch: Regardless of whether a rep is immediately available there is nothing that gets people experiencing new things with the phone while in the store. The merchandise is dead… you can’t demonstate it. There aren’t ringers going off. No one is taking pictures etc.
  • Accessories. If this is a lifestyle product there is a complete lack of accessories in most of these stores. Whether clothing or ear pieces. I still find it hard to believe that 90% headsets still only come with black cords. Where is red or purple? Where are stripes? Where are thick cords or thin etc. They had no accessories for my selected phone. They could have sold me a case, color upgrades, the larger memory card, and the Nokia bluetooth headset on the spot. All have been purchased. So they missed out on about $200 in additional sales on the spot.
  • Software and phones. The retailer wants to sell you games but doesn’t offer any free downloads with your new phone. This should be part of the experience, make it easy then and there. They don’t offer or show you how to transfer your contact list there and then. There is nothing that lists compatible software and what other applications you may like to add. I know.. most phones aren’t that advanced yet. Still I know of blogging software like BlogPlanet and Kablog (separate post) and there are other items.
  • Portability and Recycling: Infomation around number portability was sadly lacking as was information on old phone disposal. There are good programs for this. Appropriate phone disposal is a must. When I left T-Mobile they should have provided me a recycle envelope mailer for my old phone equipment. I couldn’t do it then, that phone was still working and my number was being transferred. Now the phone is in the drawer…. Where was the disposal display?
  • Usage Policies None of these retailer appear to take a point of view on policy use. Eg Camera phones in secure areas, in gyms etc. Educating on the benefits eg use by real estate agents, sale forces, ethnographers etc.
  • Travel Plans: In Europe SIM cards might be everywhere. I know what one is but what does it mean. They didn’t offer to sell me a prepaid one for my next trip to Europe. I couldn’t buy one now for my upcoming Mexico trip. Why not?
  • Ranging and Assortment: No retailer would sell me the Sony Erikson P900 I wanted and even when asked weren’t trained enough to know that here was a cutomer that was prepared to pay more for the phone than the annual plan package.

    Retailers talk about the lifetime value of customers. Yep I am currently a customer of T-Mobile and will be for the next 11 months. My phones unlock code is available in three so I can then sell it on eBay and buy what I want. For the moment I am a Nokia customer but I don’t feel about them like I feel about my IBM T-40. The T-40 was my choice. The Nokia 3650 was a compromise resulting from poor retailing the mess American companies have made of selling mobility and the lack of imagination in selling it to the population at large.

    Perhaps most importantly I have no reason to ever go back to the T-Mobile store again. My account is now online. They missed that I was buying a new plan have two kids 12 & 15 who are dying to get mobile phones and yet they don’t provide a family plan that works for my peace of mind and budget. There is no reason to take my kids to a store — there is no excitement there. Yet they didn’t even try. There is no special deal to sell extra phones. We bought two in a day. The second phone we made clear was a cheap choice because their selection encourages me to go gray market shopping. And now with a SIM card system I can afford to.

    So we have a retail strategy driven by price plans with no part of creating value. By selling policies with discounted new phones every couple of years if I don’t trade up in a years time I am simply subsidizing those that do. It’s a slow way to get to the handsets we really should want and desire. Perhaps it is all just designed that way. Could the mobile phone providers be using this to slow the adoption of more advanced technology? Possibly.

    Overall the experience wasn’t very satisfying. For the most part they seem to forget that consumers get joy from leaving with a new phone rather than a new plan.

    What would my advice for T-Mobile be?

  • Significantly extend the range of products offered. Eg nobody beats us on choice for connectivity. Put some in a glass display case. Actively start merchandising unlocked phones in parallel.
  • Increase the accessories to add the the lifestyle impact. Starbucks does this. How many ever buy a coffee maker there? From headsets to faceplates make this easy.Some of this has to be ordered online. Still that is no reason not to bring it into the store.
  • Segment the store in to emerging segments. It’s no longer mobile phones and mobiles for business. It’s phones yes, it’s road warrier, it a visual digital lifestyle, it’s new media. It’s kidszone and teen zones. Each needs the stories.
  • Expand the “How To” section. The things you can do with your phone.
    For more complex ones I’d introduce classes. At least have the material for searching the web and installing newsreaders. I think Camera phones might become even more popular with better demos.

  • Selling phones and selling texting through examples and play. Guess what it results in – higher value plans.
  • Plus I’d put the boxes out there. I’d give the manufacturers greater opportunity to communicate their products attributes through the packaging. Even empty boxes would be a start!

    Then I’d employ some new retail architects and tackle the real service knowledge issues. As a point in closing I follow two camera phone type blogs. Alan Reiter’s and PicturePhoning. Neither of these take a close look at the retailing of Camera phones and emerging communication devices. Perhaps they should.

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