SummitX 2024: Does Retail Matter? Essentials and Advance Strategies for Physical Wireless Retail
With foot traffic declining and many challenges at play, is the physical wireless store still relevant?
At SummitX 2024, Jason Ellis of Matter Brands and consultancy 3Park argued that the answer is emphatically yes — as long as retailers are not only meeting the basic necessities for operation, but also strategizing and executing to take their stores to the next level.
In a thoughtful breakout session, Ellis offered a series of questions for consideration and handy strategy tips for telecom retail store operators.
Challenges facing physical wireless retail
The first and often the most discuss challenge is the digital customer journey, given the convenience of shopping online. That trend has grown significantly faster in most retail categories that are largely transactional. However, this may be somewhat mitigated in wireless retail by the high price of the product, the relative infrequency of purchase, the perceived complication and setting up a new device, and the sense of security that comes from interacting with an expert sales rep in person.
Another macro trend affecting foot traffic is consumers holding onto their devices for longer periods of time. The driver of that is largely the lack of significant innovation around the device launching. For most wireless retailers, both the online adoption and the extended life cycle of device purchases are largely outside of your control.
The response from most retailers based on declining traffic has been to reduce store hours. There has also been a large push to increase the margin on mobile accessory products. In doing so the assortment of product in wireless retail stores has become commoditized. There is very little difference between the products that somebody can buy in your stores at a premium price, and a product that somebody could buy from Amazon at a significantly less price. If you were a consumer, would you take your time to go someplace that is less convenient so that you could pay more?
Are you meeting the four core competencies for successful retail?
For stores to stay relevant, Ellis pointed out that, at the simplest level, any successful retailer must be able to provide four basic functions to potential customers.
- First, you must have a convenient location.
- Second, the store needs to be open when a potential customer wants to shop, which means no opening late, closing early, or “out to lunch” signs.
- Third, the store needs to be properly staffed with competent and engaging employees to greet and advise customers.
- And finally, the store must have inventory that is interesting for the customer to buy.
How to take control of your customer experience
Further to the basics, and in order to mitigate the effects of market headwinds, Ellis says there are two key factors that are fully in the retailer’s control that could improve store traffic.
The first is the experience that a customer has when they show up to your retail store. Not only did you execute on the four foundational retail blocks, but did you also have expert employees and an environment in the store that made the customer feel like they had a positive experience? The wireless retail sector is notorious for being highly variable in this area. Ellis said the industry has masked the financial deficits of declining traffic trends with compensation reductions, and by lowering investment in the physical retail store environment.
The second and less obvious factor is the merchandise that is available for a consumer to purchase — primarily mobile accessories. In many retail stores, the close rate is less than 10%. That means that 90% of customers that come into the retail store are there for some other reason than activating a new or existing line of service. In years past, many of those customers were not just in the store for service-related matters, they were likely shopping for mobile accessories. Many of those customers now buy their accessories online from companies like Amazon. As a retailer, you need to ensure that the customer has access to any accessories or add-on products they may need.
Six key questions to ask yourself as a retailer
Ellis said that there are six questions every wireless retailer should ask themselves and be able to answer with a confident strategy.
- What consumer trends are we following and are they part of our retail strategy?
- What are our core competencies, what are we the best in the world at doing?
- How are our digital platforms interacting with retail to provide the best overall customer experience?
- What products do we have that we can tell stories around to create differentiated experiences?
- How often do customers tell their family and friends about the products or services that we sold them?
- How consistent and repeatable is our store experience?
Ellis added that there is wide scope for growth opportunity in wireless-adjacent products such as screen protection, healthcare tech, and IoT devices, and retailers must weave these into their store strategies to stay relevant.
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