Are poor in-store experiences partially to blame for the slow uptake of mobile content and mobile data services? Where is there room for improvement?
Yes, the in-store experience is the essential customer touchpoint for new and existing data services. We found that many wireless retailers miss readily available revenue opportunities by failing to spend time on customer needs assessment around data services (20 percent of national retailers ask no questions about data service needs or interest) and on data service demonstrations (27 percent of all retail channels did not have live devices available for demonstrations). For example, by taking the time to ask questions about family lifestyle (e.g., presence of children, grandchildren, etc.) you can create an opportunity to sell GPS tracking services. Parents and grandparents often like the idea of being more connected to their children and grandchildren, but many don't know GPS is available. Less than 20 percent of all salespeople recommended GPS, and only 4 percent demonstrated GPS on a live device. In-store sales efforts are crucial to selling data services and exposing them to the market; our research found that there is significant room for improvement around in-depth sales force needs assessment (asking the right questions), data service demonstration (on a live device) and recommendations for add-on services (based on needs assessment).
Are price and style still the deciding factors for phone shoppers? Which characteristics do in-store salespeople tout to influence shoppers?
Price, special features and style are the top three attributes that salespeople advocate when selling devices. Price remains the number one reason for recommendation; four out of seven handsets received a recommendation based on price. However, increasing trends around constant connectivity, mobile utility and self expression through electronic devices have elevated the importance of phones with special features, including keyboard, camera, GPS, music software, etc. For example, special features that match individual wireless needs dominate recommendations for BlackBerry (74 percent) and Palm/TREO devices (77 percent), along with other feature-driven handsets. This is a key shift in market demand and an indicator of the role that wireless devices now play in a consumer's life; the wireless device is becoming more personalized, more versatile and more adoptive to a user's individual lifestyle.
How important is in-store branding and what are some best practices?
Carriers and manufacturers spend a large amount of money promoting their products with national retailers and indirect stores. Of course, if you can't see something, you can't buy it. We found that visible promotional material, the first phone seen, the availability of popular "iconic" devices (e.g. Razr, Pebl, BlackBerry) and display space all contributed to best practices. One handset manufacturer is particularly good at driving promotional displays: that handset brand dominates all others in its recommendation ratings across all channels and its promotional material stood out more clearly based on the use of end-caps, banners, large displays and product placement. 46 percent of shoppers at direct store locations remembered that handset brand because it was the first phone they saw when they entered the store, while 27 percent said it was due to the display space attributed to that brand. We also asked our shoppers to indicate how device brands might make the wireless retail experience more positive. They pointed out the importance of ensuring clear pricing and display information; providing sufficient space; and the availability of live phones to make shopping for a device a more positive experience-verifying the often underestimated importance of in-store branding.
Were there distinct differences in carriers recommended in competitive situations and what drives sales people to recommend certain carriers over others ?
The four carriers face fierce competition, and at five of the national retailers, one carrier gets many more recommendations than the other three. Primarily, national retail sales people make that recommendation based on value (who's got the best deal) and network coverage, which becomes important in the scope of corporate advertising strategy versus store-level messaging. Indirect stores push on value as well, but they don't emphasize network size nearly as heavily and are the least likely to actually recommend a carrier (20 percent don't). So, value and the network remain the top reasons for making a recommendation. Interestingly, customer service and availability of handsets have also rapidly emerged as top reasons for recommending a carrier--21 percent of national retailers and 14 percent of indirect retailers recommend carriers based on the handsets available from that carrier. This, of course, showcases the importance of each carrier's handset partnerships and the promotional strategies. The reason for recommendation thus becomes integral to the number of recommendations each carrier receives and the impact on the sale.
What was the objective of the study and methodology for conducting it?
In the market today, there's currently no objective industry-level report about the sales process at the distribution point for wireless products--the wireless retail store itself. Market Force Information, in conjunction with Telephia, designed Retail Insights to provide exactly that. We benchmarked the effectiveness of direct carrier stores, national retailers and indirect channels on their ability to drive key industry financial metrics like ARPU and data penetration. We focused on four pivotal aspects of the in-store experience that affect high-level metrics: 1) how salespeople assess customer needs for voice, data and handsets; 2) how effectively they push to add services or accessories to the sale; 3) what brands they recommend and demonstrate, and 4) how they position or talk about brands. We chose mystery shopping for data collection because it is an objective methodology that can be used to drive towards strategic issues.
For more information about the recently conducted Retail Insights study, visit: www.marketforceinformation.com.