High street retail is central in fight for customers

High street retail is central in fight for customers

The mobile industry may be a fast-paced environment of ever changing devices and deals, but customer loyalty for network operators remains high. A YouGov report carried out last week revealed half of mobile phone owners in the UK have never changed their network operator, while 67% have been with their provider for three or more years.

This may be about to change, though, as a new generation of consumers hunt for perks and cash savings. With similar price plans and almost ubiquitous coverage, the big four – EE, O2, Vodafone and Three – have to think differently if it wants to add high-spending customers to its base. Tom Rees, YouGov’s SixthSense research manager, said operators would have to adapt as a thrifty and tech-hungry demographic takes to the high street to look for deals and knowledge to switch providers seamlessly. Rees told Mobile investment in retail stores and devising more incentives like attractive smartphone insurance propositions may be the difference in gaining market share.

He said: ‘Handsets rather than tariffs are the first major concern for a consumer and stores are usually the first port of call on the journey to purchase. In stores, operators have the opportunity to talk and engage, and new demographic trends will help. 24% said they used a network operator store as their first point of contact compared to 23% using the web originally. It’s an advantage to engage with customers face-to-face and it shows investment in stores is worthwhile.’

High street strengths

The four major operators have taken steps to improve their in-store experience over the past 18 months [see box]. O2, EE, Vodafone and Three have all spent money on sprucing up store aesthetics and ambiance, although Rees said there were other elements that could capture the attention of potential new customers. He added: ‘There is also a strong interest in insurance, especially with smartphones dominating the market, so if operators can price it lower or bundle it in a way that isn’t perceived as negative that may be a way to differentiate.

‘The money aspect is very strong. It’s the main motivator for change as 39% only consider change if they will save money. There lies the main issue because the mobile industry is a highly competitive and price-sensitive marketplace, so it’s very difficult to find any significant differences between networks, or at least there’s the perception that nothing stands out. Operators will have to be creative to grab new custom.’

The research found 90% of individuals weren’t even thinking about switching provider, although a fifth of men aged 25-39 were expecting to move on at the end of their contract and 60% of 16-24 year olds had swapped operators at some point in their lives. Rees added: ‘In the future it’s going to become easier for networks to tempt customers to switch, and by the same token, harder to hold on to. Generally, if you come to young people with an offer they’ll be receptive to it.

Operators will be able to appeal to the younger generation with a good deal, so they can’t rely on their existing customer base. It can be classed as an opportunity and a threat.’

According to Rees, a large proportion of individuals don’t know when their contracts are due to end, and ‘one quarter’ of the population has no idea how to ask for an upgrade. He said: ‘Networks can plant a seed if they contact customers with the offer of an upgrade, but this is a double-edged sword. On the one hand the customer may sign up with their existing provider for another two years or, alerted to their new found freedom to leave, they might shop around and join another operator at the end of their contract.’



The changing faces of mobile retail

Despite a significant online and call centre presence, network operators still value their position on the high street. EE, O2, Vodafone and Three have all invested considerable amounts of money towards improving face-to-face operations in the last year, which could prove to be a key factor in attracting future business.

EE has more than 600 stores across the UK and consolidated every Orange and T-Mobile shop during a rapid transformation last year. The operator invested in new-look stores after launching a fresh brand, while promoting a new product in 4G. Similarly, O2 has invested on extensive store refits and converting traditional retail stores into franchises to improve customer and employee experience. The UK’s second largest operator heavily backed its Guru initiative, which gives customers in-store help and advice with the technical aspects of their handsets.

In May 2012, Vodafone also announced a three year store refurbishment process to improve store experience by giving customers the opportunity to experience devices before purchasing.

Last November Three launched a store refresh which covered its entire high street estate, with the intention of providing the right attitude and environment for potential and existing customers. The operator revealed its plans to double customer numbers as a direct consequence of improving its shops. 

Written by Mobile Today
Mobile Today


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