O2 is showing fresh commitment to its high street offering with a new store format trial and shop openings planned for 2012.
O2 UK CEO Ronan Dunne said it is looking at an ‘experiential’ format, where users can try out the latest devices. The trial stores would be a destination where ‘we can fully bring all our products and services to life’, Dunne said. Analysts likened the trial to how Apple uses its flagship stores as a destination point.
The trial will be centred on O2’s forthcoming 3,900 square foot Oxford Street branch, which Dunne described as an ‘evolution of its retail and distribution models’.
Dunne said the trial will follow a ‘hub and spoke’ model, where the flagship store will serve as a focal point for product testing while smaller stores nearby will be used for purchases. He said:
‘We could use our Oxford Street store to show off services and the experience of using the devices by using the Gurus and demonstration space.’
He added: ‘We are finding that customers are differing from the normal retail model. They are researching online and coming in store to buy our products. They are quite readily adapting to new technology and becoming savvier. We’re looking at our CRM and business intelligence in order to optimise stores.’
O2 will open at least 20 new stores before the end of the year and Dunne also promised a large investment in its Guru staff, who offer advice and tips to customers.
Charles Stanley retail analyst Sam Hart said a focus on destination stores could pay dividends. He said: ‘You could draw a comparison with Apple. The larger flagships play an important role for them by building the Apple brand and interest in their devices. People might not buy anything from a flagship store but they are more likely to go to a smaller branch and purchase products there.’
Strategy Analytics’ director Phil Kendall said companies like Carphone Warehouse have had success with destination stores. He said: ‘Operators have spoken for some time about using their retail stores as part of a broader customer retention strategy.’