Wireless distributor and fulfillment services provider Brightpoint Inc. is going directly to consumers with branded retail stores.
The company said it plans to sell mobile phones and services from Sprint Nextel Corp., Virgin Mobile USA L.L.C. and Vonage Holdings Inc. through outlets under the brand Fono Wireless. Brightpoint, which opened the first store in Noblesville, Ind., said it intends to license the brand to retailers that will own and operate each store.
The stores will also offer products and services from Sirius Satellite Radio. Brightpoint added it plans to assist licensees with site selection, employee training, marketing and merchandising efforts.
“This is a new direction for Brightpoint that allows us to utilize our extensive global supplier and carrier relationships and leverage Brightpoint’s strengths in wireless products, logistics and activation services,” said Robert Laikin, chief executive officer of Brightpoint.
The move comes as competition heats up in the reseller space, which is increasingly dominated by big-box retailer Wal-Mart and electronics specialty retailer RadioShack Corp., according to a study released last week by Telephia. Wal-Mart has more than doubled its mobile-phone market share among major U.S. retailers in the last two years, according to the research firm, taking the lead among national resellers.
The two national chains account for 60 percent of the total market share among major retailers for mobile device purchases, Telephia said.
“With the holiday shopping season swinging into full gear, consumer electronics, such as cell phones and other mobile devices, are predicted to be hot sellers once again,” said Kanishka Agarwal, Telephia’s vice president of new products. “The major retailers, such as the big-box and consumer electronics stores, are the first stop for many shoppers.”
Brightpoint said it will be careful not to step on the toes of its partner carriers or retailers with Fono, and that it will work with partners to pinpoint store locations that won’t siphon customers from current resellers.
“We think it will complement what’s already out there,” said Mitch Black, senior vice president of sales and distribution for Brightpoint North America. “We’re not going to put one right next to a RadioShack.”
Brightpoint hopes to launch about 30 outlets by the end of 2006. While Black declined to discuss specific geographic markets, it’s likely Fono will look to establish multiple outlets in each market, and licensees will be asked to own multiple stores.
Like IMO-a Columbus, Ohio-based concept store reselling wares from Sprint Nextel, T-Mobile USA Inc., Verizon Wireless and others-Fono hopes to differentiate itself with knowledgeable staffers selling a broad spectrum of phones and services. The soon-to-be chains hope to address a growing concern in wireless: consistently disappointing shopping experiences.
“Our authorized dealers are important sales vehicles for us, and IMO reflects our own value of providing service and convenience to the customer,” said Roger Tang, president of the Ohio and Pennsylvania region for Verizon Wireless. “We build relationships with retailers whose innovative strategy best showcases our technology and who positively reflect our brand image.”
Only 24 percent of mobile-phone buyers described their shopping experience as good or excellent, according to a recent study by The NPD Group, and resellers RadioShack and Wal-Mart ranked higher than carrier-branded stores in categories including helpful sales staff, variety and selection of product, and store layout.
While operator-owned stores handled 68 percent of all purchases tracked by NPD for the study, the rise of mobile virtual network operators and Internet voice providers is opening the door for resellers looking to get into wireless.
“While carriers will likely continue to dominate the wireless retail space, opportunities also exist for other types of retailers,” NPD Vice President of Wireless Research Clint Wheelock said last month. “Changes in the wireless landscape such as the emergence of MVNOs and market saturation could also offer new opportunities for other channels.”
Meanwhile, Nokia Corp. announced plans to open retail stores in “shopping capitals of the world.” The handset manufacturer, which hopes to interact directly with consumers to push its phones and services, opened a flagship store in Moscow.
“It is a place for discovery and entertainment,” Olli-Pekka Kallasvuo, president and chief operating officer of Nokia, said of the new outlet. “Whether it is demonstrating the features and capabilities of our latest multimedia smart phone or assisting a consumer with their mobile e-mail settings, we want to offer a relaxing, interactive environment for consumers to truly experience the power of mobility.”
Nokia currently operates several wireless kiosks in select markets across the country showcasing the company’s handset line. However, the kiosks do not actually sell devices. Customers looking to purchase handsets are directed to traditional wireless retail outlets.
