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Big-box retailers remain strong behind wireless: Some may be suffering, but all agree mobile will remain hot

The wireless industry is clearly a money-making field and everyone’s trying to get their hands on a piece of it, especially big box retailers. Establishments such as Wal-Mart, Target, Best Buy, Circuit City and Radio Shack have been acting as third-party retailers for carriers for years and as technology and devices make an innovative turn, these retailers have been quick to follow.
Best Buy has been keeping up with the ranks. It is the only third-party retailer that has been allowed to sell the Apple Inc.’s 3G iPhone outside of AT&T Mobility and Apple Inc. stores. AT&T Mobility pays a hefty price for selling the device, reaching $900 million in subsidies during the third quarter. Best Buy spokesman Scott Moore would not comment on how much Best Buy expects to pay in subsidies for the device, but if the 3G iPhone continues to prove popular it could be a hefty sum.
Wal-Mart has also been rumored to eventually carry the device. But when asked about the speculation Melissa O’Brien, spokeswoman for Wal-Mart, said that rumors always surface about what the retailer may or may not offer.
“This particular chatter is more of the same,” she said. O’Brien declined to comment any further on the issue.
Speaking of speculation, according to a Wall Street Journal report, Circuit City may be considering closing many of its 712 stores across the nation. They’re also expected to lay off many employees to veer-off a Chapter 11 bankruptcy.
Jim Babb, spokesman for Circuit City, would not confirm or deny the rumor, but did say that management and the board of directors were reviewing all aspects of business. But closing Circuit City locations means closing Verizon Wireless locations as well. The two companies have an exclusive agreement and the retailer has been offering the carrier’s devices and services to its customers.
Brenda Raney, spokeswoman at Verizon Wireless, said it was too soon to comment on an outcome and that they won’t be making any firm decisions until they know what will happen with Circuit City.
“The plans we have are contingent upon theirs,” she said. “It depends on how they move.”

More mobile
However, it seems the news for Best Buy, a known Circuit City competitor, is just the opposite. The retailer is not closing any of its stores, in fact its opening a whole new line of standalone locations, dubbed Mobile Life stores. The stores are designed to help its customers get more from life on the go, and this doesn’t just encompass cellphones. Moore said opening Mobile Life stores has a been a part of Best Buy’s mobile strategy for quite some time and just happened to launch at the same time when the economy took a downfall. Regardless, Moore said because mobile phones are a critical part of consumers’ daily lives, they’ve decided to dedicate more energy to this area. The stores features devices that can be used in a mobile format including laptop computers, MP3 players, mobile media devices, computer and phone accessories and of course, mobile phones. The stores also have mobile specialists and Geek Squad employees on hand. After doing research on its mobile customers, Moore said they learned that they need to focus on much more.
“Mobile is more than just a phone,” he said. “The consumers led us to this space.”
Moore said the handset offerings at the standalone stores will be complimentary to the lineup inside Best Buy’s large retail stores. There are currently three Mobile Life test stores up and running.
It’s difficult to tell though, how much of an impact selling mobile phones has for these retailers. Do they see a large profit or does having cellphones mainly drive traffic into the stores? Moore also declined to comment on this aspect of business, but did say that mobile phones were the next place for Best Buy to make a difference.
“We feel very good about the experience overall,” he said. “The experience we’re building with the consumer is very positive and a win-win for everyone.”
Keith Mallinson, president of analyst firm WiseHarbor, said things have gotten a little better in the stores. Many of the retailers had problems with the wide variety of employees selling the devices.
“They were not well enough trained to do the job particularly well,” he said. “They tried to get more focused people doing it.”
One thing’s for sure, the phones on these big box retailers’ shelves definitely aren’t going anywhere anytime soon. The economy may be on the outs, but again, cellphones have become vital for human survival.


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