The holidays are over and that usually calls for a sigh of relief. Unless of course you’re a retailer who lost money. Each year, from Black Friday until the end of December, retailers in the wireless industry shove products, rate plans and accessories down customers’ throats with promotions, specials and even freebies – not to mention the various and sometimes ruthless holiday ad campaigns.
The deals were great, but did they work? The industry must now evaluate how sales went, and what needs to be done to weather the current economic storm.
Inside the box
Best Buy Co. Inc. is one retailer that can sit back and enjoy that sigh of relief. Scott Moore, VP of marketing for Best Buy Mobile, said wireless demand was up and customers had a pinpoint view of what they were after.
“The word of the season was smartphone,” Moore said.
Moore noted that the retailer was pleased overall with how wireless sales for both postpaid and prepaid went during the holiday season. Best Buy offers devices and plans from virtually all carriers and Moore said that facet of its mobile business worked to its advantage this year.
“We were the one place this season where you could compare the BlackBerry Bold, the Blackberry Storm, the 3G iPhone and the Samsung Instinct,” Moore said.
Moore also indicated that customers walked out of Best Buy not only with new devices, but with the whole package. Many customers purchased accompanying cases, Bluetooth devices and other accessories.
Moore added that customers were also motivated by the bottom line.
“The focus was on value,” he said. “They also liked the no mail-in rebates. They (rebates) are applied instantly.”
Independent retailers
Outside the big box, Wireless Zone, a third-party retailer for Verizon Wireless, had the Blackberry Storm to thank for its successful holiday shopping season. Mark Asnes, executive VP and COO for Wireless Zone, said December was very successful, putting phone sales up 12% year-over-year, despite a few rough weeks.
“October was tough, November was a little bit better, but December was very strong,” Asnes said.
From November to December, Wireless Zone said it doubled its BlackBerry business, thanks to Research In Motion Ltd.’s latest touchscreen device. In fact, demand was so high for the new device, Asnes said, that stores often ran out.
“It was very tight the first two weeks of December,” Asnes said. “But [during] the last two weeks inventory filled up and we filled a lot of backhaul for our customers.”
Despite the large interest in the Storm, Asnes said most customers were cool to higher-priced data services and handsets. The majority of customers are still not willing to fork over the extra cash just yet.
“Twenty-five percent of the phones we sold were on a PDA or BlackBerry model, but there are still plenty of customers looking for phones under $50,” Asnes said. “Most of the people coming in were still looking for low and mid-tier products. The $49 range was really big.”
Wireless Zone also saw successes throughout 2008 despite the economic downturn. Asnes said the retailer added 60 stores this year, putting its total at just over 300 stores nationwide. Further, Wireless Zone plans to open an additional 100 stores in 2009 to get to that 400 mark, a plan that Asnes calls “Focus 400.”
