Reality Check: Phone store best practices from retailers in other industries

Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
There is no doubt that the competition is fierce in the global wireless industry, and in most markets wireless customers have a great deal of choice in selecting a provider. While many customers now shop for communications-related services and products online, research shows that most customers – 75%, according to a recent Accenture survey – prefer to shop in-store. Customers want to touch and feel the devices, speak with knowledgeable sales consultants to help make their decision, and then immediately take home their chosen device and start using it.
For these reasons, the brick and mortar store is a vital touch point for a wireless provider’s brand. However, many phone stores are falling short of performance standards and not achieving their revenue potential. Customers complain of long wait times, unknowledgeable staff, and products running out of stock. From the provider’s perspective, operations can be quite costly, reducing profitability and making it difficult to roll out new stores or expand to new geographies. In order to satisfy customers and maintain their brand loyalty, wireless providers should look to retail leaders outside of the communications industry, such as Best Buy, GAP, or Abercrombie & Fitch, for best practices and technology approaches that have proven to be successful.
Long wait times are one of the biggest complaints from wireless customers. They may wait as long as 30 minutes for service during peak shopping periods, and then the sales transaction itself can take an additional 30 minutes. No wonder one in four customers leaves phone stores empty handed, citing poor customer experience, which results in $2.5 billion in lost sales across the industry, according to a recent JD Power & Associates study.
Outmoded and siloed point of sale (POS) systems with limited functionality and an inability to share data are perhaps the biggest roadblocks to a superior customer experience. The vast majority of legacy retail store systems were not designed to support increasingly complex telecommunications transactions and have restricted visibility into critical information about plans and devices. And, since the majority of legacy phone store systems are not fully integrated with each other or with the providers’ CRM systems, sales consultants often have to bounce from one system to another and log in multiple times just to satisfy the most basic customer requests. To ensure that customers actually get the plans they want, sales consultants may have to resort to time-consuming workarounds, manually entering information in one system that already exists in another system – a cumbersome process that inevitably increases errors.
Further, because siloed POS systems have no built in workflow, the level of service often depends on an individual sales consultant’s memory. If the sales consultant does not remember the next step in the process, customer wait times will increase.
As retail leaders in other industries have found, an integrated, user-friendly POS system can solve many of the challenges described above. By avoiding multiple log-ins and guiding sales consultants through simple workflows, the system can help accelerate transaction processing. Further, systems that propose up-sell and cross-sell opportunities such as add-on accessories can help to increase revenue and transaction value, a key retail metric.
Wireless providers’ outdated, siloed systems also cause problems in inventory management. The legacy systems in place at many wireless phone stores are largely designed to process transactions, not keep track of inventory. All too often, inventory management is paper-intensive, time consuming and error prone, resulting in unacceptable revenue shrinkage – inventory losses due to untracked errors, employee theft, supplier error, or fraud.
The lack of inventory visibility negatively impacts supply chain decision making, meaning that popular products are often out of stock, while discontinued or obsolete items remain in stores creating higher inventory carrying costs. In addition, sales consultants often do not have the inventory visibility needed to complete sales when products aren’t readily available. For example, if a given handset or accessory is out of stock, sales consultants may be unable to complete sales because they can’t answer fundamental questions regarding when the item will ship to the phone store or if it is available at a nearby store or online. The ability to answer these and similar questions can save the sale. Unfortunately, legacy store systems provide little insight into inventories in their warehouses or nearby company or partner stores. A desired item could be right down the street at a third-party partner phone store or just across the mall in a company-owned store, but the sales consultant would not know.
According to a recent McKinsey & Company report, poorly managed phone store inventories can result in losses “up to 20 percent of sales at some stores because of handset stock outs, even when inventory is available in a nearby store.”
Industry-leading retailers have found that integrated inventory management systems can help ensure optimal stockholding – having the right stock, in the right place, at the right time, and in the right quantities. These systems ensure that transactions are updated and passed to headquarters systems in real time, so that decision makers at headquarters can make fully informed supply chain decisions. And, with company-wide inventory visibility, sales representatives can complete sales even if items are out of stock at that particular store, by locating them at a nearby store and processing the order right in the same system – without requiring a phone call to that store. All of the above challenges in retail store operations, among other factors, have also resulted in very high operating costs. The cost to train employees on various, disparate systems is also a burden. By leveraging integrated systems based on retail-industry best practices, wireless providers can significantly reduce operating expense. Since many wireless providers are looking to expand into new regions or countries, the importance of integrating and streamlining systems to reduce costs becomes even more significant.
To ensure even greater success in retail phone stores and enable scalable operations, wireless providers are best served by leveraging the best practices that have proven so successful for non-communications retailers.
As Analysys Mason Principal Analyst Mark H. Mortensen noted, “Software solutions with embedded retail intelligence and best practices will significantly improve overall efficiency, customer service and competitive position.”
This proven approach can help wireless providers deliver a superior customer experience with shorter wait times and increased product availability so that customers do not go home empty-handed, while providers simultaneously drive costs down and transaction values up.
Chris King is senior director of communications industry marketing for Oracle Communications. He is responsible for driving Oracle Communications’ marketing and sales demand activities in the industry. Previously, he was the senior director of worldwide telecommunications markets for BEA Systems.