Defiantly, thrivingly old school

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The Phone Shop, a single store front on Bellegrove Road in Welling, Kent, is the kind of dealership one might have expected to vanish from the landscape.

But it has refused to adhere to the received wisdom of the independent dealer market, and branch out drastically. It has remained true to its original dealer code.

And it has succeeded – proof is the very fact it is still in business, despite the massive disruptive changes in the dealer market.

Nokia, by appointing it one of only four accredited service points in Kent, recognises its specific expertise.

Consolidation of the dealer market has been intense recently, with many independent retailers with similar business profiles to The Phone Shop selling up or going out of business.

Even significant dealer chains such as JAG and Fonehouse have been forced to overhaul their retail strategies, reducing exposure to risk on their own store estates by developing franchise schemes with decent dealer partners.

Constantly, in these pages, industry luminaries have instructed the old-school dealer market to get real; to shed its skin and to emerge again as a forward-looking, multi-skilled community hawking a wide range of communications tools.

Shut up shop, set up an office, work out fixed line and IT and go sell to businesses. Or face the scrapheap. That appears to be the message for the disenfranchised old dealer sector.

But there is a hardcore of old-world retailers out there, defying this new-world advice to go on with their chosen topic: consumer mobile retail. They know their trade and their essential community market extraordinarily well, and are resourceful and wily enough to maintain the business and lifestyle they have always enjoyed in this market.

Step forward Adrian Foot, proprietor of The Phone Shop, as an example of this kind of bloody-minded longevity. Foot claims to have adapted to the market during the past five years only within the strict confines of straight mobile retail.

Ultimately, he has refused to change the habit of a career-time and step beyond that. The store essentially looks the same as it always has, despite the ever-changing window and POS offers: same wall-to-wall racks, same long glass display counter, no discernible web presence.

Locals know its staff by name; the girls from the tanning salon a couple of doors down, the Tesco staff across the road.

“You know, this market has changed a huge amount during the past five years. And dealers have either evolved with it or gone from it. So much share in terms of sales has now gone to the high street and the internet. Independent dealers have been forced to change their focus,” he explains.

“And we have done that, and turned away from sales to an extent to concentrate on service in the local community and within the Kent region. But, at the same time, we have not turned our back on what we started in this market to do. We haven’t got into fixed line, or laptops or any of that kind of thing.

“We haven’t started selling business connections particularly. We are focusing on a full service around fundamental mobile phone services. Like we always have done.”

Which means The Phone Shop now takes its money from contract and prepay sales, alongside a steady line in accessories and an expanding business in repairs, installations and telematics.

When Foot set up in 2000, to run an old Welling One2One shop as an independent mobile retailer, the networks were still in land-grab mode and the advent of prepay saw huge returns for all channels.

“There was no such thing as repairs. The networks and distributors gave us the kit and requested we connect it in return for a commission payment. But that connections side of the business has got a lot quieter, all round,” he says.

Five years ago, 70 per cent of The Phone Shop’s turnover came from sales (contract, prepay, SIM-free, accessories) and the remainder from service and assorted other consumer offers.

Nowadays, the mix has altered: 40 per cent comes from sales (including an ongoing chunk from the original One2One/T-Mobile base), 40 per cent from service (repairs) and the rest from sundries (car fit-outs, mapping solutions).

But Foot claims turnover and profitability have remained steady in the past five years (though he won’t give figures for either). He denies also he has ever thought to sell up and get out, like his old partners Mehmet Mustafa (whom he bought out in 2007) and Matt Chambers (who left Welling to set up The Phone Chamber in Edenbridge in 2005, only to quit the industry last year).

Foot is now running the business he bought on his own, supported by two full-time sales staff, a part-timer and two engineers, along with regular contractors for car-kit installations and telematics.

And his adaptability within this consumer retail framework has kept sales ticking over. Foot refreshes his airtime offers, his repair rates, his window displays and his stock every week. “You have got to keep an eye on the market. We’re working harder for the same money, and chasing every deal,” he explains.

Foot still flies out to trade fair CeBIT in Germany each year to source new kit from new international suppliers and wholesalers.

The Phone Shop is something of a destination store in Kent and South East London for accessories in particular, he suggests. It has a pretty idiosyncratic range: carry cases, car chargers, handsfree kits, headphones, headsets, memory cards, batteries, screen protectors, data cables, lanyards, styluses, speakers.

It mixes the market stall with the high street, and somehow still stocks a broader, more multicoloured range.

Its SIM-free stock is impressive too. Foot is buying in Apple iPhones, and has done for some time; another sign of that resourcefulness common among the traditional dealer set, when Apple’s UK distribution has been so restricted to date. Better flow of iPhone stock from O2 should come down to him from Avenir and HSC now, remarks Foot, as O2 and Apple have broadened their selected channels.

The Phone Shop has always found a market for super high-end ‘bling’ handsets too (Vertu models, Nokia 8800 Sirocco series phones), although Foot says demand has fallen away with the economy.

The price threshold on SIM-free kit has come down, he says. Curious budget phones, odd-shaped devices from the Far East and antiquated old kit are also stocked alongside models one would find on the high street.

“There is still a market for those handsets that go back 10 years; an older generation likes them, they still work and they want them supported with service and a range of accessories. The high street doesn’t do that. Part and parcel of being a mobile retailer is being able to support the product through its life, and it’s a vast and ever-changing market,” explains Foot.

“Yes, they’ll go to Bluewater and Lakeside now, but sometimes stock is not available in those stores and mostly the service is questionable. I mystery shop the high street all the time, and there’s nothing really they’re offering we can’t match. We’re putting together deals no one else can do; working the commercials so we can.”

He has kind words for Avenir and HSC, through which it connects O2, Orange, T-Mobile and 3 variously. “The distributors, and those two especially, offer incredible support. It used to be the networks that worked more closely with us; now distribution is providing that guidance.”

Indeed, The Phone Shop does not really have the kind of profile most networks are publicly courting; it is the kind of outlet dismissively referred to by networks as a ‘stockist’ when they periodically explain their divide-and-conquer strategies in the independent channel.

But Foot, Welling stalwart for 19 years, has little time for such definitions. Afterall, it is doing a better job than either the network retailers or the big-chain independents at serving his local community, he argues.

It is offering Lycamobile and Lebara Mobile ethnic market SIM cards, Spanish and French prepay SIMs for travellers, rare language adaptations for handset software; basically what their local market wants. The biggest boon for The Phone Shop in the face of sliding sales has been its service offering, principally its repair centre, recently accredited by Nokia.

It became an approved Nokia Care Point in December last year, enabling it to cover every aspect of warranty repairs for the handset manufacturer.

Foot suggests reputation, word of mouth and local marketing has made The Phone Shop a prime destination for Nokia repairs in Kent and southeast London – even with other Kent Care Points at Bluewater, Canterbury (both Carphone Warehouse outlets) and Ashford. The new accreditation consolidates that.

“We already had the foot flow, and the enquiries for Nokia servicing. It was a no-brainer; something that could work here,” explains Foot.

“We pride ourselves on a very high level of service for our customers and we can reflect that for Nokia. We have a huge focus on repairs; that’s where we stand out among mobile retailers. We do what the bigger players are unable to do.”

Most repairs are done in-house, with only major renovations returned to Nokia itself.

Foot suggests most manufacturers can be frustrating in the time they take to repair certain handsets and the quality of the fix when they do. But Nokia does well in this regard; Foot reckons, unsurprisingly, rival firms would do well to ape its service operation.

“There are particular handsets that always come up, with all manufacturers. But Nokia’s system works. It has set up a total service solution, so we offer a top-end, walk-in service. The customer’s handset is repaired or replaced; that’s the guarantee through Nokia and ourselves,” he says.

“The formula Nokia has worked out puts it above its competitors. The need for a walk-in service is paramount. Customers travel to drop-zones like ours, and that leads to referrals and new footfall for us. Other manufacturers could benefit from the dealer channel in the same way.”

That independent resourcefulness has been called upon in Foot’s thriving repairs operation too.

Phones are increasingly complicated, with feature-packed devices creeping down into mass-market and prepay portfolios and smartphone pyrotechnics coming of age. Repairs have become more complicated, accordingly, and parts harder to source.

“Some parts for certain handsets can be difficult to get your hands on,” observes Foot. “With the technology now embedded in these phones, they can perform so many jobs and so much more can go wrong with them. The way they’re screwed together is different.

“We have several outlets we source from, so we can cover pretty much any part at any time. And Nokia is good anyway, and supports us well. The accreditation means we can order quickly and efficiently.”

After almost two decades on a shabby Kent high street, adapting only according to its own community ethos and not neccessarily to what the market advises, the Nokia Care Point accreditation is deserved recognition for The Phone Shop.

But Foot remains cautious, even if he allows himself a certain confidence.

“Honestly, we all have to be careful. The economic climate is difficult, and the market has changed massively too. You can’t be frivolous – everyone is pulling their horns in and riding the storm. But we are profitable, and resourceful and we are doing okay,” he says.

Which in backwoods independent consumer retail is really some going.

This article appeared in Mobile News issue 445 (August 10, 2009).

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