Gloom lifts from high street

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Encouraging footfall and sales figures at the end of June and through July indicate the worst of the recession on the high street is over, claim those at the coalface.

Revenue and profitability has fallen for most network operators through 2009, as shoppers have ultimately voted with their feet and stayed home. The pricing pressure on voice, and the innovative value bundles that have launched to spur reluctant shoppers have, for most, impacted margins too.

But staff on the frontline of retail say footfall in July was at its highest point so far this year. They argue it is a sign that sales will pick up throughout the rest of the year.

But why? Clearly, there is some marginal relaxation around consumer spending, particularly on essential items such as mobile phones. But, principally, those handling the goods suggest the availability of new products and services has woken the sleeping consumer public.

For Carphone Warehouse, staff claim the increase in customer numbers has been driven by its reappointment as a Vodafone new-contract connector as well as a continuing flurry of mass-market and high-end handset exclusives.

Carphone staff in London suggest footfall has increased by more than 10 per cent since the beginning of the year – from an average of 1,800 customers per large store per week to 2,000.

One staffer says: “Footfall has increased and is back to the seasonal norm after the big drop at the beginning of the year.”

The Vodafone contract deal has been key. “There’s more network choice now, and it tells. Vodafone presents another option,” said one.

“It has helped Carphone’s reputation too,” said another. “It was hard to claim impartiality when we couldn’t sell new Vodafone contracts. It has definitely encouraged customers to come to us.”

Carphone’s broader product range, particularly in its ‘wireless world’ stores, has encouraged sales during the recession.

“We’re getting more customers now because we’re not just selling one type of communication product. Word of mouth has helped build public awareness that we no longer only sell mobiles, and the message is clear from our POS that we have a lot more to offer now,” says one staffer.

“It may have taken some time for word to get round, but the message is clear now which has led to more people coming in to the stores and asking for something other than mobiles.”

Staff at all mass mobile retailers suggest handset exclusivity has been a boon in hard times. Launches of the Apple iPhone 3G S at O2 and Carphone, the Nokia N97 at Phones 4U and the Samsung i8910 HD at Orange have guaranteed some swift business.

In contrast, T-Mobile staff suggest the lack of any real exclusive since HTC’s G1 last year has cost it.

The launch of the iPhone 3G S on June 19 saw customer numbers spike, and the momentum since has been good.

“Customers don’t walk in to a mobile shop to browse generally; they know what they’re looking for and want to buy right away. When a high-end phone like the iPhone 3G S gets a lot of publicity, footfall increases exceptionally,” remarks one Carphone sales assistant.

“My store’s footfall increased from an average of 150 customers to 210 on the launch day and for the few days after.”

O2 head of retail Richard Baylis says: “Footfall across our retail estate is very encouraging in relation to industry trends. We are clearly outperforming our competitors once again.”

Phones 4U’s Nokia N97 white exclusivity has also spurred footfall, claim store staff. “Yes, [the Nokia N97] is a big handset for us and has driven customers into stores,” says one Phones 4U staffer.

“In our region, footfall increased from a daily average of 200 to around 280 per store last month.”

A Phones 4U spokesperson adds: “July was a very successful month for the business, possibly driven by the Nokia N97 and the Samsung Pixon12, as well as our ‘Great Deals 4 Popular People’ brand campaign.”

T-Mobile staffers generally bemoan the lack of exclusives that have arrived in stores since HTC’s G1 ‘Google’ phone last year. The G2 has only just launched and is a rebadged ‘Hero’, available on Orange and on any network in various colour variants via Carphone.

And T-Mobile’s new drive on margins will likely see staff wait a long time for anything really exclusive.

Full article in Mobile News issue 446 (August 14, 2009).

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