Orange boosts retail network against trend of consumers buying mobile phones online

LONDON - Customers are shunning high-street mobile deals in favour of competitive internet offers, with in-store sales dropping by 50% in the first quarter of this year, according to research by GfK NOP.

The shift comes as mobile operator Orange presses ahead with plans to expand its high-street offering with the opening of 60 additional stores over the next year. Earlier this year, it said it would back the expansion with an increased emphasis on customer service, which it hopes will boost in-store sales. By contrast, other retailers and operators are reining in store expansion plans.

David J Smith, head of operations at ecommerce industry group IMRG, believes that consumers in the mobile and electronics sector are using stores in a different way as they consider purchases. 'Customers will often research a deal or product online, then go into the store to discuss or look at it before buying online,' he says.

Mobile operators such as 3 UK, O2, Vodafone and Orange have begun offering web-exclusive deals in an attempt to tap into this sales trend. 'It is cheaper to do business online than through our retail stores, so we are able to offer more competitive deals to our customers online,' said an O2 spokeswoman.

Many are also tying packages together with mid-range mobile phones, which have proved more popular than high-end products in recent months.

GfK NOP attributed the changes to increased consumer confidence in online shopping, and a growing propensity to hunt out deals arising as a result of the credit crunch. It also said that the rising cost of petrol was prompting shoppers to shop online thus avoiding any expense incurred by travelling to operators' high-street stores.

SIM-only contracts and upgrade deals with discounted line rental have boosted the share of sales made on the internet, too.

Networks are also increasing their focus on upgrade deals offered by call-centre reps to capitalise on a rise in the number of consumers changing mobile contracts over the phone.

With few opportunities for networks to differentiate their offerings, customer service via call centres has become a key focus in the battle to retain customers.

Mobile operator market

  • O2 gained 275,000 customers between April and June, giving it a total of 18.7m, boosted by an unprecedented demand for Apple's iPhone in its outlets last month.
  • Orange increased its contract customer base by 13% to reach 5.8m in the first half of this year. Its total customer base was up to 15.7m.
  • Vodafone has lost 27,000 UK customers from its 18.5m base this year. About 8% of its customers worldwide are accounted for by the UK. It has been placing greater emphasis on its web-only deals this summer.
  • T-Mobile UK added 37,000 contract customers and shed 554,000 pre-pay customers in the first half of the year. It's UK customer base, including Virgin Mobile customers, now stands at 167,940.
  • Source: O2, Orange, Vodafone, T-Mobile

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer