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Understanding the transformation of telecom stores: 4 key aspects

By Ana Izquierdo — May 28, 2024

It is essential to develop comprehensive sales and service spaces that enhance efficiency and customer-brand interaction

Telecommunications operators’ stores are becoming popular again, and the reason is straightforward: it’s the channel where customer interaction is most enriching. Communication occurs between individuals in an open and less restricted context compared to other channels.

In other words, it’s the channel where customers can physically and verbally connect with telco operators through store salespeople. It is also a means for operators to better understand their customers. This includes learning what motivates them to visit the store, what activities they engage in, which devices they try out, and how they generally feel about the service.

The store as brand identity

Traditionally, telecom operators have developed their stores with two major, yet not always aligned, objectives in mind:

  • Efficiency: adhering to the maxim “the less time a customer spends in the store, the better the service,” operators have aimed to maximize sales productivity by simplifying processes. They’ve even reduced the scope of activities performed in stores, directing queries outside this scope to other, generally digital, channels.

  • Engagement: based on the idea “the more time a customer spends in the store, the better the service,” operators with this strategy aim to make their stores the primary channel not just for sales but also for service. They strive to make their stores a convenient place for customers. This approach is predominantly adopted by operators with local or regional presence.

Currently, the trend all operators are following is to merge these objectives: to maximize productivity by simplifying and digitizing in-store operations, and to strengthen customer relations by making the store a comprehensive sales and service space.

This new trend primarily aims to transform stores into spaces where the brand’s identity is better perceived by customers: "Customers visit stores because they identify with the brand and its values and because they want to be part of a community," according to the Telco Retail Strategy Report 2022 by NTS Retail.

The transformation of retail

The renewed importance of stores in the commercial strategy of telecommunications operators coincides with a global transformation of retail channels across all industries. These industries are experimenting with new models of relationships between brands and their customers in physical spaces.

This transformation of the retail channel revolves around four major areas:

Esta transformación del canal retail se estructura en torno a cuatro grandes áreas:

  1. Convergence of online and offline channels.

  2. The in-store customer experience provides real value.

  3. Store advisors are key to transformation.

  4. Technology as an enabler of transformation.

1. Convergence of online and offline channels

According to a 2022 Salesforce survey, nearly 40 % of customers still prefer physical stores for contracting telecommunications services, only surpassed by online channels. However, in practice, the effective contracting rate in stores remains lower compared to other channels such as telephone.

The retail sector has been experimenting with omnichannel models for years, providing a seamless customer experience that facilitates the purchase and return of products across any channel (physical or online) with simple and intuitive processes.

These experiences serve as inspiration for the telco sector, where omnichannel customer management still faces certain challenges (partly due to the traditional vertical management of sales and service channels), but significant efforts are being made to overcome these. Optimizing strategies that enhance the productivity of sales channels is key to maximizing performance and increasing the company's overall sales.

2. The in-store customer experience provides real value

Customers who visit a store, in any industry, expect to gain more than they could through remote channels. Whether it's trying on an article of clothing, playing around with a mobile phone's camera, feeling how they sit in a car, or getting advice on the latest features of any appliance or device, stores provide that unique space where one can directly experience a brand's products and services.

In Spain, telecommunications stores experienced a particular boom during the years of growth in mobile services, while the strategy of subsidizing handsets was maintained. The reason is clear: customers were not contracting a mobile service with the operator, but rather purchasing a mobile handset tied to a rate plan. And what better place to make such purchases than where you could compare different mobile phones: the stores.

Today, the acquisition of mobile devices is no longer so closely linked to the contracting of the service. However, telco operators still derive a relatively significant source of revenue from the sale of devices (such as mobile phones, tablets, TVs, among others) and they also offer many other services that customers can learn about in stores better than through other channels. For example, mobile insurances, general insurances, alarms, MultiSIM...

The challenge lies in transforming telco stores not only into contracting offices for those who already know what they are looking for but also into unique spaces for customer relations with the operator, where comprehensive attention can be provided for everything related to their digital and home environment.

3. Store advisors are key to transformation

In a context of growing complexity in the catalog of products and services offered by telecom operators, and where stores are increasingly becoming spaces not only for sales but also for comprehensive service, store advisors face the significant challenge of providing each customer with the appropriate response.

But is it possible to provide an adequate response considering not only the complexity of the offerings and services but also the speed at which they change?

Indeed, we might say that this is where telcos face their primary challenge in transforming stores: talent.

Some questions that telecommunications operators need to address to ensure that store advisors are the sales and service channel that truly connects with customers are as follows:

  • Are the processes in store efficient? Do store advisors have agile and useful tools to handle what is asked of them? Digitization of in-store operations is still a pending task for some operators and, unfortunately, there are customers who complain that activating a line can take about an hour of in-person waiting.

  • Are the compensation and incentive models for store advisors aligned with the operator's objectives? What do the turnover rates of store staff indicate? If store advisors truly are key to transforming customer relationships—since they facilitate the sale of new services and strengthen the customer's connection with the operator—the objectives must be reflected in the compensation models. Traditionally linked to commercial objectives, these models need to incorporate variables that measure the extent to which advisors enhance customer engagement. Some operators are advancing these models by including variables like churn, in-store and global NPS, etc. However, there is still a way to go to ensure models that bind teams while ensuring the sustainability of the stores.

  • What do advisors need to provide comprehensive in-store service? There is no single answer to this, but solutions involving analytics and artificial intelligence are beginning to be tested to assist agents in conversations with customers, simplifying access to the necessary information to provide the most appropriate response. In the coming months, we will see how some of these solutions start to appear in stores, aiming to forever eliminate the response, "I can't do or resolve this in the store, but they will solve it for you through this number."

4. Technology as an enabler of transformation

There are numerous technologies (such as process digitization, retail analytics, generative AI for customer service, IoT, dynamic signage, and speech analytics) that enable the transformation of the in-store service and sales model.

Operators are progressing in incorporating these technologies based on their priorities and the current stage of their business: efficiency, new sales, cross-selling, selling value-added services, customer service, and experience, etc.

Although there is no common pattern, we can highlight the three initiatives with the highest priority for improving the customer experience in stores (according to the NTS Retail report):

  1. Speeding up sales and the checkout process.

  2. Assisting store advisors in customer service with digital sales technology.

  3. Capturing more customer information in the store to enhance their experience.

A significant challenge for a valuable transformation

From this point, the variety of solutions and technologies available to address these challenges is vast. It is at this juncture that operators must be very selective: they need to understand which use case they aim to resolve, and design which combination of technologies is most appropriate.

Ana Izquierdo
Ana Izquierdo

Manager of the Customer Business Unit

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