Selling Smartphones: Youth Lead the Multi-Channel Retail Experience

“Every sofa, bus, train is a shop front as people are looking at their phones.”
- CEO of mobile phone retailer, Carphone Warehouse, Andrew Harrison

The future customer journey will be defined by how youth interact with retail today. If retailers want to remain relevant in a multi-channel world, they need to engage these change agents.

Retail: it’s not just about the store anymore.

The store is a pitstop in the customer’s journey. The modern customer’s journey isn’t linear like it used to be. Rather than a journey punctuated by a definable end-point, it’s a process involving multiple consultations with peers and online reviews. Youth are calling their peers for advice and checking video reviews on their smartphones while in store. Retailers need to build around youth behavior and redefine how they deliver this experience.

Meeting customer expectations is no longer enough

People don’t buy alone: shopping is a social process.

Churn, brand and purchase decisions don’t happen in isolation but as the result of long term consultation and influence. 66% of youth purchase handsets based on what their peers not what brands or ad agencies said (source The Mobile Youth Report). 58% of youth call friends or family to consult about their purchase (source Pew). The end-to-end retail experience plays a crucial role in defining which brands youth recommend and ultimately buy.

Youth are the key market influencers, shaping demand for new handsets across all markets but winning youth means going beyond store displays, promotions and advertising. What youth seek today is a retail experience that exceeds expectations.

The difference in satisfaction levels between the best and worst retailers according to the ACSI is only a factor of 20% (between Nordstrom & Walmart). Whereas the difference in recommendation between the best and worst retailers based on NPS data is a factor of 300%. Amazon’s ranks #1 in terms of customer experience and NPS because it doesn’t focus on meeting expectations and satisfying customers but in delivering an experience that exceeds both and drives recommendation.

Going Multi-channel

Retailers need to redefine their offering from being a destination for the purchase process to being a partner that supports it.

Retailers need to provide a seamless multichannel experience that connects the online and offline journey. Data shows that only 13% of mobile phones are sold online, whereas 70% of purchases began online (source Carphone Warehouse). Data from the 2013 Mobile Youth Report shows that 65% of the purchases that started online began on a smartphone. Half of all searches for the iPhone 5 on the CPW site, for example, were made from the mobile phone.

This means that online retail isn’t about selling phones but about curating the customer journey. While 4 mobile phones are sold in the high street for every 1 sold online, offline sales are heavily dependent on the online component.

Traditional offline retailers face a significant online challenge from 2 areas:

Showrooming:
The growth in customer showrooming behavior popular with youth shows that retailers not geared towards a multi-channel delivery end up becoming the physical front end for online competitors. Youth often research products in store before taking purchases online, both to check product reviews and to compare prices. According to latest data from Pew Research, 50% youth match prices online and 56% look up reviews on their mobile phone while in store compared to 27% and 26% respectively for older customers.

Upstart Advantage:
New entrants have been able to redefine retail from the bottom up to better suit the modern customer. Retailers geared towards multi-channel delivery, like Apple, are able to turn showrooms into a positive brand experience and a generator of both recommendation and revenue. Some retailers have improved their customer engagement practices, increasing showrooming and in-store purchases. In recent ACSI surveys, Apple ranked #2 (behind Amazon) in terms of customer satisfaction. Apple’s ability to re-engineer retail beyond traditional confines has enabled it to become the most profitable retailer per square foot in the US ($6000/sqft vs $3000 next placed retailer Tiffanys). Apple understands that retail isn’t just about selling boxes but supporting the customer in the discovery and education process.

“There’s no better place to discover, explore and learn about our products than in retail. It’s the retail experience where you walk in and you instantly realize this store is not here for the purpose of selling. It’s here for the purpose of serving. I’m not even sure “store” is the right word anymore. They’ve taken on a role much broader than that. They are the face of Apple for almost all of our customers.” – Tim Cook, Apple CEO

The Mobile Youth Book"A compelling exploration of how the mobile youth culture revolution is driving our increasingly social and mobile future" - Derek Baird, Director Product Development, Disney"This book offers instant texture to anyone confused by the core technology driver" - Edward O'Meara, SVP Wunderman"What makes this book such a great read is that’s it’s written as a narrative in the life of different young people around the world" - Marc Kornberger, CEO Student Village* Kindle/iPad version from Amazon * Paperback from Amazon * PDF download online
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About Graham Brown

Co-founder of mobileYouth. Cultural explorer, ethnographer and digital anthropologist. Author of The annual mobileYouth report and books The Mobile Youth: Voices of the Mobile Generation, All is Social, The Youth Marketing Handbook, Fans and Youth Marketing 101.

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