Change or Perish… Retail Transformation is Critical for the Future
“When you’re finished changing, you’re finished.” American Statesman and Author Benjamin Franklin
Remember when customers had to come into the phone company to make an international call or when there were two television channels, and you had to go to a mail box or post office to send mail? Today, can you imagine getting through the day without the convenience and security of a mobile phone in your pocket? (Remember when it was too clunky to fit in your pocket?)
Over the last 134 years, telephone customers have enjoyed huge, fantastic changes – ranging from unimagined new services and products to lower costs and faster, more convenient service – all the result of ongoing vast investments in new infrastructure and a willingness to boldly embrace new technologies and new business models that better fit the growing and changing needs of customers.
Today, TSTT is in the midst of another major change – a digital transformation that it must make to better serve its customers who demand the same quality, variety and speed of service enjoyed by countries such as the United States, Germany, Singapore and China.
A key element of this Digital Transformation is a Retail Transformation that we are confident will be a win-win-win-win for everyone: customers, employees, business partners, taxpayers.
70% of the customers who leave their homes and offices to line up in a TSTT store come to pay a bill or make a bill-related enquiry. They don’t want to be there but feel they have no choice. Our Retail Transformation now provides them with many secure, convenient payment options – from our enhanced online portal to an expanded bill payment network that includes banks, Sure Pay agents and our dealer network – altogether more than 100 bill-payment centres.
With that network in place and operating effectively, TSTT will be closing all its retail stores in Trinidad, while our retail store at Gulf City Mall in Lowlands, Tobago will continue to operate.
Any change comes with some costs and creates some concern, but once employees and customers take stock they will see that:
- no-one is being sent home (all employees will be reassigned to more rewarding jobs within TSTT)
- there are more bmobile outlets than ever before – 85-plus Channel partner locations nationwide
- TSTT has made tremendous savings from closing these expensive stores
- these savings will be channelled into expanding and upgrading our products and services and ensuring TSTT’s longevity and profitability for employees.
International Telecom Trends
Being an agile, low cost operator is essential to survival in today’s competitive telecommunications industry. With the store closures, TSTT will save millions of dollars every month that can be channelled into keeping rates competitive while offering the latest technology and fastest speeds.
According to a PriceWaterhouseCoopers’ report entitled 2017 Telecommunications Trends: “Average revenue per user in the telecom industry is falling in virtually every region,” from the United States, to the Middle East, to Western Europe.
One key finding of a 2017 strategy report entitled “End of the Local Telecom Store? Not so Fast…,” from consulting firm Accenture, is that retail stores should enable, not drive, a business model. As telecommunications companies seek the right physical/digital mix, Accenture advises: “The funds for change are already in-house. Rationalising their existing retail portfolio – downsizing formats as necessary and closing outdated retail outlets – frees dollars to invest in a more integrated digital/physical model. Also, digitally-enabled stores are vastly more efficient than traditional ones, freeing up funds to reinvest for the future.”
It adds that where a purchase occurs becomes less and less important as the physical and digital worlds meld into an integrated, seamless network of channels. Referencing Nespresso, Accenture also noted: “When Communication Services Providers (CSPs) merge their digital and physical worlds, they also create a more flexible workforce. A Nespresso coffee specialist could work in a store, via the online platform or in a call centre. And theoretically, most could be moved per fluctuations in demand among the platforms. As customer needs shift, having the agility to shift workers accordingly becomes key.”
Global Business Trend
The closure of TSTT’s big retail stores are also part of a wider business phenomenon taking place internationally. In a March 2017 article, a Forbes magazine headline said: “These 21 Retailers Are Closing 3,591 Stores — Who Is Next?”
The US retailers included KMart, Macy’s, Sears, Payless and Radio Shack. “We have now come to the point in the retail cycle where unproductive stores can no longer be carried on the books of good operating companies,” the article said.
In Britain, The Independent reported in April 2017 that a total of 896 stores disappeared from Great Britain’s town centres in 2016
The expansion of its franchise network is another international trend that makes sense for TSTT. Customers who prefer to shop or browse products in a physical location rather than online want to do so according to their individual preferences and convenience. TSTT’s franchise network supports just that. The variety of stores in our network provides customers many options from which to select the type of experience preferred – for example, quick, no-frills, just pay my bill; or high tech, leisurely, with a great range of phones and accessories.
According to IT consulting firm Capgemini’s Kees Jacobs, Consumer Goods & Retail Lead, Insights & Data Global Practice: “Brick and mortar stores of the future will need to be very different if they are to give consumers a reason to leave their computer, abandon their dishes and visit.” . However, Capgemini also notes: “It’s not all doom and gloom for physical retailers. Consumers believe that stores still have a role in their lives – 70 percent still want to touch and feel products before they buy. However, they not only expect to see the same features that they find online implemented in-store, but also want more incentives.”
Business consulting firm McKinsey also noted in a September 2014 article: “The retailers who thrive in the next decade will be those that reimagine and redefine their stores for the digital age. Brick and mortar retailers have enormous opportunity to leverage the distinct benefits of old fashioned, in-person shopping in ways that digital sites can only dream about. Tomorrow’s winners will be those who are able to transport the digital world into their stores in a manner that delights customers, builds loyalty and generates brand value.”
This poses fantastic opportunities for our franchise partners. As market research and consulting firm Ovum notes in a June 2016 article entitled: “Telco Retail Store Transformation Strategies,” Telco retail stores are here to stay and remain the top location where consumers transact with telcos, despite the trend toward online stores and self-service channels. “The key reason is that customers need a lot of hand-holding to understand telco products and services, get service, and get technical support. All of that is best done in store by trained staff,” the article said.
However, it also noted, there is no one-size-fits-all retail store strategy.
“The choice between self-owned retail stores and third-party-operated stores is highly dependent on telcos’ corporate strategy and local market dynamics. Telcos that want direct control of the customer experience favour self-owned stores, while those focused on retail footprint growth favour third-party stores for cost efficiency and rollout speed.”
For those who do not want to trek to a store or office, TSTT customers also have the option of using the company’s enhanced e-portal, b-online, to conduct all their transactions and queries. According to a 2015 McKinsey Benchmarking Study of 80 telecommunications companies worldwide, the top-performing telecom companies use automated order-management systems to link everything from the initial capture and validation of service requests to fraud checks, payment authorisations, billing, and customer communications quickly and cost-effectively; and many telecom companies, for example, have introduced full-service smartphone apps.
As for one of the most tech savvy populations in the world, Digital Commerce 360 reports that according to China’s National Bureau of Statistics, Chinese shoppers make one-eighth of their retail purchases of tangible goods via the web, with online retail sales in China reaching US$752 billion in 2016. This compares to US online sales of US$394.86 billion in 2016.
TSTT is changing to serve its customers better, respond to industry and market trends more quickly and stay profitable. It is heeding the insights of some of the best analysts in the business and securing its future for customers, employees, taxpayers and business partners.
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