By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Wireless Zone, the 309-store wireless-retail franchisor, expects to break sales and profit records this year by aggressively expanding into new geographic markets, rolling out a new interactive store design that groups handsets by customer type, and launching a variety of other initiatives.
Those initiatives include the rollout of digital signage, capable of promoting a new carrier program as soon as it’s launched, and a branding effort that reinforces the Wireless Zone name so consumers don’t confuse franchised stores with Verizon-owned stores.
Wireless Zone, the largest Verizon Wireless agent by store count, is one of only two wireless-retail franchise operations in the country. The other, Wireless Toyz, sells multiple carriers’ services, but Wireless Zone remains a Verizon-exclusive agent, in large part because multi-carrier agents generally don’t receive residual payments from carriers. “We can’t have two wives,” said COO/executive VP Mark Asnes.
Founded in 1988 as the Car Phone Store, Wireless Zone posted record sales and profits in 2008, Asnes said. In its 21st year, the company will break records once again, he promised. In 2008, revenues grew 22 percent to $201 million, and the number of phones sold grew 13 percent to 400,000. The company projected revenues to grow this year to $240 million.
Revenue growth is coming from a combination of existing-store sales gains and new-store openings, Asnes said. In 2007, the company opened the same number of storefronts that it closed, keeping the store count flat at about 268 but generating more business through better locations, he said. In 2008, the company opened 58 new locations and closed 20 for a net gain of 38, ending the year with about 298 storefronts.
In 2009, the company is targeting a year-end store count of 400. Many of the new stores will open in rural areas, Asnes said. “Rural America in 'A’ locations is a definite focus for us, but not an exclusive focus,” Asnes said. “[Carriers’] corporate stores have overlooked these areas.”
Verizon corporate stores and other Verizon agents, Asnes stressed, are Wireless Zone’s main competition. All are targeting the same service-oriented customer, whereas customers of mass retailers such as Best Buy and Wal-Mart “are not looking for a lot of service,” he claimed.
The rural focus started about two years ago, and about 25 percent or 30 percent of franchise stores are in rural areas, he noted.
Most of the new stores, Asnes added, will open in areas outside the company’s Northeast stronghold, where 215 Wireless Zone stores currently operate. In recent years, the company moved aggressively into Verizon’s Midwest and South regions, making it the only Verizon agent operating in three of the carrier’s four regions. This year, the franchisor vows to enter Verizon’s fourth region, the western U.S.
Given the proliferation of mom-and-pop agents throughout the nation, Wireless Zone expects to grow in large part by converting existing agents to franchise operations. “As carriers consolidate, so will agents,” Asnes said. “Small agents will go out of business or work with us.” Struggling agents, whether offering Verizon or other-brand service, will also look to Wireless Zone to leverage the company’s brand name, buying power, advertising expertise, training staff, retail-operations advice, planogram expertise and advertising support, including direct-mail and TV ad production, he said.
Wireless agents that deal with carriers through master agents get little of this support, he said. “Master agents don’t offer a system. They just facilitate activations through a carrier.”
Store design is another service that Wireless Zone offers to franchisees, and the company is rolling out a fourth-generation design already installed in eight stores. (See below.)
The new store design reinforces a branding initiative undertaken more than a year ago to ensure consumers leave a store knowing it’s a Wireless Zone store, not a Verizon Wireless corporate store, Asnes said. “We have a 20-year-old brand, and we want to build our future.”
With differentiation in mind, the company in the past 12 months removed Verizon Wireless light-box panels from in-store displays, pays for Wireless Zone shopping bags instead of using free Verizon bags supplied by the carrier, prints the Wireless Zone name on receipts, and provides logo shirts that say “Wireless Zone, Verizon Wireless Premier Dealer.” Shirts previously carried only the Verizon name.
New stores use less of the black and red colors associated with Verizon’s logo, and almost every display lacks the Verizon name, Asnes added. The Verizon name, however, still appears along with the Wireless Zone name on store exteriors.
In other brand-building initiatives, the company is offering a TV ad for placement by franchisees in local cable-TV markets. The theme is: “Everything you get at a Verizon Wireless store, plus me.” Local cable operators videotape the store owner or a Wireless Zone actor reading from a supplied script. The cable company also tapes the store exterior.
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