CTIA Panel Sees Adversarial Relationships Waning

CTOA 2013 Las Vegas — Relations between wireless carriers, retailers and handset vendors have been adversarial for a long time, but that’s changing.
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Las Vegas — Relations between wireless carriers, retailers and handset vendors have been adversarial for a long time, but that’s changing.

That was one of the themes emerging from a panel discussion at the CTIA convention on the challenges and opportunities facing wireless retailing and the consumer buying experience.

The participants in the discussion represented different points in the industry’s supply chain, including RadioShack, Walmart, T-Mobile and Samsung. The moderator was David Sprosty, a retail consultant who was Best Buy Mobile’s CEO and chief executive of Sytemax’s North American retail business.

The executives also discussed such topics as how retailers can remain profitable despite churn, charge-backs and organized fraud rings, and how the industry can combat buyer remorse in the face of a wide array of handset and service-plan choices.

In discussing relationships between carriers, retailers and vendors, RadioShack wireless VP Tony Andrews pointed out that “for so long,” relationships among the three players “have been adversarial in many ways.”

Walmart VP Mehrdad Akbar noted that, historically, carriers went to retailers and said, “Here’s the plan and the phone.” That approach, however, doesn’t work with retailers with the scale of a Walmart, he said. Today, however, retailers, carriers and vendors are collaborating more to understand one another’s pain points, he said. Relations “are much better compared to a few years ago.”

 For his part, Sprosty said he has seen “a lot of positive changes” since the time six or seven years ago when he debated a carrier over who owns the customer. He also remembers when carriers would not let retailers see handsets a few months in advance of when they would go on sale.

As for carrier-vendor relationships, the interests of the two parties still diverge somewhat, said T-Mobile USA senior VP Doug Chartier. Handset vendors make their money when a handset is sold, but “carriers make money over time,” he said. Carriers are therefore focused on giving consumers the product that’s right for them so the customer sticks with the carrier, he said.

However, Samsung national retail VP Daniel Liberman contended that for vendors, it is also “extremely important that the customer has a great experience over the life of the device.” The goals of all three parties in a cellular transaction “don’t need to be different,” he said.

 Akbar agreed. “This has to be about the customer,” he said. “We measure our success not with the transaction but with the customer loyalty” so that customers become Walmart advocates, he explained.

All three parties, Sprosty said, are having a “healthy dialogue” to improve the customer experience by selling the right product and right service plan to a consumer to reduce buyer’s remorse. This in turn helps carriers reduce churn and retailers to suffer fewer profit-robbing charge-backs.

Sometimes, “we encourage people to drive a Rolls Royce when they should be driving Minis,” said RadioShack’s Andrews. But helping consumers choose the right devices and plans, and supporting customers after the sale, will help devices stick, he said. RadioShack, he pointed out after the discussion, offers 24/7 call-center and online customer support.

With the rise of smartphones, Andrews said, “our cost of goods effectively doubled,” so making devices stick is critical to avoiding churn-induced charge-backs.

Retailers and carriers can help reduce customer remorse by “making it simple to research online,” Chartier said. That will help consumers “do a lot of prequalifying on their own.” Seventy-five to 80 percent of buyers go online first to do research before coming into a store, he noted.

In other comments, Chartier said the industry should prepare for “big changes in the MVNO space.” Next year, he said, “you’ll see big brands not historically in wireless” jump in because wireless can help them connect more with their customers.

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