Should Wireless Carriers Drop Their Retail Stores?
Once upon a time, the reasoning in a Wall Street Journal article goes,
it made sense for wireless carriers to operate retail stores because not everyone
had a mobile phone and the focus was on signing up new subscribers. That reality
led to the major cell phone companies opening thousands of retail locations.
Today, however, the focus has shifted on generating more revenues and profits
from existing subscribers with added services and faster connections. That
change in the market, according to the Journal piece, makes operating
stores much less critical than in the past. In fact, with Best Buy (1,000 stores),
RadioShack (4,500) and others making big pushes into the wireless business,
it might just make more sense for retailers to handle the heavy lifting.
Dan Hays, a partner with consulting firm PRTM, told the Journal that
major carriers invest about $500,000 a year to operate each retail store. That,
in the case of Verizon, added up to $1.1 billion or 1.7 percent of its revenue
Discussion Questions: Do you think the time is right for wireless carriers
to get out of the business of operating retail stores or is there some necessary
benefit that would be lost should they follow this course? What do you see
as the next big thing in wireless technology and how will it affect retailing
of these products?