Striving for omnichannel excellence in telecommunications

TOMORROW

It is well known that the rapidly changing customer behavior and the ongoing trend of digitalization will lead to a fundamental shift from offline toward online channels . Additionally , the capital-intensive rollout of new technologies ( e . g ., fiber rollout , 5G deployment ) requires cost reductions , triggering telcos ’ intrinsic motivation to shift to cheaper online channels .

In contrast to these observations , from a sales perspective , the channel mix of telcos before COVID-19 only slightly changed , and operator stores and outbound sales channels still accounted for the majority of sales : In many cases , operator stores accounted for ~ 30 % of sales , followed by outbound telesales accounting for almost 25 % of sales . Consumer electronics retailers contributed ~ 15 % and other indirect retail chains ~ 10 % of sales volume . This clearly shows that offline sales channels are still key , while online sales seemed to stagnate in their contribution , making up for ~ 20 % within the channel mix .

Without a doubt , COVID-19 and its consequences significantly accelerated the shift toward online channels ( e . g ., lockdowns with physical shops closed , changing retail experience , and customer expectations ). This acceleration enforces the opportunity for telcos to revisit and rethink the traditional retail environment , change their retail sales approach , and adapt their channel mix accordingly in the future .

Retail footprint optimization

goetzpartners evaluated various scenarios that telcos must consider when rethinking their retail footprint strategy . As a matter of fact , we observed that most telcos rethought their footprint strategy and questioned the number of their shops . This overarching reduction of physical sales points is ongoing . Over the last five years , leading European telcos started to reduce the number of physical sales points . Footprint reduction targets range

We believe that this change in consumer behavior toward online channels will be sustainable and telcos need to act and adapt accordingly .

Significant increase to above

during the pandemic

20 % Online sales

10 %

Indirect retail chains

15 %

Consumer electronics retailers

25 %

30 % Operator stores

Outbound telesales between 15 % to 30 % of total points of sales , whereas smaller telco operators are planning a > 50 % reduction . Various parameters such as white spots in the retail footprint , customer base / traffic , profitability , and shop layout / condition play an important role when reducing the retail footprint .

Sustainable change in consumer behavior

At the same time , as consumers increasingly shifted toward online channels during the past year , telco providers were pushed toward the improvement of their sparse online offerings to be able to secure their overall sales . We believe that this change in consumer behavior toward online channels will be sustainable and telcos need to act and adapt accordingly .

Source : goetzpartners project experience