Telstra's store revamp - in search of consistency

When Telstra CEO, David Thodey, trumpeted the innovations in customer service embedded in the company's new $112m flagship retail outlet in the old Daryl Lea chocolate shop at 396 George Street, Sydney he talked about giving customers the ability to start an interaction in one store, review the history on their own PC, tablet etc and, eventually, when the retail refresh has been rolled out fully, pick up the conversation in another store.

Trouble is, although many of those stores might look and to some extent feel like Telstra stores, they aren't. ASX listed Vita Group alone operates 109 Telstra branded retail stores and Telstra Business centres around Australia.

I asked Thodey whether the same seamless experience would be available across these licensed stores - because of course customers are blithely unaware of ownership distinctions. Not initially, he said, but this was something Telstra was working on.

Consistency of customer experience in retail environments certainly something that has been highlighted as important and its importance is reflected in the long history of love-hate relationships between Australian mobile operators and the own versus licensed retail outlet model.

Last year KPMG published the results of a global mystery shopping exercise for prepaid SIMs. They weren't interested in prepaid SIMs per se, but they were a convenient, and almost universal product that could be used to contrast and compare the 'customer experience' across different channels - online, in store, etc - different outlets - owned v licensed v independent - and different countries.

Consistency loomed large. "In the early days of prepaid, operators are often happy to have their products sold from all retail channels: licensees, non-exclusive, supermarkets, convenience stores, etc," KPMG said. "The focus has now changed to the extent that some operators are buying back the franchise and licensee stores so they can have more control over the customer experience. ... It is vitally important that operators deliver a consistent experience across all retail outlets regardless of ownership."

KPMG went on to note that "Two leading Australian telcos in April 2013 both moved to end long-standing agreement with sub distributors of their prepaid offerings to allow for more control of the channel."

Optus last year shed deals with AllPhones and TeleChoice cutting its retail outlets by over 300 stores and announced plans to open up another 30 of its own stores. Optus MD of sales, Rohan Ganeson, was reported saying: “We believe [that] investing more in our stores, investing more online and investing into our people will deliver [the] results we need them to, but also deliver a greater experience for our customers overall. We think the renewed focus will give a cleaner, more engaging…customer experience — much more enjoyable — rather than going in and having a phone flogged to you.”

Vodafone has had a view of retail that has varied with its ownership. Back in 2003 it jettisoned the last of its retail stores announcing a deal to outsource the operation of its 58 shops to privately held phone retailers Digicall Australia and First Mobile. Then in 2009, following the merger with Hutchison, the new company announced that it would bring all its 208 Vodafone-branded retail outlets in-house.

VHA said: “We do see it as a very important strategic shift which will allow us to own and operate our national Vodafone-branded retail channel. “We also see it as a very shrewd move competitively because it will better position VHA with a more cohesive and consistent Vodafone customer experience."

Of course what these stores sell has changed dramatically over the past decade. And it was clear from the Telstra store that it's not just about mobiles. It about smart homes, wearable devices, Internet connected domestic appliances and more. The store even features a wall sized video screen portraying products and technologies that are, to varying degrees 'futureware'.

To communicate the full potential of what is available to the connected consumer will increasingly require significant investment in large demonstration-type facilities like the new Telstra store. Maintaining a consistent experience across multiple outlets will be a huge challenge.