2degrees has revealed plans to open its own retail stores, and is about to go on a recruiting drive for "store operators."
So far, the mobile newcomer has sold its SIM card and phones through the likes of Dick Smith and supermarkets.
But with its 3G network upgrade pending, 2degrees will want to move beyond pre-pay only deals and add post-paid contracts to its mix.
After all, as IDC analyst Rosalie Nelson said, if you want to convince someone to sign a two-year contract, and upsell them to a smartphone, datacard and netbook while you’re at it (2degrees is even positioning itself to be iPhone 4-friendly).
Now that’s come to pass, with the revelation that 2degrees is seeking leases on shop space in the Auckland, Wellington and Christchurch CBDs, and nosing around "second-tier centres" including Hamilton, Palmerston North, Tauranga, Nelson and Dunedin.
2degrees’ corporate communications manager Bryony Hilless told NBR there would be two tiers of store - those leased by 2degrees itself in Auckland, Wellington and Christchurch, and those leased by accredited dealers (who will also likely spring up in the main centres).
Seeking store operators ...
A website will launch tomorrow – 2degreesdealer.co.nz – where people interested in participating in the retail push can sign up. And maybe where some of their questions will be answered (Tip: ask when the 3G launch will happen – and what will be my cut when I sign a someone to a juicy 3G contract?).
Ms Hilless said the retail outlets would not be a franchise model; there willbe no regular base fee that people who run a retail store have to pay the telco.
... willing to front some cash themselves
However, if you want to play, you’ve still got to pay: to become a 2degrees store operator, you’ll have to pay for the shop fit-out yourself.
"Once the dealer iis approved they need to commit the capital to do the store fit out and also buy the stock," Ms Hilless told NBR.
"After this the business is their own. We do not charge a license fee, nor any franchise fee, do not ask for commission on sales, nor request any annual payment back to 2degrees."
So don’t head to 2degreesdealer.co.nz tomorrow unless you’ve got a few tens of thousands of dollars on hand.
How much, exactly?
"Because the costs can be so variable we can’t put a firm figure on it," Ms Hilless said.
"However, we’d be able to work through capital costs with interested dealers dependant on their circumstances.
"For example if the dealer has their own store, or they need to go and lease a store, the size of the store, what needs to be done to the store - for example, drop the floor or ceiling, how many fixtures and fittings they’d need in the store, the amount of point of sale etc."
According to a FAQ now posted online, applicants will be able to potentially run more than one store, and have freedom to set their own product pricing (although there will be suggested guidelines).
The initial term is three years, with a mutually agreed renewal clause after that.
More than eight
Yesterday, the NZ Herald quoted 2degrees head of retail sales Stephen Moon as saying eight 2degrees stores would be opened over the next 12 months.
Apparently, that was not correct.
"For the first wave the plan is significantly more than that," Ms Hilless said.
It depends. "As we sign-off on leases and sign-up dealers for stores we’ll be able to give you specific numbers," Ms Hilless said.
How the opposition stands
Nationwide, Telecom owns 32 retail stores directly, and has 86 partner stores through Orb and Leading Edge, five kiosks in high traffic malls and hundreds of retailers through multi-channel device sales in the like of Dick Smith Electronics, Bond and Bond, Powerhouse, Smith City, The Warehouse, Harvey Norman, Power Store and Noel Leeming.
Vodafone owns 18 flagship stores, but most of its retail outlets are operated by partners DigiMobile and First Mobile. All up there are 130 Vodafone-branded stores - as well as multichannel retailers such as Bond & Bond, Dick Smith, The Warehouse and others.
Tue, 13 Jul 2010