Online sales are skyrocketing-and wireless carriers are keeping pace as consumers increasingly look to the Web as a venue to shop and buy.
Online sales (excluding travel) raked in $30.1 billion during the holiday shopping season, and sales of consumer electronics such as cellular phones and other media accessories jumped 109 percent from last year, according to the Holiday eSpending Report by Goldman, Sachs & Co., Neilson/NetRatings and Harris Interactive.
Consumer electronics was the second-fastest-growing category of online sales, totaling $4.8 billion this holiday season. Only sales of computer hardware and peripherals grew faster.
While online purchases of phones and services are still less than 10 percent of most carriers’ sales and activations, that figure is growing quickly. Online adds grew by 41 percent between the second and third quarter of 2005 alone-so carriers are looking to make their Web sites easier to navigate and richer in information, according to Compete Inc. The research firm studies wireless consumers’ online behavior.
At the same time, carrier representatives said they want to make the shopping and purchasing experience simpler, easier and more personal.
“The wireless industry, counterintuitively, is in some ways behind the rest of the world in using the Web,” said Adam Guy, managing director of Compete’s wireless practice. He said that because customers often want to handle phones before they make a purchase, the industry was slow to realize that customers would buy phones online. “It’s only in the last three years that we’ve seen a lot of changes,” Guy added. “It’s really been catching up to the travel industry, financial services and other industry markets.”
Mark Lawson, executive director of e-business for Verizon Wireless, said that in the past few years his company’s Web site has evolved from a support site for other retail channels with “pretty stagnant content” into a sales and customer-care channel in its own right.
He added that the carrier wants to uphold its Web site as a place where existing customers can make account changes quickly and easily, rather than going to a store. “You’ll see those types of items that we will promote heavily to really help support our other channels, and allow them to focus on sales for those who are in the stores,” Lawson said.
Carrier Web sites are most often trolled by surfers looking for a new phone or service. Bob Steelhammer, vice president of e-commerce for Cingular Wireless L.L.C., said that 70 percent of people shopping for wireless come to his company’s site before making a decision.
“I think that any carrier that doesn’t think their Web presence is a significant part of their business … is selling themselves short,” Steelhammer said. “It truly is a business within itself, or should be, within the carriers.”
Cingular, he added, expects to launch a new online account management system early in the second quarter. The system is designed to be more customer-friendly and promote a warmer relationship with Cingular’s subscribers. Steelhammer said he’d also like to see Cingular expand its online presence into portals where its customers already go, and help customers better filter the overwhelming amount of cellular phone information that’s available.
While Compete’s Guy said he doesn’t see any truly innovative content on carriers’ sites, each offers elements designed to take advantage of the Web’s interactive capabilities.
Verizon Wireless recently added a Digital Technical Support page to its site, which allows customers to view an interactive tutorial for their handset that shows them, for example, which buttons to push to download a game or connect to a Bluetooth headset.
Cingular customers can search for all content by, say, rapper Snoop Dogg, rather than look for ringtones and graphics separately.
T-Mobile USA Inc. lets would-be customers check for service in their neighborhoods by typing in their address. A detailed map pops up that rates coverage from “none” to “great” around the given location.
Sprint Nextel Corp.’s Web site allows customers to preview video clips from various channels on its Power Vision video service, which is a big innovation for the site, according to Brian Schaefer, group manager of e-commerce for Sprint Nextel.
“Content on the phone is a big piece of what Sprint does, and that trickles down to being a very important thing [on the site],” said Schaefer. “It allows us to do some very cool things in terms of showing the breadth of what you can do on the phone.”
With all these improvements to sites, however, Compete Senior Analyst Sharon Bernstein maintains there is much more carriers could do. For instance, she suggested customers could be offered a series of lifestyle questions that would allow them to detail what sort of service they’re looking for (a family seeking multiple lines, a businessman looking for a handset with extensive data capabilities, a student who wants a lot of cheap minutes), how much they want to spend and other such questions. Then the carrier could offer the customer phone and service options that fit the stated profile.
“They need to go after more lifestyle marketing and customer bundles based on lifestyle,” Bernstein said. “The carriers just aren’t there yet. They’re still sort of marketing to everybody all the time.”
