credit TelusSteve Tsai/Telus
The Metropolis at Metrotown Shopping Centre in Burnaby, B.C. is the new front in the wireless wars.
In a digital age, a growing array of technology and telecommunications heavyweights are shifting their efforts to bricks-and-mortar stores, adding bells and whistles and ramping up their footprint. They're borrowing a page from the playbook of tech titan Apple Inc., whose "genius bar" draws customers to its old-world physical outlets.
The race to the mall is being played out at shopping centres across the country, including Metropolis, one of the country's largest. It now boasts 15 telecom and tech stores, including Apple, Best Buy Mobile, Wind Mobile, three Rogers outlets and two each of Telus and Bell Mobility, plus seven wireless kiosks. This summer, the mall will add the first Samsung store in Canada.
"These are reactions to the wild success of the Apple store," said Chris O'Neill, managing director of Google Canada, which has worked with Samsung. "These are showcase stores. … A lot of people see that as a model to emulate."
Grappling with a hyper-competitive wireless landscape, tech players are rushing into low-tech malls as they look for ways to stand out in a sector of increasingly look-alike products. They're investing in high-tech projection screens on glass walls and high-definition television screens embedded in the floor, betting that pumping up store sites and staff training will help lure customers from rivals.
Apple's performance underlines that a trip to the mall can be worthwhile. Its stores generated an average of $5,000 of sales per square foot in 2011, about 12 times greater than the sales of an average mall retailer, according to Green Street Advisors. "Apple is perhaps the most successful retailer ever," it said in a report this month [May] "Apple is not a tech phenomenon. It is a mall phenomenon."
The shopping centre is appealing because companies with a retail presence enjoy overall sales that can soar 50 to 100 per cent when they sell their products both online and in stores, rather than just in one or the other, Mr. O'Neill said, based on his work at Google with retailers and tech firms.
Shoppers' online research and purchases often prompt consumers to head to a bricks-and-mortar store to shell out for more merchandise, he said. U.S. retailer Macy's Inc. has found that every dollar spent online leads to about $6 of purchases at stores within 10 days, said Kent Anderson, president of Macys.com, which works with Google.
"People want to come in to the store, they want to touch the product," said Derek Hurley, property manager at Metropolis. "It's also the instant gratification factor of being able to purchase the product and take it home and start using it immediately."
Apple has changed the retail game, showing other tech players how to gain greater control and exposure of their brand rather than counting on others – particularly big-box retailers – to sell their merchandise like any other commodity, he said
Other tech players are using Apple's model of spending significantly on staff training, inspired by Apple "geniuses" who help iPhone and iPad shoppers.
Research by Telus Corp. indicates that about 80 per cent of its customers check out telephones online but also want to walk into a store to ask questions before finalizing a purchase, said Marc Jamieson, the company's director of marketing. As a result, Telus is providing "several" weeks of training to employees before they step into a store, which he calls "learning centres." The stores have offered more than 100,000 "learning sessions" so far this year.
"People want human interaction and human education," Mr. Jamieson said. "All of these phones pretty much look the same now, but their guts are very different."
To entice more customers, Telus' latest test retail concept at the Pickering Town Centre entails glass walls that serve as projection screens, a futuristic blue-lit space, high-definition television screens embedded in the floor and pedestals to display devices.
Educating customers is also the focus at Rogers Communications Inc., which is converting about 80 of its movie and game rental stores into telecom outlets. Rogers is racing to do a better job of showing customers how devices can work together, including tablets, phones and digital television recorders, said Sian Doyle, vice-president of retail.
Still, retailers run the risk of being caught in the "showrooming" phenomenon of consumers using their stores to look at products and then buying them at a lower cost at Amazon.com, said Mark Ryski, founder of retail consultancy Headcount.
Even so, bricks-and-mortar stores are attractive to tech companies because they have a track record of generating higher conversion rates – converting browsers into buyers – than websites, said Mr. Ryski, author of Conversion: The Last Great Retail Metric.
While tech retailers have a 20- to 25-per-cent conversion rate, that of top online shops such as Amazon.com is closer to 10 to 15 per cent, Mr. Ryski estimated. In a physical store, "they have a better opportunity to actually engage with the customer and make the sale. … What Apple has done is remind everybody how important bricks-and-mortar stores are."