Zoning In on Mobile Commerce
Wireless made simple. That’s been the aim of Wireless Zone since it was founded back in 1988. Originally called “The Car Phone Store,” it used the franchise model to expand. It wasn’t an easy sell in the beginning—few people knew what cellular was all about and a stand-alone wireless store was truly a unique idea.
The company changed its name to Wireless Zone in 1999 to convey more clearly the products it sold. Today, it stocks the latest in cellular/wireless phones, GPS navigation and wireless accessories, along with Verizon FiOS High Speed Fiber Optic Network and other Verizon Wireless services.
Since The Car Phone Store first opened its doors, the wireless industry has changed considerably. It is now worth an estimated $37 billion per year and growing—and so is Wireless Zone. Known for its quality customer service and convenient locations, Wireless Zone is adding new stores in untapped markets and undertaking a branding campaign that will ultimately result in a new look and feel for its stores and Web site. Currently, it is targeting the Buffalo-Niagara area (New York) as a primary expansion market.
Chain Store Age associate editor/ Web editor Samantha Murphy spoke with Kevin Sinclair, CEO and president of Wireless Zone, about the business and the future of wireless technology, particularly with regard to its next big application: mobile commerce.
Chain Store Age: How many stores does Wireless Zone operate?
Kevin Sinclair: Approximately 260—all of which are franchises.
CSA: What is the company’s target demographic?
Sinclair: Consumers in small towns and rural areas. The major phone companies generally occupy Type A locations in densely populated areas. Since some rural regions are too small for companies such as Verizon to invest in big locations, this is where we set up shop. But consumers in small-town America have the same needs as someone living in a major metropolitan market—despite the fact that many residents of rural areas may not have high-speed Internet. A handheld wireless device is the perfect way to keep them connected, regardless of their geographic location.
CSA: Who is your average customer?
Sinclair: Actually, one of the most exciting parts of this growing space is that there is no longer an average customer. The type of technology we sell is applicable and useful to every-one—from senior citizens to kids. We target all age groups and offer plans and devices specifically for their individual needs.
CSA: Mobile commerce (m-commerce) is booming in Asia and parts of Europe. Why has the United States been so slow to embrace it?
Sinclair: M-commerce is far more advanced in other countries due to the fact that our wireline system is so robust. Almost every U.S. house and office has wire connections—and in most instances, people are very happy with the speed of their Internet and feel comfortable shopping on a computer. However, in some foreign countries, especially in the more rural areas, there isn’t a telephone pole every 50 feet. Since it’s easier to develop wireless, rather than constructing an entire wireline system, consumers have been forced to adapt overseas.
CSA: How do you think m-commerce will evolve here?
Sinclair: Consumers are now logging onto their wireless devices to check airline flight status and select seats. Once people become more comfortable with concepts like this, service and entertainment merchants will jump in. Consumers will start to purchase movie and concert tickets on wireless devices, especially since young shoppers don’t want to wait in line.
The next big m-commerce push will be in electronics, especially with computerized products. Eventually, consumers will come to rely on their handhelds for the majority of their purchases. Consumers under the age of 35 will adapt more quickly, likely within the next year or so, because wireless has already been a part of their life and they tend to be more eager to try new technology.
CSA: How has wireless growth impacted the way Wireless Zone runs its business?
Sinclair: When consumers walk into our stores, they know a lot more about products than they used to, thanks to online research. We have been forced to hire more knowledgeable salespeople to cater to these consumers. Since product information is more readily available on handheld devices, employees have to step up to the plate and always be ready.
CSA: How is Wireless Zone planning for future growth?
Sinclair: I believe that in about 30 year’s time, only 10% of consumers will buy products in retail stores—90% will buy online. To keep pace, we plan to build more e-commerce capabilities into our site. Consumers can buy accessories and select rate plans online, but we have to do much more. However, it’s important to keep in mind that consumers shopping for wireless devices still want to come in to see and touch products before making a purchase. That said, we are looking to expand our bricks-and-mortar locations as well. We hope to have 400 stores nationwide by 2009.
CSA: How will the new site and new store concepts differ from what’s implemented now?
Sinclair: We are launching a new Web site that is much more company-focused, and gives our individual stores more access to their own individual sites attached to ours. We are also adding more interactive in-store displays, such as plasma TVs, to our store model in order to provide ongoing information to keep the customers active, especially during busy periods.
CSA: What wireless device do you use?
Sinclair: I still use two units: A Motorola Razor 2 for voice and quick data, and a Palm Treo for large travel data and my calendar.
Wal-Mart to sell earth-friendly CDs
SANTA MONICA, Calif. As part of Wal-Mart’s “Earth Month” the company is selling more than 20 Universal Music Group titles that come with special earth-friendly inserts. The inserts are made with special seed paper and, according to the companies, can actually bloom into wildflowers.
The inserts, in addition to being good for the environment, also offer consumers three free digital downloads from Universal Music. Universal also said that a number of its new CDs will be packaged in third-party certified, renewable recycled board and recyclable paper.
ODP urges rejection of Levan nominees
DELRAY BEACH, Fla. Office Depot is continuing to urge its shareholders to reject dissident nominees and elect the company’s nominees to its board of directors at its annual shareholders meeting this April.
In a proxy statement sent to investors, Office Depot said that Alan Levan’s proposed nominees would do little to help improve shareholder value. According to the statement, Levan’s company, Levitt Corp. has seen its share price fall about 93% over the past three years and that its subsidiary, Levitt and Sons, is in bankruptcy. Office Depot also noted that BankAtlantic, of which Levan is chairman and ceo and one of his nominees, is president of real estate, construction and development, share price has dropped approximately 75% over the past three years.
Office Depot also cited news reports that commented on Levan’s failing business ventures, as well as others that said that his nominees are not qualified to serve on Office Depot’s board of directors.
The company pointed out nominee Mark Begelman’s experience with Mars Music, a company he founded in 1997 that went bankrupt in 2002. According to Office Depot, many news reports attributed this failure to a flawed business strategy.
According to Office Depot, when Levan’s other nominee, Martin Hanaka served as chairman of Sports Authority from 1998 to 2003, the company saw its price fall by about 13%.
Office Depot stressed that its directors best understand the company and are well-suited to help the company grow.
“We strongly believe that removing two of the most experienced retailing executives from our board, including our current ceo who is driving the implementation of our strategic turnaround plan, would be highly disruptive, could delay the implementation of internal and external initiatives and could damage prospects for a successful turnaround,” Office Depot said in the proxy statement.