Carphone Warehouse has announced an increase in sales in the final quarter of 2013, and credits this largely to the rollout of 4G. The company remains focussed on driving 4G penetration and believes that super-fast mobile internet will bring faster growth in the coming months.
Carphone Warehouse Results
Like-for-like revenues for Carphone Warehouse were up 3.1% on the same period last year, according to its third quarter report. This is more impressive than it sounds given that the monthly contract or postpay market remained fairly flat, and the pay-as-you-go or prepay market has contracted dramatically by around 25-30%. Overall it appears that the increase in sales is due to the increased uptake of 4G contracts, with customers willing to spend a little extra to enjoy the benefits of super-fast mobile internet.
Carphone Warehouse is in a precarious position, as its partners and suppliers are also its main competitors. Handset manufacturers such as Apple, and network providers such as Vodafone and EE are increasingly keen to sell direct to consumers, but Carphone Warehouse is still maintaining a strong position.
The company has recently invested in a state-of-the-art tablet based sales system called PinPoint, which is available for customers to use in Carphone Warehouse stores. The system guides customers through their mobile needs, allowing them to make the best individual decision, and the system has been a real driver for 4G sales. Group CEO Andrew Harrison states that “Our new Pin Point selling tool has proved particularly effective in driving the penetration of 4G tariffs and increasing revenue per connection.”
The PinPoint system is updated twice daily with the best offers from Carphone Warehouse competitors, meaning that shoppers have no need to go elsewhere for price comparison, and are more likely to stay in the store and make a purchase.
Increased Awareness of 4G
Although Carphone Warehouse has seen an overall increase in sales, the company believes that the mobile market in general is currently experiencing a predicted lull while it transitions to 4G. It suggests that customers are waiting to buy a new phone or take out a new contract until the rollout of 4G has progressed further, and they have more choice in handsets and network providers. Carphone Warehouse expects to see a far greater upturn in sales once 4G has become more established.
The company reports that its customers are now becoming more aware of 4G, and according to Graham Stapleton, the new chief executive of Carphone Warehouse UK:
“Customers are now coming in and asking for it. The past three to six months, the questions and the noise and interest have massively increased. Google searches show the move in the UK towards interest in 4G has spiked enormously. We are now starting to see a lot of customers either searching online or coming in-store and asking the questions.”
4G is certainly a high priority for Carphone Warehouse, with the website featuring a 4G Comparison Hub, and a message encouraging customers to move to a 4G tariff even if they’re not in a 4G area. It will be interesting to see how the continuing rollout of 4G impacts the company’s sales figures throughout 2014.