Why cellcos need to think like retailers

John C. Tanner
19 Apr 2012

There was plenty of that this year. Google executive chair Eric Schmidt ruminated on the transformation of the digital divide from connected vs unconnected to ultra-connected vs basic connectivity. FourSquare chief Dennis Crowley talked about the power of location-based services to enrich mobile social media apps. Facebook CTO Bret Taylor talked about the company's plans to accelerate HTML5 adoption to promote web apps development. Even Ford Motor president and CEO Bill Ford, Jr, was on hand to talk up the future of cars as the next big mobile device that will leverage the cloud one of these days.

However, a new twist this year was the appearance of retailers, from brick and mortar (Best Buy) to e-commerce (eBay). And they had much to say about the grand opportunities that the mobile broadband era is creating for their businesses, and the one big significant barrier in their way: mobile operators that continue to favor closed systems and exclusivity, and approach their user base in terms of "subscribers" instead of "consumers".

Breaking down barriers

Brian Dunn, CEO of US-based retailer Best Buy, said mobile broadband, apps and connected devices (to include automobiles and appliances) are reshaping the retail game and changing the way consumers shop. But he criticized cellcos for creating growth barriers such as locking devices to networks - which Dunn said inhibits growth, drives up prices and makes it difficult to create customized plans to suit different customer needs - and creating new tiered pricing plans that are overpriced and confusing.

"They don't think in terms of megabytes," he said. Indeed, mobile customers (like any other consumer) think in terms of value for money - if you don't show them the value, they won't think it's worth paying for.

That matters because, as eBay president and CEO John Donahoe pointed out at MWC that just as mobile is becoming the "central dashboard" in consumers' lives, it's also changing the way they consume products.

"Retailers are seeing more consumer behavior changes in the last three years than in the previous ten to 20 years, as consumers increasingly use mobile as part of the shopping experience," Donahoe said, whether it's to seek more product information, comparison-shop for prices or close a deal.

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