Online share of Smartphone Sales Set to Surge with Mobile Service Provider Stores losing out in US and UK

3 in 4 consumers in USA plan to buy through online channels in the next smartphone purchase cycle.

Clients to our Smartphone Strategies service can download the full report  "How will COVID-19 Change Consumer Purchase Channels for Smartphones in Germany, USA, UK?"  here.

The US has historically had stronger operator and partner retail physical stores but smartphone buyers expect online channels to grow by 22 points for their next purchase.

• German channels like Media Markt who have suffered dramatically with the retail lockdown will likely continue to see consumers defect to online channels.
• Mobile Service Provider physical stores could be the biggest casualties if consumers follow through on their plans to flee retail in favor of online research, purchase and fulfilment.
• Operator store volume share could drop (-13pts) in the US and (-6pts) in UK in the next purchase cycle as covid-19 lockdowns proved that online channels could and did meet consumer needs for smartphones as well as a whole host of other purchases.
• Significant potential growth in online purchases direct from manufacturers is reported by consumers especially in the US and UK.
• Consumers who previously required or wanted the peace of mind of visiting a store, touching a product and getting expert in-store advice have experienced online end to end and like it!
• Willingness to buy online rather than at retail is generally negatively correlated with age overall but the Covid-19 lockdown experience has further opened the eyes and wallets of boomers and older consumers to the benefits of online purchases.
  
  

Operators, vendors and retailers will have to work extra hard to persuade a hesitant portion of smartphone owners that new devices are worth making an investment in relative to other priorities in the early Covid recovery period starting in Q3 and Q4 2020. 

Although many countries are tiptoeing into reopening their economy, consumer confidence is fragile and the outlook for job retention, salary growth and overall recovery is hazy at best.

However, there are soft signs of consumers rediscovering their appetite for postponed or deferred purchases of smartphones initially in China and more recently captured in our consumer insight analysis in UK, Germany and US.(LINK). The momentum behind online channels for smartphones is unstoppable across UK, Germany and US markets. Consumers are increasingly comfortable researching online and purchasing online in the temporary absence of retail stores to provide hands on emotional and physical validation.

Service providers (operators) still have a critical role to play both through their own online channels and their showcase retail stores.  For leading device vendors, ramping up their own online channels as experience centers and showcases for their innovation targeting loyal customers across their smart device and smart home ecosystem will become even more critical.

Some of the key questions Strategy Analytics can assist with exploring include:

Which operators emerge from COVID-19 with positive sentiment? Who are laggards?

What needs to be done to improve the new normal retail store POS and buyer experience?

Which segments of customers should be engaged online, hands on, high touch and those who should be serviced exclusively online for mobile and converged services?

As new Asian vendors ramp up in UK, US and throughout Europe, what best practices will port over from Asia and what won’t work?

What new retail experiences should be developed in the post COVID world?