Virtual Sales Channels

Christmas 1999 will be remembered as the season that e-commerce came of age. Online holiday sales exceeded most expectations as virtual stores raked in an estimated $11 billion, a full 10% more than projected and almost 300% more than the same period in 1998. Scattered problems with order fulfillment dampened the holiday cheer, but for the most part, it was a merry Christmas for almost all e-tailers.

Among the e-tailers are wireless carriers, many of which are already are doing a brisk business. Although online selling is largely an unknown frontier, most carriers agree that e-commerce's potential is enormous.

"We've seen exponential growth," said John Yuzdepski, Sprint PCS vice president for product management and development. "The wireless Web and the wired Internet are a very important part of our marketing strategy."

When it comes to elaborating on their Internet-sales success, most carriers tend to keep their cards close to their vests. But almost all report steady growth as more consumers become familiar with online shopping.

"Our sales have gone up," said Nancy Stark, a spokesperson at Bell Atlantic Mobile (BAM), whose online store debuted in September 1997. "It's still a small part of our business, but it's growing."

Online wireless stores offer Internet shoppers an experience similar to what they might find in a bricks-and-mortar store. They can choose from an array of phones and accessories. Another click of the mouse takes them to a list of rate plans, often based on their particular geographic regions. When they're ready to purchase, they enter their credit-card information and wait for approval, which usually takes only a few moments.

"Our Web site was designed to do credit applications from the very beginning," said Yuzdepski, whose online store opened in December 1998. "We consider it a routine service now."

One difference from traditional stores is that many carriers' sites also allow subscribers to check and pay bills, add or delete services and in some cases, see how many minutes they've used so far and how many remain. Aside from those enhancements, most carriers say the goal is to make the online experience as much like real-world shopping as possible -- except for the traffic, parking hassles and occasional bad weather.

"We try to take them through the same process they would go through at a store," said Joe Patterson, Powertel spokesperson. "But because we can't probe as deeply about their usage habits, the sales process is not as complete."

MISSED OPPORTUNITIES? That's one problem with selling wireless products on the Internet, according to many bricks-and-mortar retailers, who now find themselves facing a new type of competition. For potential subscribers, the wireless world can be dauntingly complicated, and making choices often requires a knowledgeable salesperson who can suggest solutions.

"Our belief is that inter-personal relationships are the key to wireless retail selling," said Dan Zimmerman, vice president for marketing at The Car Phone Store and Wireless Zone franchises, which have more than 100 stores in the eastern United States. "The good thing about the Web is that it will force our salespeople to learn and understand customers even better. The retailers who survive in this new environment will be those who can be trusted by consumers."

Zimmerman noted that wireless service today includes much more than just the phone. Customers now can choose from a variety of service bundles, but choosing the right bundle can be difficult. There are pagers, Palm devices, smart phones, hands-free kits and myriad other devices. Then there's a menu of rate plans to consider. Good advice helps customers make informed choices, which will reduce anxiety and should lead to repeat business.

Most carriers say that wireless is big enough for both online and bricks-and-mortar operations to co-exist and prosper, thanks to the growing number of services available and lower costs. As more consumers go wireless, more opportunities exist for both virtual and real stores.

"We don't see online selling as a disruptive technology," Yuzdepski said. "People still want to see and touch the equipment. It's a symbiotic relationship. We've had experiences where a customer has seen a piece of equipment on the Web and gone to a retailer to purchase it. We also know that some customers have used the Web to locate a dealer nearby."

One of the biggest advantages bricks-and-mortar stores have over online stores is visibility. For most consumers, it's still easier to find a real store in the Yellow Pages than wander through cyberspace looking for a specific retailer or company. Real stores also have highway signs, while online stores have URLs.

Getting more people to visit the online store can be tricky. It's unlikely that people will stumble onto a Web site that sells phones unless they're specifically looking for one, so walk-in customers drawn by curiosity or impulse are much less common.

Many carriers use Internet banner ads to direct potential customers, and most carriers include their URLs with print and broadcast ads. Powertel, for example, spotlights its site via banner ads, invoice inserts, customer newsletters and includes the URL in all TV, radio, print and outdoor ads. BAM, meanwhile, has agreements with other Internet retailers, including Toys "R" Us, to refer customers to the BAM site.

Expect to see more creative sales approaches as carriers explore new methods and technologies. E-commerce is as much evolution as revolution, and all the players are learning on-the-fly.

"It's all about constant evolution of content and accessibility," Yuzdepski said. "The Web is a new, rich experience. We've already learned a lot from a product-management-and-operations point of view, and we're learning how to make it better all the time. We want to keep changing and developing our ability to sell on the Internet. We think it's a natural evolution of retailing."