2023 Trends in Telecom Retail

In our last survey, two years ago, telecom retail operators proved that they were a confident group when it comes to business forecasts. Today, that optimism still exists — but it’s a little more cautious than before. In our questions about retailers’ business outlooks, most respondents still chose to see a bright future. But in each case, that majority was noticeably smaller than it had been two years ago, with more respondents moving towards neutral or negative sentiment. 

Nearly 60% said they expected sales of new wireless devices (smartphones or tablets) to rise over the next three years, but that’s down from nearly 70% last time. For smart home devices, a healthy majority of 78.7% expect an increase — but again, not as high as the near-84% from two years ago. 

There also seems to be a slight reduction in the rapid growth of competition in the market. Yes, competition is still increasing, according to 68.1% of respondents. But that’s not as high as two years ago, at 72.8%. Could the telecom sector in North America be moving towards saturation point? 

The inevitable conclusion from the survey answers is that optimism in the industry still exists but may be wavering — no doubt due to some of the challenges faced in the industry, as explored in the following section. 

No matter who you are in this sector, there tends to be a set of common hurdles facing every telecom retail business. In surveying our base, we found that the biggest challenge ahead of respondents was a general continued economic uncertainty, which 59.5% said they were worried about, making it our top answer. That’s even higher than the 49.6% of our last survey in 2021, when this was also the top answer. 

The second most concerning trend for our respondents was the decreasing demand for new devices, due to less frequent upgrades — a question that wasn’t even on our radar two years ago. 

The introduction of eSIM technology is a newer hurdle to overcome. The vast majority of respondents — nearly 86% — see business opportunities of some kind with eSIM, and most are formulating strategies around it. But a third also see it as a threat. 

With competition increasing, respondents see lower-priced plans, better promotions, and better rate plans being the key factors potentially luring customers to other carriers. Given the economic uncertainty that all are feeling — especially the customers themselves — it’s not a shock that they’re looking for bargains. Added to that, major carriers are making big moves to answer this call and offer better value. For example, telecom giant Verizon bought out pre-paid brand Tracfone and launched Total by Verizon as a prepaid option, which is currently opening new stores and enabling Verizon to offer lower-priced plans to a different demographic than its post-paid customer base. 

In today’s retail environment, customers expect a unified online-to-in-store experience, with a range of features such as Buy Online Pick up In-Store (BOPIS), drop shipping options, contactless payments, and more. These unified commerce offerings are no longer optional for those retailers who don’t want to get left behind. 

Some unified commerce features that were implemented during the COVID pandemic have remained part of the new normal, but some have seen a drop in demand since store traffic has returned. Of the unified commerce strategies implemented due to the coronavirus pandemic or earlier, curbside pickup is the third most popular, but also the feature most likely to have been cancelled since. Even BOPIS, which has seen a huge surge in popularity and has usually been kept in place, has seen some retailers remove this option when stores returned to regular activity. 

When it comes to the biggest challenges facing telecom retailers in implementing unified commerce strategies, one answer dominated, and that was tacking the complexities of carrier-to-retailer system integrations. iQmetrix’s Stacy Hamer sees this pain point between carriers and authorized retailers every day. ​“It’s just so overwhelming,” she said. ​“You have a spaghetti-bowl of integrations that makes it incredibly difficult to implement new technologies such as omnichannel solutions. It’s hard to even know where to start. That’s where you need a unified, integrated suite of solutions that untangles that spaghetti bowl, streamlines integrations, and makes it easy to implement new technologies that just plug into your existing systems. That’s why we at iQmetrix exist. That’s why Interconnected Commerce exists.” 

It’s no secret that that a key pain point for telecom retail operators and their customers is long, clunky, and onerous activation times. More than 60% of respondents said that the purchase and activation process in their stores took above 30 minutes, with a full quarter of respondents saying it averaged above 45 minutes. 

The challenges in the activation space are many and varied, ranging from the high costs of maintaining an in-house activation solution, to that poor customer experience mentioned above, to high agent training costs, and more. 

Hamer added, ​“That’s where you need a single activation solution that is integrated one time and deployed to many, reducing IT infrastructure costs; that is simple and easy to use, which reduces agent training costs and helps with staff turnover; and that keeps retailers up to date with all carrier rate plans and offerings, which are only getting harder to keep track of.” 

With so much coverage of the rapid rise in Artificial Intelligence (AI) technology, along with some of the Augmented Reality/​Virtual Reality (AR/VR) and holographic technology on display at events such as the Consumer Electronics Show, it is important to explore their potential future impact on telecom retail. And, sci-fi-like technologies aside, what does the future of telecom retail look like in terms of consumer purchasing habits and shopping channels? 

Nearly two-thirds of respondents said it was either very or somewhat likely that there would be ​“considerable growth in AI and machine-learning being used to analyze customer data and retail patterns/​buying behavior, which is then used to shape retail strategies” — making this practical application the top answer in our AI/AR/VR question. 

Using AI for customer service is another key trend, deemed the second-most likely to grow over the next few years by survey respondents. iQmetrix’s Stacy Hamer is seeing this play out in client conversations, too. She said, ​“I’m fascinated that three times in the last week, this idea of an AI-powered or in-store virtual assistant has come up in client discussions. So, there is an appetite to think about it and talk about it, which suggests that it could soon be a reality.” 

As for the future of consumer purchasing habits and where respondents see the focus? Just like in our last survey two years ago, the top-selected answer — by more than three-quarters of respondents — was ​“greater focus on customer loyalty and rewards programs to upsell and increase consumer spend.” Given that competition is continuing to increase in the wireless space, especially from wireline companies entering the market and successfully luring subscribers with attractive bundling options, it’s perhaps not surprising. 

Hamer agrees wholeheartedly with this assessment and thinks consumers’ loyalty to their existing points schemes could be key to this. ​“It’s not about winning the new subscriber race anymore; it’s about winning the customer loyalty race.”