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Blokey stores in need of feminine touch

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With the dash for growth over, UK mobile operator 3 is settling into the business of consolidation. 3 has opened 200 new UK stores in the past year, but there's one slight problem - they're a bit blokey.

So Marc Allera, 3's UK sales chief, told us when we caught up with him recently.

"We want to appeal to everyone. The stores are a little bit male and not as welcoming as they should be," Allera told us. "Seventy per cent of staff are male - we need to make them more attractive to women."

Apparently, this means better colours and a less stark black-and-white colour scheme.

Bricks and mortar are expensive to acquire and maintain, but the stores help 3 keep much more of the pie than through its channel. Previously, 80 per cent of 3's sales had been indirect - now 60 per cent of business is conducted through direct channels - telesales or the web. The company's results reflect this: 3 has a steady four million customers in the UK, of whom 60 per cent are postpay, and it reported a 16 per cent growth in revenue for the UK business in its most recent results. But the real number to boast about was that the cost of acquiring customers fell by 43 per cent.

With Apple partnering with Starbucks to sell music, did 3 see an opportunity to use its high street presence in a similar way? We've been tracking the progress of these digital kiosks for some years - and while they're a familiar sight in some games retailers, mobile operators have been leery of installing them.

"Digital download points aren't quite there yet," Allera told us. "People aren't doing it today - the customer sees more value in impulse downloads on the move."

Allera spent only a brief amount of time discussing 3's disruptive new data deal - a tenner a month for laptop broadband via a USB dongle - which surely applies the coup de grace to the ailing commercial Wi-Fi business model in the UK. We'd expected him to gloat a bit more. Wi-Fi hotspots, he said, are a great way of fleecing people checking email. 3's new £10-a-month detail should appeal to "students and journalists" and media creatives the most, he thinks, but also any small business which isn't shackled provisioned by a corporate IT policy. So mobile data moves from luxury to commodity.

Perhaps because it's the newest arrival, Hutchison's 3 seems to be relatively free from the corporate in-fighting that seems to paralyse its more established rivals. Here, three of its rivals either emerged from state-owned telco incumbents, or have been acquired by former state-owned incumbents. By comparison, the operator can turn on a sixpence: within weeks of launching as a premium "multimedia" network in 2003, it had reversed strategy to compete on price, for example. And 3's X-Series programme goes far closer to embracing IP technologies (albeit on 3's own terms) than its competitors feel comfortable with.

Given the mobile operators' seemingly infinite capacity to do the wrong thing, it's nice when one gets it right. ®

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