MTS reorganized retail business with great results

Tuesday 11 February 2014

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MTS reorganized retail business with great results

MOSCOW. Jan 22 

MTS said in a statement that the updated outlets of Russian Telephone Company (RTC), which manages the mobile operator's retail chain, will have a third more data generating devices and accessories for them.

MTS expects this will both increase the profitability of sales at outlets and their effectiveness for the operator, since the average monthly revenue per user (ARPU) on smartphones and tablets is 50% higher than the average ARPU. The average ARPU in MTS' network was 319 rubles in the third quarter of 2013.

MTS also expects that optimization of space at outlets will enable it to reduce investment in opening new outlets by 10% for shops with an area of 50-60 square meters and by up to 200% for large stores of 80-100 square meters.

Through proper zoning, emphasis on smartphone displays with lighting solutions, placement of furniture and customer flows, a retailer can fit a product range in 40-60 square meter shops that is comparable to stores with twice the area, MTS said.

The new concept for offices calls for their evolution into showrooms for the MTS online store. Customers will be able to view and test equipment at shops and then buy it at the online store. Most shops will have a separate section for provision of financial services under the MTS brand.

MTS made the decision to change the concept of its offices after completing a pilot project. In the third quarter of 2013, the operator reformatted ten outlets in several Russian regions. As a result of the experiment, sales at these outlets grew by 10-30%. The format for the showrooms was developed jointly with JosDeVries, a European agency that specializes in developing retail concepts.

Starting this year, MTS plans to apply the new format in all federal districts when opening new outlets or renovating existing ones. Initially, by the spring of 2014, MTS plans to open about 50 of the new format outlets in Moscow, Siberia, the Urals, the Far East, the Volga region, and the Northwest, South and Central Russia.

The new concept will be introduced at several hundred outlets by the end of 2014.

MTS has the second largest mobile phone retail chain in Russia after Euroset. RTC operates 4,063 outlets, including 2,800 company-owned, in 980 Russian cities.

There are no plans to expand the chain as part of the new concept. "We currently have a comfortable number of outlets for attracting and serving subscribers. The opening of showrooms with the new format will take place primarily through renovation of existing sales offices. And all new outlets that start working under the MTS brand will be opened as part of the new concept," MTS spokesman Dmitry Solodovnikov said.

RTC increased smartphone sales by 60% in 2013, while sales of regular mobile phones fell 28%. Smartphones' share of total phone sales grew to 48% from over 30% a year earlier. Sales of tablets in the MTS retail chain soared 250% in 2013

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