Summary
As Apple expands beyond exclusivity in markets it is using additional means to ensure it delivers high levels of service to its end customers.
France Telecom - Orange UK, along with Vodafone are now selling iPhone in competition with O2 and some of the Orange dealers are looking at the detail of the marketing costs that are emerging.
Dealers will need to ensure they can both make the upfront investment in 'in-store' merchandising and also staff training, this means committing to some big sales targets.
Analysis
Apple has historically set a standard for both the revenues it wants to see from iPhone and also the level of service customers receive. As it moves away from exclusive deals it is now working to ensure that the investment cost is passed down to the channel.
From the article, Tom Alexander (CEO, Orange UK) says more than 250,000 customers have expressed interest in obtaining an iPhone. Not all of those can be converted however as many will be on 12, 18 or 24 month contracts already and will need to wait until their contract is up for renewal before upgrading to a new handset.
Meanwhile from Mobile News comes details of the marketing investment needed and also the sales volume that a single store or chain of stores will need to make to recover the costs.
a) Each dealer outlet, not just chain, must be pre-approved by Apple to sell the product, and each member of a dealers' sales staff must be trained by Apple's authorised trainers.
b) Inside, all stores must be kitted out with around £1,000 of advertising materials – £600 for a display stand and £400-£500 for a working demo unit. Discounting any potential cost for extra staff training, the marketing terms alone will cost dealers £1,000 per store.
So stores will need to look at,
That seems low, however,
This will polarise sales to the larger well funded stores, in addition to the normal high street Orange own branded stores which I assume will have to make a similar investment - in reality it will be a case of meet the targets or you are out as the investment will be met by Orange.
It will be interesting to see what terms Vodafone passes down through its Dealers, when it announces them later this month.
