With the opening of Salt’s new store on Zurich’s Bahnhofstrasse, the telecom company now counts 109 telecom stores across Switzerland. The trend is visible among other large telecom companies as well: Swisscom currently has 115 stores and Sunrise runs around 100 of its own shops. That means together, the big Swiss telecom companies have around 325 brick-and-mortar stores.
A journalist recently asked me to explain why there are so many telecom stores. In the digital age, signing up for a mobile plan online is convenient and can be done at any time. With that in mind, the strong emphasis by telecom companies on brick-and-mortar stores seems a bit behind the times.
Customers value in-person consultation
Why are there still so many telecom shops? In my opinion, the reason is that many customers want to be able to visit a store when they have problems with their phones. Stores make it possible to get the help they need from a human being. When signing up for a new mobile plan, the customer can ask questions and browse the store before completing the subscription.
My observation is that the absence of physical stores is a key reason why relatively few consumers in Switzerland have mobile plans from budget telecom providers like Galaxus Mobile, Gomo, Wingo, and Yallo. Budget providers have few or no brick-and-mortar stores that customers can visit for consultation.
Stores are more important than low prices
Personal contact continues to be an important factor for many telecom customers. When I ask people who use expensive mobile plans why they do not migrate to a cheaper offer, the reply is often that “I can visit the store if I have any problems.” Apparently, many consumers are prepared to pay much more for a mobile plan if it means they are able to get advice and help in person.
Many people might assume that the preference for stores is something that is only found among older consumers. But in my experience, that assumption does not hold water. I repeatedly observe that many young people are less keen on digital solutions than they are widely presumed to be. A substantial portion of younger people prioritize personal contact and physical solutions. A surprisingly large portion of the younger population struggles with using digital channels.
In the past, the primary purpose for telecom shops was to sell phones and mobile plans. At that time, customers in need of help were generally referred to a customer service phone number. But telecom companies have adapted to the changing needs. Today, customers who run into issues – such as problems with their phone bills – can get good customer support in person at telecom stores.
A profitable strategy
For telecom companies, this is a good strategy. If a customer visits a store and signs up for a mobile plan, that customer will often pay around 80 francs a month for their plan. On the other hand, plans sold through online stores generally cost just 20 or 30 francs per month – especially those sold by budget telecom service providers. One reason for this is the constant flow of online promotions. So having brick-and-mortar stores is a good investment for telecom companies.
Budget telecom providers aim to win new customers online only, and do not have any stores. The only exception to this rule is Yallo, which operates a handful of physical stores.
Personally, I have not visited a brick-and-mortar telecom shop in around 15 years – apart from media exchanges and other visits in my capacity as a telecom expert. I prefer to use digital mediums in many aspects of my life. I signed up for my mobile plan online with a budget telecom provider. But back when I last visited a telecom store, I was glad to be able to do so. I could exchange my defective SIM card immediately at the store instead of having to wait for a new SIM card to come in the mail.
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