Meeting demand when mobile mania hits – Part 1

Ahead of this year’s much-hyped iPhone 7 launch, die-hard Apple fans around the world were so desperate to be the first to get their hands on the new device some paid upwards of $395 to a stranger to queue up for them 48 hours before stores opened. Some Apple devotees in Sydney, Australia, were even offered $4600 to give up their spot in line with this mobile mania.

We witness a handful of these flagship device launches every year – think Apple, Google Pixel and Samsung S7. For customers, the goal is to beat the crowds and be the first to buy a new device in the first release. But for telco retailers, the number one challenge is ensuring availability of enough stock to keep up with this heightened demand – and CEOs are increasingly concerned that their supply chains are not up to this challenge.

These big launches are often the only time during the year when telco and carrier retailer CEOs are kept awake at night thinking about the performance of their supply chains.

The wireless supply chain is a complex web of vendors that manufacture and distribute the various parts a mobile device is built from. To the consumer, this behind-the-scenes process is invisible. The number of components at play within these international supply chains is staggering: in Q3 2016 alone, almost 363 million smartphones were shipped globally.

It’s these critical points in the sales calendar plus vast sales and distribution networks that put wireless supply chains in the spotlight. Telcos and retailers who have a reliable and consistent supply chain have a clear opportunity to attract customers and encourage them to switch providers, with the promise of the latest mobile phone.

In order to gain this competitive edge and build (and defend!) their customer base at these opportune moments, there are three major issues telcos and carrier retailers need to urgently address:

1. Constrained supply

It is vital to be able to offer enough stock to meet customer demand, as launches are a time when many consumers are willing to switch carriers and contracts to get their hands on a the latest smartphone. The best proven way to access more product from the manufacturers is a speedy turn-around-time on selling their product. Unclogging and automating problematic supply chains is critical to be able to offer customers reliable product delivery, as promoted at the point of sale, and win a greater share of product from the manufacturers.

2. Delayed internal processes

Internal negotiations over which sales channels get prioritised for limited product batches in the absence of agreed criteria can also hinder sales and introduce unnecessary delays. Telcos should conduct an audit of how quickly sales flow through their channels – for example, enterprise teams, online teams, franchisees, corporate-owned stores – to effectively allocate the limited supply of products. They must be seen to be meeting customer demand via whichever sales channel is fastest and an automated process can help with this.

Stay tuned next week for the second half of this story that will cover how dealers can use skewed incentive models in supplying mobile demand.

Dr Gregory Hill, Head of Analytics, Brightstar Global Services

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