Inside job



In what could be the first partnership of its kind, a European stationery store has begun trialling a shop-in-shop concept with a mobile phone retailer.


The collaboration sees the Swiss office products retailer Office World sharing its retail space with mini outlets run by The Phone House.


Offering tariffs, handsets and accessories, as well as broadband packages, the deal suits both parties, with the stationery firm increasing its product range while the phone retailer taps into a pool of new customers, boosts its brand and increases its presence in valuable retail locations in the region.


The Phone House will open up its first two shop-in-shops inside Office World stores in Zurich and Geneva. It was, says Office World CEO Matthias Baumann, the diversity of products offered by The Phone House that attracted him to the idea.


It’s a very good partnership because The Phone House provides us with all the different mobile providers," says Baumann. "It supports all the different providers and this was important for us because our customers can belong to a variety of mobile phone partners."


Office World has looked at offering mobile phones itself in the past, but the complex nature of the business led it to look at a proposal by The Phone House to strike up a partnership, and Baumann is well aware of the attraction that his customer base offers to the mobile phone industry.


The B2B sector is quite difficult for mobile phone companies to go into," he says. "We serve SME office customers and private customers, but the private customer mobile phone market is very competitive so now they have to target other groups.


They can find these people in an Office World superstore and that’s the reason why this co-operation will be very successful. The Phone House was looking for this kind of customer and we were looking for a strong partner with a wide assortment."


Fully integrated


Measuring about 15m2 to 20m2 and with its own point of sale, the fully branded shop-in-shop is designed to be "fully integrated and visible" and if, successful, will be extended to some of the other 18 stores operated by Office World.


"It has started well and we are happy, but it needs a few months to see if the combination is really as good as we thought.


"It’s a strategic fit that is interesting for both and gives us a good base to go on further. The main products are mobile phones but we could also bring in more services. They could provide our customers with some special telecoms services – the service business is very interesting."


The store-in-store partnership throws up some interesting possibilities. If the Office World/Phone House concept can work then there may be opportunities for other businesses keen to target OP customers.


"I think this could work in other areas, but only with really good companies that are focused on our target group", says Baumann. "I don’t think it would be possible to have too many in one store. Ultimately, it’s Office World with some competent partners inside. The main question is: ‘What are the needs of our customers?’ And can we find a solution to this need in our shop?


"I think the trial period is necessary with this concept and it is important not to invest a huge amount of money in it at the start. Have a trial period and then make a decision – the market changes so fast that it is a good idea to at least try an innovation like this. When you know the customer likes it, it makes sense to go for it. This is our idea behind running a business in Switzerland."


Lucrative space


Owned by Carphone Warehouse, the largest mobile phone company in Europe, The Phone House is well established in Switzerland, but it is looking to expand – which can be tricky when the hunt for prime retail space in shopping centres is so competitive.


Looking for a way into the lucrative shopping centres around Germany and Switzerland, The Phone House began the hunt for a retailer that would work well with a shop-in-shop concept.


It was also looking to put a foot in Glatt Center, the biggest shopping centre in Zurich, and Office World – with its established store already operating in the lucrative mall – fitted the bill perfectly.


"If it works, and it looks like that at the moment, then we will expand into the other shops," says Silvio Mariani, commercial director at The Phone House. "This is an interesting opportunity to enter other Office World stores and gain retail space in some important locations.


"Office World sells everything around OP but the only products missing for a SoHo (small office/home office) or SME shopper are mobile phones and telecommunications. It makes very good sense that we come together and give the customer the opportunity to buy everything at the same place."


Mariani is keen to push his company’s brand onto the Office World marketing, including the OP retailer’s website, catalogue and customer correspondence.


"We have to let the customers know that we are operating inside Office World. The shopping centres won’t allow us to advertise our presence at the moment but it needs to be communicated. We also need a good place in the store, somewhere that customers can immediately see us."


Mariani, who has not heard of any other such collaboration in the huge Carphone Warehouse Group, says he aims to see the idea extended to between ten and 12 Office World stores. The Phone House will run promotions for Office World customers to emphasise the partnership and hopes to become known as the Office World mobile phone and telecommunications provider.


"There are many things we still have to work on to get our brand known with customers. If the partnership continues as it begun, then it will be very strong in the future, and we would like to expand in the Swiss market. I am very positive about this, we really fit together."