Big box shoppers more likely to buy unlocked phones, switch carriers, J.D. Power says

While the majority of Canadians purchase mobile phones from carrier-branded stores, those who purchase from big box stores are more likely to purchase an unlocked phone and more likely to switch carriers as a result, according to a new study released today by American marketing information services provider J.D. Power and Associates.

Based on interviews with more than 6,000 Canadian wireless customers, the Canadian Wireless Purchase Experience Study concluded that 57 per cent of Canadian wireless customers had purchased their phone from a branded carrier stores, while 25 per cent had purchased their phone from a big box store, and 17 per cent from a specialty electronics retailer.

However, a full half of big box customers had purchased an unlocked device, compared with 44 per cent of specialty electronics customers and 28 per cent of carrier-branded customers.

As you might expect, consumers with unlocked phones are more likely to switch carriers than consumers with locked devices, J.D. Power said in a May 12 release discussing the study, with 24 per cent of customers telling researchers they “definitely will” switch carriers within the next 12 months (only eight per cent of consumers with locked devices said the same).

In a statement, J.D. Power director Adrian Chung noted that customers have good reason to purchase an unlocked phone: It places more power in their hands, making it easier to switch when a competing carrier offers a lower price or more valuable data plan, though the survey, intended to measure consumer satisfaction with Canada’s wireless service providers, contains a silver lining for them.

The survey, which also discovered that Regina-based SaskTel, Montreal-based Vidéotron, and Telus Crop. subsidiary Koodo Mobile have the highest customer satisfaction ratings among wireless service providers, found that on average, customers were more satisfied when purchasing their phones from carrier-branded stores and specialty electronics retailers.

J.D. Power’s study measured satisfaction using six factors – store representative; online purchase; phone purchase; facility; offerings and promotions; and cost of service – assigning each carrier and each method of purchase an experience satisfaction rating out of 1,000.

Specialty electronic retailers had an experience satisfaction rating of 796, while carrier-branded stores had a satisfaction rating of 784 – both much higher than the 737 rating enjoyed (or not) by big box stores.

The reason for this 59-point performance gap between specialty retailers and big box stores was the in-store experience, J.D. Power said, particularly when it came to the number of times a customer was greeted, notified about possible extra charges, or given an explanation or demonstration of the device or devices they were interested in.

For example, specialty electronics retailers had an average store representative greeting rate of 78 per cent, and an extra charge notification rate and device demonstration rate of 72 per cent each. Carrier-branded stores, meanwhile, had a greeting rate of 66 per cent, an extra charge notification rate of 68 per cent, and a device demonstration rate of 69 per cent; while big box stores had a greeting rate of 51 per cent, an extra charge notification rate of 58 per cent, and a device demonstration rate of 62 per cent.

Big box retailers also had lower offering and promotion satisfaction numbers – that is, they offered customers fewer appealing phones, tablets, and equipment to choose from.

The lesson for carriers, Chung said, is that if wireless service providers want to retain customers and encourage return visits, they need to make sure their in-store retail experience demonstrates value – in terms of both service and products offered.

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Jim Love, Chief Content Officer, IT World Canada

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Eric Emin Wood
Eric Emin Wood
Former editor of ITBusiness.ca turned consultant with public relations firm Porter Novelli. When not writing for the tech industry enjoys photography, movies, travelling, the Oxford comma, and will talk your ear off about animation if you give him an opening.

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