Telecommunications provider Vodafone is investing its physical footprint despite the rise in digital consumption, on the back of a tie-up with Millennium Corp.
Contrary to what other service-based telcos in New Zealand are doing, Vodafone NZ says retail stores are still an important part of its business, albeit consumers now visiting its stores for different reasons compared to five, 10 years back.
Vodafone plans to expand its store network, by opening four new stores; three in Auckland - Britomart, Newmarket and Sylvia Park, and another in Christchurch CBD. It will also pilot its new concept "customer service supercentres" in three stores.
The private company, which has largely followed the moves of its multinational parent owner Vodafone Group, plans to refresh its current 67 stores over the next two years.
About 20 of Vodafone's current retail stores are company-owned, 22 are run by Digital Mobile under Millennium. It also has 24 franchised stores. The focus on its physical expansion comes following a partnership with private investment company Millennium Corp which has seen the company increase its stake in Digital Mobile to 50 per cent.
Millennium operates a portfolio of businesses in the telecommunications and technology sectors, including Digital Mobile, which Vodafone has held a 25 per cent stake in since 2001.
Vodafone said shoppers visited its stores to play around with the latest phones and technology or seek to advice. Consumers were no longer primarily visiting stores to pay their bills or top up their pre-paid phones as they once were.
Vodafone NZ consumer director Carolyn Luey, formerly general manager of MYOB, said the rise of online shopping and digital consumption had changed consumer behaviour.
Retail stores still had an "important part to play in an increasingly digital world", she said.
"Customers are now doing their research online first before coming in-store to purchase or vice versa: experiencing the technology in person first before purchasing online. This has led us to rethink our retail offering to respond to our customer needs.
"While some customers prefer to talk over the phone to our service staff, others prefer to visit someone in-store, and yet another group would rather interact with us online ... we are aware of the need to increase our investment in an overall omni-channel experience incorporating all different ways of interacting with our customers, our investment in our retail channels is just a piece of this puzzle."
Luey said the 50-50 joint ownership of Digital Mobile would be governed by a board made up of three directors from Vodafone and three from Millennium.
Millennium director of ventures, Ajay Sharma, said the joint venture would enable the organisations to be flexible when operating stores and implementing new technology.
"Creating a single management and operating model for all Vodafone retail stores across New Zealand will deliver a step-change in productivity, efficiency and people capability."
Vodafone would not reveal how much it plans to spend on four new stores or to refurbish its existing network, but said it was "significant".
"Opening a retail store is a big investment and not a decision we make lightly. We have carefully chosen the locations for our flagship stores and have made a long-term commitment to investing in them," Luey said.
Vodafone was following the lead of other international telecommunications companies were investing in their physical footprints, Luey said, including opening a range of different format stores, such as standalone branded stores, self-service kiosks or kiosks within other retail brands.
"We think there will always be a place for the retail store in providing the opportunity for face-to-face interactions."