Managing channel conflict is a key issue for mobile retail distribution

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The issue of managing channel conflict is one of the most critical in the entire mobile distribution arena, according to a new report from INFORMA TELECOMS & MEDIA, as leading players in the value chain seek to integrate the direct and indirect routes to market.

With direct retail sales accounting for some 30% of the total by 2009, or US$46 billion worldwide, the challenge for operators, vendors and content providers is how to deliver mass market services in the most effective way. “Probably the main enabler for this is communication, both vertical - to and from the supplier, and horizontal - between the different channels,” says the report's lead author Richard Jesty. By clearly communicating its goals and objectives, and then underpinning these with guidelines such service level agreements, mobile value chain players can help to manage the potential disruption of traditional 'bricks and mortar' retail channels by the newer forms of distribution.

A powerful driver for this trend towards direct forms of retailing is the increasing importance of mobile content in the merchandising mix over the coming years.  INFORMA TELECOMS & MEDIA estimates that around 95% of mobile content is distributed directly today - for example by premium SMS or direct response to a call centre.  To reach a mass market audience, mobile value chain players need to get a balance between this kind of direct delivery and indirect delivery via distributors and retailers.  The critical factor here for all players is how to put mobile services such as games or music in front of consumers on the high street or in a shopping mall.

One way of doing this is to set up multimedia kiosks in retail stores so that consumers can 'browse and buy' online using a touchscreen and then download content to their phone via a short range link such as Bluetooth.  Another way is to distribute mobile content in a pre-packaged form so that consumers can pick it up in a self-service environment from a supermarket or high street store.

“We're seeing an emerging trend for music and games to be offered on removable memory cards which can used in mobile phones - but it's still early days for this kind of product,” comments Richard Jesty.

This new breed of distribution channels includes developments such as installing multimedia terminals in convenience stores, or offering mobile prepaid top-up services through bank cash machines. This trend has channel management implications for vendors and operators, since the commercial terms offered to each type of channel will need to be appropriate to each trading environment. There are also implications for the technical infrastructure and service platform, because service delivery can take place instore, via direct mail or via over the air downloading.

Equally, the increase in importance of packaged software being sold through supermarkets and other national chains will call for a new supply channel involving logistics and distribution
specialists, and requiring a new range of value added services from these players.

The new strategic report from INFORMA TELECOMS & MEDIA (Mobile Distribution and Retail 2005) is published this month, and covers the mobile distribution and retail industries worldwide, bringing together Informa Telecoms and Medis's latest forecasts which are based on its ongoing programme of research amongst key players in the mobile business. A feature of this research is the online survey of telecoms professionals worldwide.  In addition, a number of case studies of leading edge practice are presented, illustrating current themes and trends in the market, along with selected profiles of leading players.

The report is available for purchase at:
http://click.cminteractive.com/?1fH0wzLX=3504