O2 parent company Telefonica Europe recently announced that in 2010 its revenues rose to €15.25 billion (£12.95 billion) and the UK retail arm of the business is becoming crucial to its wider success, despite tough trading conditions on the British high street.
General Manager of O2 Retail Richard Baylis tells Retail Gazette that, aside from the growing popularity of smartphones which now account for 70 per cent of all contracts at the group, providing a key point of difference is proving singularly essential.
“We are rolling out new-look stores that have live and digital displays, and customers are now encouraged to play and test out the new devices in shops,” he states.
“There is much more information available to them in a way they are used to receiving it.”
Since arriving at O2 in 2008 Baylis and his team have identified how they can change retail’s role in the shopping journey, and this vision is being acted out through these interactive stores and a change of staff profile in shops.
It is up to retailers to encourage customers to visit the high street, and Baylis considers bricks and mortar stores as an important cog in the overall retail multichannel machine, as long as they provide the correct services.
At the start of 2011 the firm announced it would be closing 40 stores this year and focusing on developing its new store format, but he explains that the plans are actually part of a business growth strategy.
“We want to make the reason for coming into store; advice, touch, experience and engagement - our skill is making everything join up and explaining to customers how everything works,” he said.
“To this end, we have introduced a new role called Guru, which is improving our level of service and educating customers to a higher degree.”
Around half of O2 Retail’s estate has been transformed to the new format and around 160 of these stores already have Gurus, but another 260 Gurus are expected to be added to the company’s workforce in the coming months.
The Gurus do not have sales targets, but they are heavily assessed on customer satisfaction and the employees require consumers to be positive and make recommendations if they are to achieve large bonuses.
Placing staff with technical expertise in stores so they can provide a more consultative service to customers, is a method that has it roots in the US thanks to moves by companies such as Apple and Best Buy, but it is becoming increasingly common with retailers across the UK.
“Unsurprisingly as the world becomes more complicated, customers are looking for simpler things,” Baylis notes.
“In order to deliver that we have had to make more time for our store staff so they can consequently have better conversations with customers.”
The push to create more Gurus also ensures this year’s store closures at O2 Retail will not result in wide scale job losses, and only single digit unemployment is expected across O2 Retail’s sales adviser network as a result of the business’s change of focus.
“The role has given our more tech-savvy staff and those who have a passion for technology a new career path,” Baylis said, adding that there could be opportunities to move into other divisions of the business thereafter.
“We are really excited about the opportunities and are initially recruiting internally for Gurus because Assistant Managers have been a good source in the past and we want to give current employees the best chance of getting jobs.”
Like many senior retail sector professionals Baylis shows a real passion for the industry he represents, but his years prior to joining O2 were spent on “the other side”, working for a range of technology businesses.
He started at printing and software group Xerox, where he stayed for 11 years and held various roles in the company’s finance, sales, marketing and services departments.
Running product marketing at Xerox’s small office/home office division gave Baylis his first experience of the retail industry thanks to some of the client base, but he moved on from there to hold consumer sales and marketing positions at Epson.
Before joining O2 in 2008 as head of its commercial planning and trading arm, he was Regional Director at Acco Brands, but after 20 months as General Manager of O2 Retail he now seems at home.
“Retail is a really exciting place to be - it is a really interesting space. You can be working on a three or five-year strategies one day, but then work on a short-term commercial deal the next.”
Any great business knows there is always room for improvement and that is, naturally, one of the major reasons behind the changes taking place at O2 in the year ahead.
Being in charge of a technology retail business, where innovation inevitably becomes the driving force for the organisation, Baylis should be more aware than most about the importance of not standing still, and his actions suggest this is the case.
“Comparing two years ago to where we are today, O2 Retail is a very different physical environment,” he explains.
“More importantly it is a different culture - it is very strongly customer oriented and my team has done a fantastic job in delivering that change.”
No matter how much the retail industry talks about the importance of customer service, multichannel capability, social networking presence or product offering, success in this competitive sector can essentially be summed up in one word - relevance.
Baylis agrees. “We still have a lot of work to do of course, but we must remain relevant to our customers.”