EVERY CLOUD HAS A SILVER LINING

EVERY CLOUD HAS A SILVER LINING

John Ozimek, associate director at Mi liberty

John Ozimek, associate director at Mi liberty

Mobile beats the recession panic

With the headlines dominated by talk of recession and with markets from Tokyo to London going up and down like yo-yos at a toy convention, it’s understandable that there’s a whiff of panic in the air. Many people who remember the last recession or when the dot.com bubble burst in 2000 have already started wringing their hands and proclaiming doom and gloom.

But mobile isn’t like every other business. Look closely (something any level headed business person should be doing anyway, but I’ll leave my

soapbox for later,) and there’s plenty of data suggesting that mobile will ride out the coming storm better than most industries. So perhaps now is the time to put on your marketing hat and see if there really is a silver lining for your business in the cloudy financial skies ahead.

Generally, the UK retail sector is facing tough times. High street sales fell in September and October, and some of the bigger retailers are already warning the market that revenues will fall significantly. So far, so obvious. But when it comes to mobile phone sales, it’s a different picture entirely. So far this year sales of handsets have actually risen by 14% compared to 2007, even though Europe has pretty much reached 100% market penetration. So while some industry analysts think that sales will weaken, there’s not the same level of pessimism we are seeing elsewhere. In their latest guidance, ABI Research said that mobile has ‘proved to be on of the most resilient sectors’. Analyst heavyweight Gartner is a shade less confident, but even it is not forecasting falling sales.

What we will see is changes to the types of devices and services sold, and probably changes to how people will use their phones. Already sales of smartphones are dropping off, and cheaper handsets (mid tier in mobile speak,) are selling strongly. Nokia has already announced that its 2009 line up will be heavy on these kinds of devices, and with services like Comes with Music and Nokia Maps, the company is making sure there are plenty of value-add reasons for consumers to keep buying handsets.

The other selling point of a less flashy mobile is that they generally come with shorter contracts and lower tariffs; that’s good in a difficult economy, as consumers start to look for more flexibility and value. These are also the handsets that are going to be pushed as free or low cost upgrades, which is always an attractive sell to consumers especially as we start to reach Christmas, a traditional time for upgrades and shiny new handsets from Santa.

Which gives a good clue to what any business can do to keep customers happy. By streamlining what’s on offer, the consumer has a much simpler decision to make, meaning they are more likely to make it. Now is a good time for smaller resellers and retailers to make sure they are getting information about their products out to as wide an audience as possible. I’ve previously talked about the potential for eBay to be a valuable marketing and sales tool, and as people start to search online for the best deals, it’s a good place to start. Also, price comparison sites are going to be important over the next year or so; the big ones, like MoneySupermarket.com, PriceRunner. co.uk and DealTime.co.uk are expecting to increase their market share as consumers become more choosy. All of these require a good presence on the web.

Of course, there will still be a place for the feature phones like the iPhone and Blackberry; the luxury end of the market isn’t going to disappear. These kinds of devices have always been marketing tentpoles, products that are significant enough that you can hang your entire marketing campaign around them. Look at what’s being planned for Christmas and O2 has the iPhone, Vodafone will have the Blackberry Bold, T-Mobile gets the Google G1 and Orange is partnering with Nokia on its ‘Comes with Music’ devices. Plus, the Nokia N96 and Sony Ericsson Xperia are already creating plenty of buzz in the consumer press. For gadget freaks and trendsetters, it’s business as usual.

People like to talk. Mobile phones are seen as a necessity by most people, rather than a luxury. That in itself is going to keep the industry buoyant in the long term; you may stop downloading games, ringtones and video clips, but you’ll still make calls and send texts. In many ways, market downturns are often about confidence, and confidence comes from how you communicate with your audience. If consumers what something enough, they’ll find the money somewhere. Just last week in Japan, jeweler Tiffany & Co launched an ultra limited-edition handset encrusted with 537 diamonds. Despite an £83,000 price tag, the phones sold out in lass than three days. I doubt those customers will be keeping an eye on their pre-pay credits.

 
 
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