Distribution is the next battleground in Canadian wireless (Loblaws sends out request to carriers)

Ian Hardy

September 14, 2010 5:07 pm


Over the last year we’ve seen the Canadian wireless market heat up. New entrants such as Wind Mobile, Public Mobile and Mobilicity have all launched their service. Videotron and SaskTel just launched their new 3G+ networks, MTS and Shaw will be going live soon as well… the Big 3 (Rogers, Bell and TELUS) and their flanker brands (Fido, Chatr, Solo, Virgin, Koodo) have all in someway adjusted their pricing.

So competition is certainly increasing in Canada and the consumer is benefiting. We’ve got more options of who we want our wireless provider to be, the monthly plans and upfront costs for devices are dropping, and consumers are thinking twice before signing a lengthy contract. Before the AWS Spectrum Auction started the Industry Minister said that “Our government’s intentions are clear: to achieve lower prices, better service and more choice for consumers and business. We believe in relying on market forces to the maximum extent feasible because competition benefits consumers, and consumers benefit most when markets are as competitive as they can be.”

A few weeks ago the CRTC released their “Communications Monitoring Report” which showed at the end of 2009 there were 23.8 million wireless subscribers in Canada. By 2014 the number of subscribers is expected to increase to 30.1 million. The trend is growing and more people are adopting mobile phones and getting rid of their landlines. The wireless players are all working hard to grab our attention and the next trend we’ll be seeing is where customers can purchase a device. Distribution is key. Distribution is the next battleground in the Canadian wireless scene.

Other than corporate owned or franchise owned stores, the carriers currently have several partnerships to distribute their products in retail locations like Best Buy, Walmart, The Source, Future Shop and mall kiosks. The carriers need to have immediate, huge scale, overnight points of distribution with other reputable brands. We’ve already seen a glimpse of this and here are a few examples:

- TELUS purchased 113 Black’s Photo locations almost a year ago for $28 million
- Rogers partnered with Sony Style locations to distribute products
- Public Mobile to start selling at Gateway Newstands
- Wind Mobile entered an agreement with BlockBuster Video
- Canada Post issued a request for proposal about selling wireless in 2011
- Rogers started a pilot project with Shopper’s Drug Mart
- Public Mobile starts a trial with Money Mart

The carriers want to be where you are all the time and are turning to other locations not just for reach, but because some customers feel intimidated/overwhelmed when they walk into a store. Psychologically we buy from who we trust and who we’re most comfortable with.

More distribution channels are opening up and they’re coming fast. We’ve been informed that one of them is Loblaws Supermarkets. They have over 1,000 grocery stores across the country and have put out a request to the carriers looking for a proposal for them to come in. A leading Canadian company is looking to give up some of their retail space and possibly take a greater piece of the wireless pie (that goes beyond their current PC Mobile offerings). So you can bet that a national brand like Rogers, Bell, TELUS or WIND will be located in the same place you purchase your groceries.

But it’s not just about Loblaws… the distribution battle will have a trickle effect to others such as Home Depot, Sobey’s, Metro, Dollarama etc. Access to purchasing a wireless device and getting support will be easier… and will be everywhere you turn in a matter of months.

  • Alex

    Its a good thing if they sell vouchers but im sure selling the actual service is a good idea since there will people that dont know what they are talking about selling services to cutomers.

  • Jordan

    I can’t wait for the first ridiculous lawsuit of someone spilling sauce on their new phone and suing Loblaws for some reason.

  • Terry

    Good news I suppose, but since this is all private industry selling space, money is the only thing that talks, so in the end Rogers, Bell and Telus will most likely continue their monopoly while the smaller new companies struggle to find mroe distribution methods and you can bet once the big three make those deals they’ll do everything they can to cut off consumer access to the new companies even more.

  • Regulator

    It’s a good idea if they had dedicated staff to support and sell phones there like a kiosk. If not I’m not grabbing the lastest smartphone with my veggies.

  • Natasha

    Omg this is the best thing Iv’e heard all day… I certainly will wanna go grocery shopping now : D

  • ONO

    oh no, more improperly trained cell phones reps

  • Steve

    from reading it I thought that the carriers will have a store within Loblaws, not loblaws clerks selling phones

  • northstar_86

    My local loblaws once had a bell store and it is now a chocolate store in the parking level. That loblaws also has a pc mobile kiosk, very small though. Maybe those carriers will launch with RCSS (real canadian superstore)which is under a loblaws banner.

  • schultzter

    Loblaws already has a mobile brand, Presidents Choice (ofcourse) Mobile that’s basically Bell. My parents use it and for them it’s great. The phone is basic and simple and when they do their groceries they can top-up their phone. I think there’s a large part of the un-tapped market that can be accessed this way. The people who will do their research and go to a corporate store knowing more than the reps already have the latest iPhone/Android phone.

  • Sid

    Would be sweet to pickup a $500 phone on one of Superstore’s no tax weekends.

  • Rocco StiffReddi

    Nice! pitty Wind will not even try to get in there.. You must be Canadian, they are not. On a brighter note I hear Jabroni is able to walk again after uncle swarie tore him a new one for being a pathetic spokesman for HIS company.

  • Alex

    My experience is that the representatives at Loblaws know more than the ones at Walmart. In fact sometimes you can’t even understand what they are saying but that’s not their fault.

  • DAvid

    When did WIND become a national carrier? Loblaws has too many stores in areas not covered by WIND to make this a chain-wide reality. So the question becomes that of having the product in some stores only, having unsalable product in some regions, or entering into an arrangement with one of the big three for a discount brand.

    My guess is the latter.

    DAvid

  • malingerer

    Distribution is the next battleground in Canadian wireless??? It’s always been the battleground.. If you don’t have allot of POS selling your products it doesn’t matter how good it is..

  • Sam Luu

    Bell has made a big push recently to the detriment of Rogers when they purchased the Source chain of stores ousting Rogers’ offerings from the chain at the end of 2009. They also made inroads by offering their phones at HMV’s.

  • ursa

    At what point does more become too much distribution. At the local mall there are 3-4 places to purchase a phone from the big three (T-booth, BB mobile, The Source, Blacks, a Telus store, Koodo kiosk, Virgin Kiosk). I’ve always thought that really they’re just caniballizing their own sales.

    What other consumer platform has this much retail space? For video games you might have one dedicated store plus maybe a department store. For music – maybe one retail outlet. There aren’t 3 places to buy a Sony TV. Add in the dealers plus a web channel and if I want to get a phone it’s really not that hard to do so.

    Some will say that this is blocking out of the new carriers – but this has been the case for 6 plus years.

    Carriers have tried selling through Zellers, Staples and a number of other retailers work – and it hasn’t. These marginal stores don’t get enough sales to keep stock current, nor can the staff be trained to a reasonable degree. (to be fair – they have to know more than cell phones)

  • Zeake

    If you build it, they will come!

  • Kathryn

    @Rocco StiffReddi: I didn’t know Loblaws only carry Canadian products in their shops ? Also, i believe they have recently acquired an Asian supermarket chain name T & T Supermarket. I think you comments contained racism. just a reminder, the landlord of this continental are indeed Native Indian.

  • Tolan

    I agree distribution will be the battleground. What trally irks me is the ignorant people who spout off incorrect facts. There are no monopolies in the wireless sectors in Canada. There are dominant players but no ONE company as per a definition of monpoloy.

    Def: n economics, a monopoly (from Greek monos / μονος (alone or single) + polein / πωλειν (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it …

    We have laws to stop monopolies and they work. Don’t cofuse 3 large incumbents dominat play on the market as a “monopoly”. All of the carriers no matter how big or small will be vying for a stake in large distribution channels to espose their brand to more customers. Smart business sense. Wind in Blockbuster was a gamble now seeing now that Blockbsuster is in serious finacial trouble…