Case Study: Accessories & In-Store Marketing Program

Leading Integrated Service Provider Capitalizes on TESSCO Solutions

SunCom Wireless, a leading provider of digital wireless phone service and accessories, benefits from TESSCO’s Accessories and Merchandising Solutions.

Background

Since it commenced business operations eight years ago, SunCom Wireless has launched service in 27 markets, including 11 of the top 100 markets in the United States, and is licensed to provide digital wireless communications services in an area covering 14.8 million people in the Southeastern United States and 4.1 million people in Puerto Rico and the U.S. Virgin Islands. Today, SunCom Wireless Holdings, Inc. (NYSE: TPC), markets the SunCom Wireless brand and provides digital service in one of the nation’s largest regional territories – with nearly 800 points of distribution, including company-owned retail stores, independent dealers and direct sales associates.

Challenge

As a new wireless company in the late-90s, SunCom grew their customer base by delivering on its commitment to provide customers with the highest quality network, best products, as well as simple and straightforward service plans. With competition in the wireless industry intensifying, SunCom recognized that in order to provide further value to its customers, the Company would also need to provide the best accessories available on the market.

After completing an exchange of territories with Cingular Wireless and AT&T Wireless Services in 2005, SunCom was poised to create even more value for those customers that relied on the Company for premier international, national and regional calling plans. And with new applications and products introduced everyday, the technologies within the wireless industry were becoming increasingly complex. As such, it was as a growing, award-winning provider that SunCom Wireless sought the help of TESSCO to provide an accessory and merchandising program that could support its thriving wireless and integrated communications services business.

Methodology

With a brand tagline of “We Get It,” SunCom looked to TESSCO to help them uphold their endeavors to focus on delivering the best possible wireless experience for their customers – which included understanding the customer mindset and offering them world-class mobile devices and the accessories needed to complement them.

Russell Leboff, SunCom’s area vice president of sales, and his team, were eager to improve customer satisfaction by increasing operational efficiencies, as well as offering better breadth and depth of accessory offerings. “By adopting strategies planned by the TESSCO and SunCom teams and then collectively implementing them, we were able to offer customers reliable products and services that help ensure the best possible wireless experience,” explains Leboff.

Initial efforts focused on an overhaul of existing accessory activity and the development of a new in-store marketing program. Due to discrepancies between the availability of mobile device offerings and the number of accessories that should have been in place to complement them, TESSCO initiated a system by which SunCom’s inventory levels could be better controlled, managed and anticipated. With an impressive inventory management system in place, SunCom and TESSCO together ensured that SunCom could purchase the appropriate ancillary products for their wireless equipment, maximize accessory sales, while efficiently managing the inventory and ordering process for its retail operations.

By helping to determine the inventory needs in unique SunCom locations, the TESSCO inventory management system helped SunCom organize store locations, simplify the procurement process, and reduce costs and obsolete inventory. Streamlining the inventory process resulted in immediate and measurable results for SunCom, such as an increase in efficiency across the business that enabled employees to spend more time consulting and selling, and less time on accessory management activity.

To complement the inventory management system, TESSCO utilized a value-added solution that promoted visual merchandising. Designed to help SunCom easily determine when new product orders should be placed or when products are not selling as forecasted, the TESSCO in-store merchandising system utilizes a strategic matrix selection design that also creates an added convenience for customers and enhances the customer shopping experience. This TESSCO Accessory Sales System includes an extensive collection of visual merchandising displays such as wall systems, floor stands and countertop display methods – all of which help SunCom to promote cross-selling and repeat-selling through the use of graphics and educational information that a customer will find both helpful and compelling.

“In addition to a dynamic inventory management system and the TESSCO Accessory Sales System, TESSCO has helped us boost and maximize sales by providing custom-packaged, SunCom-branded products that are immediately ready for display upon arrival to SunCom locations,” states Leboff. “TESSCO has helped us differentiate ourselves from our competitors by staying ahead of the advancements in the wireless industry, as well as meeting and often exceeding the growing expectations of our discerning customers through the promotion of our high-quality, yet affordable private label brand.”

Results

Within the SunCom organization, encouraging, conclusive changes were becoming evident through the streamlining of business processes. TESSCO’s wireless accessories and merchandising solutions have had an enduring impact, enabling SunCom to experience benefits ranging from enhanced employee performance and productivity, reduced inventory management expenses, increased revenue, and greater customer loyalty and satisfaction. Results include:

• TESSCO’s strategic, tailored merchandising programs have enabled SunCom to maximize performance and profits – for example, while accessory attach rates have dramatically increased, operational efficiencies have also significantly increased.
• With TESSCO’s direction and a renewed focus on accessory sales at SunCom, significant cultural changes related to accessory sales have resulted in an increase of more than 146% at year end 2005.
• Improved inventory management allows SunCom to better understand customer purchasing habits, anticipate needs, and ensure that the products they want to buy are available when and how they need them – thus providing excellent customer support and experience.
• Value-added merchandising makes for a more enjoyable and organized shopping or browsing experience.
• SunCom maintains a competitive advantage by providing superior customer support and experience at the time of both sell and cross-sell.
• Increased ability to attract and retain customers – by having the tools and resources to satisfy customers before, during, and after the sale.
• Improved productivity in the areas of scheduling, product placement, shelving, stocking and information access.

“The results as noted above have continued to grow and we have new, aggressive goals of a 50% year over year increase in accessory revenue per month.  And while the revenue is welcome, we are even more pleased with the excellent customer experience this program is producing in our stores. These objectives were made possible through the superior efforts of SunCom’s sales and management teams in concert with the TESSCO accessory sales strategies and allow us to provide the highest quality products and exemplary customer service,” concludes Leboff.