AT&T Inc. is refining its retail strategy with its first flagship store, a location on Chicago's Michigan Avenue that goes beyond phones and tablets to show services such as fitness applications and "smartcar" features.
The 10,000-square-foot store, opening Friday in the shopping mecca known as Chicago's "Magnificent Mile," is three times larger than the average of the company's 2,300 retail outlets. Located across the street from Coach and Cartier stores, it has concrete floors, white plastic and reclaimed teak furniture with more than 100 video displays.
With the loss of its exclusive agreement to sell Apple's iPhone and a saturated wireless market that makes it hard to find new subscribers, Dallas-based AT&T is planning to use its stores to gain an edge against Verizon Wireless, Sprint Nextel Corp. and T-Mobile USA Inc. The move also pits AT&T against the standard-bearer in consumer-electronics retail, Apple itself.
"We are very different than Apple," Paul Roth, AT&T's president of retail sales and services, said in an interview. "In their stores, the product is the hero. This store is all about the experience."
The second-biggest U.S. wireless carrier is looking for ways to show investors it's a bargain. Investors are getting a 29 percent discount for AT&T compared to its telecommunications peers on a price-to-earnings basis, up from 18 percent at the end of last year, according to data compiled by Bloomberg. AT&T shares fell 0.4 percent to $36.69 Thursday in New York.
No shadowing allowed
Roth's plan is to blend the hands-on approach of Apple stores with a visually dazzling environment. He's requiring sales staff to greet visitors within 10 seconds or 10 feet after they've entered the store, to make them welcome without shadowing them, he said.
Emulating Apple doesn't guarantee success. Nike, Nokia, Microsoft and Sony have tested the brand-centered retail approach, with mixed results.
