• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

ONE STOP CELL SHOP: Wireless Chain Enters Minnesota, Aiming to Fill a Niche Between Carriers' Own Stores and Big-Box Retailers By Offering Many Choices Under One Roof.

Posted on: Tuesday, 14 February 2006, 06:00 CST

By Leslie Brooks Suzukamo, Pioneer Press, St. Paul, Minn.

Feb. 14--When Charlie and Erin Zosel went shopping for a new cell phone for Erin, the Apple Valley couple bypassed the stores of the big wireless carriers and stopped at a new Wireless Toyz store in neighboring Lakeville.

"We're kinda shopping around and we saw the place has everything under one roof," Erin, 29, said.

Wireless Toyz, a retail chain out of Farmington Hills, Mich., says it is bringing a new idea to the Twin Cities market -- the wireless superstore. The retailer is expanding quickly nationwide and in Minnesota. It already has stores in Lakeville and Minneapolis and new ones promised for St. Paul, Champlin and Rochester this year.

For consumers, the idea can be a time-saver. Shopping for cell phones is not easy. Most people shop at a carrier's own stores, having to hop in their cars to compare plans and prices.

The other options include visiting a big-box retailer like Best Buy or a small specialty store that may carry only one or two of the four major carriers, or surfing each carrier's Web site.

The Wireless Toyz store in Lakeville carries camera phones, smart phones, music phones and popular thin phones like the Razr. A long counter displays phones and plans from Verizon Wireless, T-Mobile, Nextel and Sprint side by side, along with prepaid services that cater to young people like Virgin Mobile and Boost Mobile. The store also sells satellite TV and radio service.

That's a lot, but it's not quite everything. The nation's largest carrier, Cingular, has a separate deal with Radio Shack to sell through its 5,000 stores nationwide that started in January, spokesman Chris Comes said.

Wireless Toyz also is waiting to sell the new Mobile ESPN, an offshoot of the cable sports channel. So far, ESPN is available through Best Buy, which also carries Cingular, Sprint and Verizon Wireless.

But Wireless Toyz is thinking big. The state's main franchiser said he wants Minnesota to have 25 Wireless Toyz stores within five years.

"We think we've got the right model to be that one-stop shop," said Doug Imholte, owner of the Minneapolis store on East Lake Street. He's negotiating for locations in St. Paul and Champlin.

"This industry grew up as being very carrier-specific," Imholte said. "We're very customer-specific. We ask what's the right service for them? What's the right plan for them? What's the best phone for them?"

Carriers like Verizon Wireless and T-Mobile see Wireless Toyz not as competition, but as another way to sell their plans. The plans cost the same as at the carriers' own stores but Wireless Toyz tries to sell the phones themselves for less. At the Lakeville franchise, for instance, a T-Mobile Nokia 6101 costs $50, versus $100 after a rebate from T-Mobile online, said Ryan Varnes, the owner.

Wireless Toyz's main retail competitors -- Radio Shack, Best Buy and Wal-Mart -- are far larger but not focused exclusively on phones.

Best Buy considers that a plus. Best Buy customers are interested in making all their digital gadgets work together, spokeswoman Paula Baldwin said. "They view their wireless selection as a part of their broader technology choices."

But the big stores' size may work against them sometimes.

"This is a lot quicker than standing in line at Best Buy; it's a lot less congested," said Dave Olson, 47, who stopped at the Lakeville store, located only about a mile from his home, for a replacement phone for his wife. "This is about convenience."

Store owner Varnes, 28, said he chose the outdoor mall on 160th Street near Cedar Avenue because the corner had heavy traffic and stood in front of a new Kowalski's supermarket.

Varnes boasts of speedier service than his big-box competitors. "You go into (the carriers' stores) and they put you on a clipboard. I guarantee you, no one is going to have to put their name on a clipboard here."

Wireless Toyz is new enough that some customers are confused by the name. Olson said when he first drove by he thought the store sold remote-control toys.

Founded in 1995, Wireless Toyz began franchising in 2001 with eight stores in Michigan. It expanded into four new states the following year and has doubled the number of stores every year, said chief operating officer Richard Simtob.

The company started 2005 with 62 stores and ended the year with 124 and systemwide revenue of $100 million, Simtob said. By the end of 2006, the company expects to have 225 stores and revenue of $150 million, the executive said. Privately held Wireless Toyz does not disclose profit.

In customer satisfaction studies, wireless specialty stores and general retailers tend to do better than wireless carrier stores, said Charul Vyas, an analyst at NPD, a research firm based in Port Washington, N.Y.

The wider selection and a focus on service give them an advantage over carriers, Vyas said.

Specialty stores also can offer more convenient locations and more hand-holding for the wireless novice, added Tole Hart, an analyst at Gartner Inc., a technology consulting firm in Stamford, Conn.

But it's anybody's guess whether cell phone customers will embrace the superstore idea. Most independent resellers of mobile phones are small mom-and-pop operations, Hart said. As for Wireless Toyz, "They've got their work cut out for them," he said.

Leslie Brooks Suzukamo covers telecommunications and technology and can be reached at lsuzukamo@pioneerpress.com or 651-228-5475.

-----

Copyright (c) 2006, Pioneer Press, St. Paul, Minn.

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

NYSE:STA, NYSE:BBY, Unknown:VRZ, Unknown:TMO, NASDAQ-NMS:NXTL, Unknown:VGN, Unknown:ABC, NYSE:WMT, NYSE:IT,

Source: Saint Paul Pioneer Press (St. Paul, Minn.)

More News in this Category