MTS launches a new format of its own retail stores

MTS plans to open up to 1 thousand retail stores in a new format and twice the standard area in two years. They will replace some of the 3.2 thousand existing points. Other market participants note that large stores have become less in demand after the pandemic, continuing to optimize retail and reduce space. But experts admit that in the context of growing online sales, expanding outlets that actively sell services may be one of the few ways to attract customers and maintain profits.

MTS is launching a new format of its own retail stores “with an emphasis on customer service and digital products,” the company told Kommersant. In addition to smartphones, tablets and accessories, they will sell headphones and speakers, televisions, set-top boxes, products for the “smart home”, including, for example, vacuum cleaners, as well as digital products of the operator itself, for example, MTS Premium subscriptions. The first store opened in St. Petersburg. In total, MTS plans to open up to a thousand such points throughout the country in two years. Currently, the MTS retail network includes 3,200 own stores and 1,700 franchise points.

“We will partially replace old stores with a new format, opening retail spaces with an area of ​​50-100 square meters. m, while we will not reduce or increase the total number of stores,” Rustam Mustaev, operating director of the MTS retail chain, told Kommersant. The company believes that now they have the optimal number of points. According to Mr. Mustaev, the area of ​​a standard store is now 30–50 square meters. m. He did not disclose the volume of investment in one point and the project as a whole.

The head of Infoline-Analytics, Mikhail Burmistrov, believes that we can talk about 3.5 million rubles. and more investments per store. “Separately, the regular payment for renting one point will increase from 400 thousand rubles. for 40 sq. m up to 650–700 thousand rubles. for 100 sq. m per month. Repairing such an area with finishing costs at least another 2 million rubles,” clarifies DNA Realty CEO Anton Belykh. He considers MTS’s strategy “financially controversial” and doubts that the company will be able to recoup investments in repairs and expansion of space.

MegaFon told Kommersant that they launched a similar retail format in 2020: “We see that consumers are choosing a long-term customer experience in offline retail less and less often: as a rule, on weekends and more often in large multifunctional shopping centers.” The company considers the development of “traditional formats of communication salons” to be more effective.

Tele2 also believes that “the format of large stores has become less popular and effective after the pandemic,” their share fell from 10% to 1.5%. The company talks about a trend of reducing the average cabin area from 35 sq. m up to 29 sq. m now: “This year we optimized 10% of salons with expensive rent, but grew by 10% in a light format, increasing the share of smaller outlets.” In general, the total retail volume of operators is declining (see Kommersant on March 28).

Development Director of M.Video-Eldorado Boris Ogarkov confirms that “selecting and purchasing equipment online, mainly using a mobile device, is becoming more familiar to customers.” “But still, about 90% of transactions are carried out by clients using the retail infrastructure,” the top manager emphasizes. According to him, this year the company opened about 60 stores with an area of ​​500-600 square meters. m, which is on average half the size of standard objects.

At the same time, Anna Mankova, senior director of the retail real estate department of the Commonwealth Partnership, observes a trend towards expanding the areas of a number of brands: “Most likely this is due to the partial withdrawal of international chains and the redistribution of flows.” Mikhail Burmistrov believes that the potential for expanding the area of ​​outlets “is associated with the creation of full-fledged digital markets with a wider range and focus on the sale of goods for the smart home, with active upselling of services and subscriptions from ecosystem products.” These services are “highly in demand among certain consumer groups,” the expert adds. In his opinion, now such a strategy is “the only option left for networks of mobile device stores.”

Alexey Zhabin, Daria Andrianova