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Spark to buy back stores in attempt to connect with customers, promote Spotify and Netflix

Monday 19th June 2017

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Spark New Zealand is planning to buy back all its stores from external management as it works to connect better with customers bored with online shopping.

The telecommunications provider directly owns 36 stores, while 26 are under management by its dealer partners Leading Edge and Orb, and Spark wants to own all 62 retail stores by late 2017. It doesn't plan to close any stores and employees in the bought-back stores will be able to keep their jobs, it said.

"While e-commerce and online channels are becoming a fundamental way that businesses reach their customers, we’re seeing a resurgence in the importance of physical locations to complement the digital experiences that businesses provide," general manager of customer channels Grant McBeath said in a statement. "For instance, while many customers are choosing to buy online, the option to visit a physical location to ‘click and collect’, exchange or return items, or simply get the opportunity to touch and feel a new device prior to purchase is increasingly seen as an attractive choice.

"Even dominant online retailers such as Amazon are building and buying established high street stores that they use both as stock warehousing and as shopping destinations."

Leading Edge and Orb will continue to run Spark's business hubs and hybrid stores, which offer consumer and business services, as local small business owners prefer to deal with a local business owner, Spark said.

Owning the entire retail store network will give Spark the opportunity to promote app and streaming services such as Spotify, Lightbox and Netflix, it said. Spark offers free Spotify Premium to many customers with monthly phone plans and free Lightbox to all home broadband customers, and in February began offering a year's free Netflix to customers who signed up for a two-year home broadband plan.

"While our dealer partners have done an awesome job for us, by bringing our stores back to direct Spark ownership, we can create consistent experiences for our customers: they will have access to the same processes and options, no matter which store they visit, or whether they’re trying to do something online or in person," McBeath said. "Ultimately, we want to offer seamless experiences across all our channels, with the option to shift easily between digital and human interactions, no matter what you’re trying to achieve."

The shares dipped 0.9 percent to $3.78 and have gained 12 percent this year.


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