Sprint Corp., Sprint PCS and Radio Shack are planning a $20 million ad campaign showcasing the telecommunication brand's presence in the Tandy Corp. chain.
The campaign, funded with $10 million from Radio Shack and $5 million each by Sprint long-distance and Sprint PCS, signals the beginning of a new distribution model for telcos and a new revenue stream for Radio Shack.
Created by Lord Group, New York, the ads will rotate as part of Sprint's NFL "Monday Nights Free & Clear" promotion from Hal Riney & Partners, San Francisco, which includes spots for both long-distance and personal communication services.
EVENT SET FOR TIMES SQUARE
Sprint Chairman-CEO William Esrey, Sprint PCS CEO Andrew Sukawaty and Tandy Corp. Chairman-CEO John Roach will be on hand for a Times Square event unveiling the deal Sept. 24. An invitation promises "something special landing in Times Square." Sprint officials declined further details.
Sprint PCS--a joint venture between Sprint, Tele-Communications Inc., Cox Communications and Comcast Corp.--and Sprint brands will be housed in a store within a store at Radio Shack, which has 6,000 outlets in the U.S.
For Radio Shack, this is the latest attempt to move its business away from the hundreds of small and less profitable items for which the retailer is known.
Sprint and Sprint PCS are, in turn, looking for new ways to sell their products, and see retail as a wide-open market.
Selling packaged communication services at everyday retail stores is gaining momentum, said analyst Jeffrey Kagan of Kagan Telecom Associates. For instance, MCI Communications Corp. sells cellular and paging services inside Sam's Club stores, and BellSouth is test marketing the sale of second phone lines in a box on the shelves of Kroger Co. grocery stores.
"The next generation doesn't think about communications the way our generation does," he said. "They think of communication services differently and they're buying them in a totally different way. It's not inconceivable that at some point you'd never use the phone company to order service, and instead use these retail channels."
Traver Kennedy, director of worldwide research for Aberdeen Group, Boston, said the most successful telco retail efforts will carry a straightforward and simple marketing message.
"I believe many carriers will come forward with just such offerings over the next six to 12 months," he said. "The big advantage for consumers is they get the control and convenience they're looking for without having to navigate the labyrinthine system it has taken to order telecom service in the past."
Copyright September 1997, Crain Communications Inc.