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Despite dire predictions that brick-and-mortar stores are doomed to suffer the same fate as dinosaurs, this simply has not come to be nor will it. Take a look at retailers such as Ulta, Dollar General, Target, Aldi and others who continue their push to open new stores. And we certainly can’t ignore e-commerce giant Amazon’s launch of retail locations or its acquisition of Whole Foods to establish the company’s physical presence. If you look at what these organizations are doing, you will find that the recent brick-and-mortar renaissance can be attributed in large part to retailers aligning their in-store and digital efforts in a way that provide an integrated, satisfying customer experience. The power of the storefront has not escaped the attention of mobile operators in the United States, either. T-Mobile, for example, has executed an extensive expansion of its retail outlet footprint, reporting in February 2018 that it had opened nearly 1,500 new T-Mobile stores in 2017 and would continue that momentum. On the surface, the revived retail storefront story is great news for mobile operators. I think we can agree that having the opportunity to provide an outstanding face-to-face customer experience is the best way to safeguard customer loyalty in a marketplace where high network service quality is ubiquitous and service plan pricing plays a declining role as a competitive differentiator. Keep in mind, however, that while all seems rosy on the surface when it comes to growing in-person customer interactions, revenue improvement is often incremental. And equally significant is that mobile operators are also are facing an impending danger poised to snatch it all away. This danger? The eSIM. eSIM: The Next Disruptor eSIMs, embedded or soft SIM cards, use remote SIM provisioning (RSP) technology to download subscriber information directly onto a mobile device. Sometimes called an eUICC (embedded Universal Circuit Card), the operator-neutral eSIM stores all information required to authenticate a subscriber’s identity to a mobile provider on any eSIM-compatible network. This eliminates the need to switch SIM cards when changing mobile providers. Devices assembled with built-in eSIMs do not even have a slot in which to insert a SIM card, and neither operators nor subscribers are able to replace the eSIM with a carrier-specific SIM card. Subscribers will have little reason to walk into a storefront, and the leverage that operators have due to devices currently using network-specific SIMs will begin to slip – much the way it did when subscribers were finally able to legally access unlocked phones. With Apple already adding eSIMs to some of its devices, this is not futuristic thinking. The new iPhoneX, for example, comes with one built-in eSIM and one slot for a traditional SIM. This permits two separate cellular connections – and two phone numbers – on the same device. These connections do not have to be from the same operator. Users can have both personal and work numbers coming to the same smartphone, and international travelers can keep their home phone number and activate a local number at the same time to reduce data roaming fees. Google also announced late last year that it is moving forward with the roll-out of eSIM support for Pixel 3 devices, and that it is working with manufacturers to develop eSIM-compatible Android devices. Unfortunately, what is an impressive innovation for the mobile subscriber spells trouble for operators who will tell you that a significant portion of their retail storefront foot traffic is due to customers who want help moving traditional SIM cards between devices. This face-to-face interaction provides an opportunity for an operator’s competitor to provide the type of service that builds customer loyalty as well as provide offer additional services that will enhance subscriber stickiness. Additional operator threats involve an increased chance of operator disintermediation as other players, including OEMs and OTTs, such as Amazon, could easily step in and aggregate carrier offers into transparent price comparison charts that will encourage rapid switching. Even worse, OEMs will be poised to take ownership of the entire customer relationship – from device sales to network authentication – and essentially relegate operators to dumb pipe status. Combatting the Beast While operators need to be concerned, there is a way forward. The eSIM is likely to become the device standard within a few years. If operators think they are going to protect subscriber relationships – as well as ancillary revenue – from the eSIM beast, now is the time to plan how they will defend themselves as retail store visits plummet. A digital-first customer self-care approach is likely the only defense in a future operator ecosystem where in-person communication will be significantly reduced. To accomplish this, operators must be prepared to embrace a self-care customer service strategy that provides easy subscriber digital interactions while maintain subscriber engagement, even without the traditional physical touchpoints. The true key to success, however, is ensuring that this customer experience strategy goes beyond a simple transactional experience. Operators should, therefore, harness analytics and artificial intelligence across customer service, sales, marketing and other areas to extract customer insights and personalize the user experience, all while maintaining simplicity across proliferating communications channels, including chat bots, apps, social media and more. With eSIMs poised to disrupt subscriber relationships within the next five years, operators cannot delay any longer. They must act now to preserve their hard-won customer loyalty by delivering a digital-first, consistent at all touchpoints experience that continuously meets customer expectations. Doing so will preserve roaming revenue, decrease churn and, most importantly, give them the opportunity to serve an important supporting role in the consumer’s day-to-day life.  

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