• by Aaron Baar , July 20, 2012

Virgin Mobile is branching out into the retail world. This week, the Sprint-owned brand is opening its first branded retail outlet in Chicago’s upscale Lincoln Park neighborhood, looking to attract a relatively young demographic of consumers who are looking for something a little different.

Unlike most wireless retail stores, the Virgin Mobile store presents a relaxed atmosphere, with comfortable chairs for customers to sit in while employees activate their new phones, charging stations, a phonograph where people are encouraged to play records (supplied by a neighborhood record store down the street). The feel, according to Ron Faris, Virgin Mobile’s head of marketing, is to be more akin to that neighbor, than of another big-box retailer a little further down the street.      

Q: This is a very different feel for a phone company store. What’s the vibe you’re looking for here?

A: I think the thing that we’re looking at is that the relationship you have with a phone company is basically, if you buy a phone, you come into the store and you leave basically hoping to never to see them again. What we want this place to be is a place to sit and hang -- and our folks will walk you through the hottest new apps you can put on your phones. I like to think our brand sits at the intersection of pop culture and technology.

Q: How does that translate into creating a retail store?

A: I think a phone should connect you to more than calls and data. A phone should connect you to the culture and community, to pro-social causes. What we want to contribute to the community is that we might have events in the form of app demos. We’re launching with a poetry reading with the Night Ministry (a homeless youth charity), where Common is going to come and give tips to the kids about how to write. During Lollapalooza this store might be a green room for some of the talent coming in, and our in-house DJ [on Virgin Mobile Live] will  ome and interview someone. It’s coming to buy a phone, but we’re not hustling a phone. Buying a phone should be the beginning of your relationship with us. 

Q: In the prepaid world where you live, the word “relationship” isn’t the first word that comes to mind.

A: I think if we do our job right, there’s no need to sign a contract because [customers] will keep coming back anyway. But that’s never been the mindset of prepaid. And prepaid right now is the future. It’s no different than a 24-year-old kid who’s enlightened enough to disconnect their cable company to get Hulu. Now that everyone has smartphones, it’s about [selling] a lifestyle. Even when I hear myself say these things, it’s like, “Dude, you’re a phone company.” But there’s no reason you can’t be a phone company with soul.

Q: Why start in Chicago, as opposed to New York or LA, or even Austin, Texas, which strikes me as more of a place where the intersection of pop culture and technology is more prominent?

A: Other than the fact that “High Fidelity” was shot here, I think Chicago is a great city for Virgin. It’s actually one of our top two markets. I think the value breaks through for a lot of the segment. Chicago is a great starter town for people just getting out of college. Austin is more aligned with pop culture and tech -- but I think for our demographic of kids just coming out of school, Chicago, DC, and Boston are great starter towns for people just coming out.

Q: Are you concerned that you cannibalize sales at other places? This store is literally a block away from a Best Buy. 

A: Here’s the problem with Best Buy. Best Buy and all of our big-box retailers account for 44,000 doors in the country for us, and that’s fantastic. That’s where we get our scale from. The only problem with those stores is that our signage is no bigger than [a piece of paper]. And in that, you have to understand what we stand for, what our value proposition is -- and hope that the sales rep is representing our brand and our offering and our phones to the best of their ability, while they’re next to three other competitors. 

Q: Prepaid has long been thought of as the lesser option in the mobile world in the U.S., mostly because of the notion that the phones were not as good. How much are we getting over the notion that prepaid plans don’t offer the best phones and the most up-to-date technology? And how does this store address that?

A: It’s a big stigma that we still have to overcome with little money. One way we’ve done that is we’ve wrapped ourselves up in the brand, using [Sir Richard] Branson. The biggest problem in getting a post-paid defector is they say, “I don’t want to feel I’m taking a step back. I want what I have, but I want to get it for less.” To do that, it’s making sure the phones are a lot better, which we’ve done. It’s really getting the word out that prepaid is the new cord-cutting. Having real phones, the best phones here, will help immensely. This is where you realize this is not any step down, that it used to be years ago. It’s a bit of a coming-of-age story, we couldn’t have done this a few years ago. We’ve been around for seven, eight years from the days of plastic, tiny burner phones, and today I’m sitting in a store that looks like a VIP section at our Free Fest [music festival] and there’s a display for an iPhone. This brand has come a long way. This is an arrival moment for the brand, and the store is a big part of that.