The idea is to overcome the reluctance of some centre managers to sign up any more mobile retailers, such has been their aggressive expansion in recent years, which has made them ubiquitous occupiers of high streets and shopping malls.

David Bickett, director of retail business development at 3, says: "We've got to see how we can differentiate our offer."

This need for change has come about very quickly for 3 as it only launched in the UK in 2003 - as the first 3G network operator - and it has only operated its own stand-alone stores for a little over 12 months.

Central to the re-evaluation of its retail formula is a desire to make its stores less male-oriented. "We have to ensure a balance in the gender split, especially as shopping centres are 80 per cent female focused between 11am and 3pm on week-days."

The company is de-emphasising the technology aspect of its offer and instead highlighting the uses of mobile devices, with displays of 'live' products similar to those seen in Apple stores. In addition, lighter Scandinavian timber is being used to give the stores a softer feel: "We've created an area back-of-house with cushions to sit on. Research has shown this to be unisex, warmer, and a lot more customer friendly," says Bickett.

The new shopping centre-driven store design will also be used on the high street, according to Bickett, who clearly holds such environments in high regard: "They provide the ultimate experience. If you can't compete in shopping centres then you can't compete effectively on the high street."

Following a trial of the new store in Maidenhead (where 3 is based), Bickett says a roll out will begin in the next month with sites already secured in The Ridings in Wakefield, Weston Favell in Northampton and The Priory in Worksop.

Such openings will see the company grow beyond its current 370 stores (including 128 concessions in Superdrug), which is an impressive number when you consider that almost 170 of these have opened their doors in the past 12 months. In August alone, 31 new units were added to the portfolio.

Many of these have been in shopping centres (57 per cent) and 3 now has a presence in 98 of the top 100 shopping centres (based on the CACI classification). Bickett says there is an opportunity to add 100 more stores through a phased roll out during 2008 that will involve additional stores in some centres as well as opening up for the first time in some of the smaller schemes.

These stores will ideally be around 750 sq ft, as the company has found that its older 2,000 sq ft units are too large and there is the risk of them feeling like 'museums', since mobile retailers like 3 have a relatively low number of SKUs compared to most other categories.

A major appeal of shopping centre stores for 3 is that they are typically more productive than high street outlets, with conversion rates up to 20 per cent higher, which Bickett suggests is down to the fact that shoppers are "in the mindset to buy".

Another advantage of the centre environment is that shoppers know the opening times and each retailer will stick to these, whereas on the high street staggered opening can result in confusion. However, he recognises that the upside to this is that high street stores have the freedom to trade longer hours.

Statistics

3

Founded: March 2003

Parent company: Hong Kong-based Hutchison Whampoa

UK chief executive: Kevin Russell

Number of UK stores: 370 (includes 128 Superdrug concessions)

Average store size: 750 sq ft

Property agent: Michael Peddar & Co.

Website: http://www.Three.co.uk

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