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Sainsbury's mobile service: When hindsight is a truly wonderful thing
If only they'd known how annoying Jamie Oliver would become (and some other thoughts on mobile phone tariffs)

By editorial@silicon.com

Published: Monday 09 September 2002

What's more annoying, people's incessant use of mobile phones in public or fat-tongued mockney chef Jamie Oliver? It's a close one.

Well soon, supermarket Sainsbury's could be behind both these modern phenomenon.

Having brought Oliver to our screens in a series of irritating commercials, the uber-grocer is now poised to take the UK by storm with a mobile phone service that could prove as popular as it is innovative.

A limited number of trialists have already been road-testing Sainsbury's One, which piggy-backs on O2's infrastructure in the same sort of virtual network operator (VNO) agreement that T-Mobile and Virgin Mobile share. But that's where the similarities to existing services end.

In a nutshell (and probably a 'pukka' one at that) Sainsbury's customers will be billed at the end of every month according to the tariff which would have suited them best, regardless of which operator offered it - proving once and for all that hindsight really is a wonderful thing.

For example, one month Sainsbury's may charge you using an O2 call plan - the next month it might be in your best interests to be charged under a Vodafone package. If you have a texting frenzy one month, then you'll most likely be charged using a tariff which includes a hundred free text messages. Simple, but effective.

The move is a bold updating of the existing practices of operators who will offer you advice, supposedly every quarter, on which of their own packages would suit you best - if indeed, it's not the one you are already using. However, a third party throwing open this kind of retrospective planning to all operators and all packages on a monthly basis should cause concern among the big four.

Recently, Orange announced a new tariff plan that will enable customers to tailor their packages more specifically to their own needs (see http://www.silicon.com/a55424 for more), but alongside Sainsbury's offering even this concession fails to cut the mustard (or should that be 'big dollop of muthtard... wicked!')

However, mobile operators still have one major card up their sleeves - 'brand loyalty' and a resultant inertia among customers to change. This is a consumer mindset that Sainsbury's has been relying on for years.

It will be well aware that its stores retain customers who have moved house to within walking distance of a rival supermarket. Often people travel miles out of their way to shop at the same store, because many have loyalty cards, with points they're not ready to give up on, and many are just happy to 'stick with what they know'.

The downside of Sainsbury's offering is that is far from crystal clear. You may be prepared to take Sainsbury's word for it that you will be saving money with Sainsbury's One - but not knowing what you'll be paying one month to the next will still be a proposition alien to many at home with their existing tariff.

Similarly, customers who've been with O2, for example, for a few years will be used to free upgrades on handsets and annual loyalty bonuses. They may not be prepared to move over to something new just yet.

In terms Sainsbury's will be familiar with, somebody may tell its customers it's cheaper to go to Asda, but if they're happy with the range at Sainsbury's and have never found it excessively priced then they'll probably stick with what they know.