It has been a chaotic week in the mobile phone retailing sector, with Phones 4U collapsing into administration after key operators EE and Vodafone decided to end their supplier agreements with the high street retailer.

O2 cut ties completely with Phones 4U at the start of 2014 as part of a wider review of its distribution partner network, and the decision by three of the UK's largest mobile operators to end the relationship with the retailer highlights their respective confidence in selling directly to customers through their own stores.

Against this backdrop, Bridget Lea is in her first few months as general manager at O2 UK, having assumed the role from Google-bound Crispin Lowery in July. Lea had joined O2 as head of stores in August 2012, helping oversee a period of significant change within the business's store portfolio and across its workforce.

Although unwilling to comment on the current situation at Phones 4U, the new general manager offered Essential Retail an insight into some of the strategic decisions O2 has made over the last few months, including the introduction of a new salary structure that aims to move the retailer away from a sales-driven culture to a more service-led approach.

"The thing I'm most proud of is changing how we reward our people – from having incentivised bonus schemes to increasing our base pay and reducing our bonus potential," she explained.

"The idea being that they can sell what the customer needs, rather than just trying to sell a device to hit a number."

Anything related to staff pay and bonuses is always a sensitive issue and the process has not been implemented without its share of problems or worker complaints, but an agreement on the deal was reached by O2 parent company Telefonica and the Communication Workers Union in May, which has since been approved by staff and was launched in July.

Lea commented: "Since coming into the business I've aimed to get to grips with the people. I felt we needed to spend our time and effort helping them develop from great salespeople often focused on commission to highly trained individuals who are passionate about digital and really understand customers' needs.

"We've now launched the new pay structure, and we've had a lot of positive comments from our people about it."

The next focus for Lea is on adapting the O2 retail stores to meet the requirements of the modern customer. Over the last few years there have been a number of aesthetic changes made to the business's property portfolio, with various concepts trialled and rolled out, reflecting the fast-changing nature of the mobile industry.

Now it appears attention is being placed on making the in-store experience as efficient and interactive as it can be, utilising the raft of technology options available to the retail market. Employees in 100 of the business's own stores will be armed with Samsung tablets by Christmas – used to serve the customer around the shopfloor – with the remainder of stores set to be issued with these mobile devices in January.

Another vendor O2 is currently working alongside is Qudini, a mobile-based customer flow management tool provider that is used by O2 'concierge' staff when meeting and greeting shoppers as they enter the store.

O2's workforce operate the Qudini Concierge app on their in-store tablets to manage their customers, using the system to assign them to sales staff or keep them up to date with how long they will need to wait to be served.

Methods to better mobilise and personalise its O2 Priority loyalty scheme, as well as the introduction of beacon technology, are also being considered by Lea as she looks to make her next mark on how the companies' stores operate. Much of this work is undertaken in association with the O2 digital team, which is continually working on new solutions for use across the wider business.

"We work in a digital industry and we want to be more than a mobile phone store," said the general manager.

"The future for everyone in our sector is about connectedness so it does make sense that our stores offer a leading, cutting-edge experience."

As Lea herself acknowledges, the perfect-looking store and the ideal property portfolio are difficult to define due to the continually evolving needs of UK consumers, but she asserted that the business will "keep reviewing and challenging itself".

Indeed, the last two years have seen Telefonica sell off a number of its O2 stores to franchisees, with 43% of the store estate now run on a franchise basis. The move is part the parent firm's move to reduce its multi-billion euro debt burden, a situation that also led to the organisation selling its O2 Ireland operation to Hutchison Whampoa for €850 million, earlier this year.

The task facing O2 for the stores that do remain under full Telefonica-ownership is to position them at the heart of a multichannel retailing approach. Various plans are in place to further link up the online and offline divisions of the business, in particular surrounding the business's click & collect service, which could evolve further in the months ahead.

"We as retailers need to look at one view of inventory so the customer can more effectively find what they want across the estate and we need to be there to make sure they get it quickly in a location that works for them as we know how busy customers lives are," noted Lea.

"It's widely acknowledged that stores are here to stay – people like to interact with other people and touch and feel technology. Within our sector technology often needs explaining and our gurus and advisors are at hand to help customers get the best from it."

Following this week's news from Phones 4U, it is clear that mobile operators feel increasingly confident about independently providing these kinds of services for the UK high street.

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O2

Qudini

Samsung