Sim Local, one of the largest providers of mobile sims in the travel sector, is targeting outbound passengers with the opening of a new departures store at London Heathrow Airport Terminal 5.

The store will be located in Satellite B (post-security) at the gates and will open in the first quarter of 2021.

Founded in 2011, Sim Local operates three arrivals stores at the airport. The largest is located in Terminal 3 and the others are in Terminal 5 and Terminal 2.

Sim Local also operates a store in the interchange located between the airport and London Underground stations.

PRE-TRIP OPPORTUNITY

As reported, the Terminal 2 outlet re-opened on 7 September having been closed since March due to the coronavirus (Covid-19) pandemic.

The in-store offer across Sim Local’s Heathrow shops comprise sim cards and a small selection of mobile handsets and accessories.

Sim Local has a number of vending machines across UK airports and operates partner concessions with WHSmith, We Know London and Excess Baggage.

Andrew McClellan, Chief Business Development Officer, Sim Local told TRBusiness: “To date, Sim Local has solely focused on arriving passengers buying sim cards to use in the UK. We also want to tap into the outbound customer portion.

He explained: “The aim is to tap into customers leaving the UK and sell them sim cards before they leave for their destination country. This will enable passengers to be connected from the moment they touch down.”

Passengers travelling to the US are the main targets, along with a small number travelling to South Africa and Asia.

“We will either be offering global sim cards or local sim cards for America,” said McClellan.

On the prospect of being able to target outbound passengers, McClellan added: “This is a really interesting development and one which could lead to further openings if successful.”

Overseas expansion is certainly on the agenda over the next three or four years, during which time Sim Local aims to continue refining its ‘really good’ UK model.

“This is a model we can take abroad very easily,” said McClellan. “There are a number of airports worldwide which are crying out for a really solid sim offer.”

The formation of a strong team comprising McClellan, Chief Development Officer Chris Smith and Board Advisor Louis de Bourgoing, who previously held the role of WHSmith International Director, should help facilitate future expansion opportunities.

“We have a good heavyweight team, which sees the global potential in what we do,” commented McClellan.

Expansion is planned across three channels. The first is the UK, the second is hub airports worldwide (as alluded to above) and the third is the US market.

“In the UK, we still see a lot of headroom in what we can do,” continued McClellan. “Our conversion of international arrivals is still in the low single-figure percentages. We think we can increase this and plan to add more touch-points within Heathrow, Gatwick and other airports which handle significant numbers of international passengers.

“We are planning to grow in all our stores so we can add more digital content and make them a lot more welcoming for customers.”

CONCESSION DEALS IN PLACE

Elaborating on the company’s overseas expansion plans, McClellan hints at significant progress. “We are in good late-stage negotiations with a number of big European hubs, where we are hoping to open new retail stores in the first half of next year.

“In the US, there is not really a strong incumbent sim card seller. There is nobody with a value or customer service proposition anywhere close to ours.

“We have deals in place with retailer partners for concessions and also for placing vending machines across a number of US airports. These should also be finalised during the first half of 2021.”

Reflecting on the performance of Sim Local’s airport business during the pandemic, McClellan is encouraged by the fact spend-per-passenger and conversion rates have remained similar to the pre-Covid-19 period.

“It doesn’t look like passenger behaviour, buying habits transaction value and price elasticity have materially changed. Time will tell, but we are gaining great confidence from the fact passengers are still behaving in the same way.

“As passenger growth comes back through 2021, our model should float up with it.”

Following a record 2019, which yielded new partners, the last 10 months have been a ‘journey through uncharted territory’.

McClellan said: “Last year we had really good products and a really good set of customers passing through our stores. We managed to hit the highest conversion rates and spend-per- passenger in our history.

“This January and February were actually okay. In January, we re-set our expectations to a slightly higher level than 2019 because we had such a positive start to the year.”

However, things have obviously been more difficult since March, when Sim Local had to close its Heathrow Airport stores.

“WHSmith to its credit has remained open throughout the pandemic and we have had little bits and pieces of sales coming through,” said McClellan.

“With Heathrow Terminal 3 and Terminal 4 not yet open, we have zero business coming from two of our biggest terminals. The pandemic has been really tough on our cash-flow.”

For now, Sim Local is doing everything possible to ensure passengers feel safe in-store and confident to buy. McClellan said: “There are a set of legal requirements we needed to follow for distance measuring. There is also a set of requirements over the top of that which Heathrow have encouraged us to implement.

“Fortunately, our stores have always been pretty open, so we have not needed to put in one-way traffic.”

INTENSIVE TRAINING PROGRAMME

Elsewhere, the company has undertaken an intensive staff training programme to ensure sales associates recognise Covid-19 symptoms, ask the right questions and make customers feel safe and secure.

“Screens and barriers have been put up and measures have been put in place around cleaning phones while we handle them,” said McClellan.

“A lot of effort is put into ensuring customers walk out with their phones working and fully connected. Part of that involves handling phones, which is why we have a very good cleaning regime for each phone we handle. We want customers to take back their phones with complete confidence.”

During the pandemic, airports have seemingly done everything possible to support their retail partners with Heathrow and the wider airport community assisting Sim Local in its quest to mitigate against the impact of Covid-19.

“Heathrow has been really helpful in some regards, but they are clearly a big business and must keep themselves viable and relevant. The real benefit is the people on the ground at Heathrow who brilliantly put together joint plans following the closure of our stores. They have kept us up-to-date in terms of the next steps.

“As terminals re-opened, Heathrow moved quickly to sign off various elements and ensured we could resume trading.”

Pressed by TRBusiness on whether Sim Local received rent relief during the pandemic, McClellan commented: “We have agreements with Heathrow on rent.

“It is a difficult period with little money coming in, which makes it harder to reach a satisfactory conclusion. We are really in it for the long-term; that the partnership is for years rather than months.”