Retail stores remained the primary place where customers made wireless purchases during the first half of the year and overall satisfaction ticked up in the face of COVID-19, with T-Mobile retaining the postpaid buying experience crown.
The results are based on a J.D. Power survey of 13,368 prepaid and postpaid customers who used any of the following three sales channels: called a sale representative, visited a retail store, or interacted with a sales rep online.
T-Mobile sat atop the postpaid customer satisfaction leaderboard for wireless purchase experience, while AT&T’s Cricket snagged top billing for full-service prepaid, according to J.D. Power’s 2020 Wireless Purchase Experience Study Volume 2.
This is T-Mobile’s sixth consecutive win in the category and Cricket’s third time ranking first in the category. Satisfaction is measured based on six factors in order of importance: store sales rep; website; phone sales rep; offerings and promotions; store facility; and cost of service.
Nationwide carriers responded when the global pandemic started to unfold in the U.S., including temporarily shuttering thousands of retail stores in mid-March (some of which will strategically remain closed) as lockdowns and stay-at-home orders went into place. They also committed to continue service for customers who couldn’t pay, and waived things like late fees and other penalties.
Retail locations historically have accounted for the lion’s share of customers’ wireless purchases. LightShed Partners in March pegged sales distribution mix for national operators at around 75% for company branded stores, 10-15% at big box retailers or indirectly through Apple, and 10-15% online and telesales.
Despite store closures and the pandemic, brick-and-mortar stores accounted for 63% of sales between January and June 2020, according to J.D. Power’s study.
Granted many stores have reopened at this point, albeit with new protocols and things like curbside pickup. On second-quarter earnings in July, AT&T CFO John Stephens noted the carrier’s mobility equipment revenue grew during the three-month period, in part thanks to a rebound in retail store traffic as they reopened late in the quarter.
“We’re now giving customers other options on how to fulfill, so in some cases using omni channel capabilities, they’re doing work online and simply rolling by the front of the store to pick something up,” AT&T CEO John Stankey said on the call.
Verizon had more than 60% of retail stores open at the end of June, versus roughly 30% in April. That increased to nearly all reopened at the end of July. The carrier also introduced a new touchless retail strategy.
That said, Verizon fell behind both T-Mobile and second-place AT&T in J.D. Power’s wireless purchase experience customer satisfaction survey, with a score of 839 out of 1,000 – or 8.39 out of 10. That’s below the full-service postpaid average of 847 points. Comparatively, first-place T-Mobile scored 863 and second-place AT&T scored 853.
Verizon isn’t failing though, as J.D. Power’s Ian Greenblatt previously told Fierce that scores in the 800s are good and anything over 9 is considered “super high.”
And overall, consumers were happier with their experience compared to the first half of 2019. Customers’ satisfaction when making a wireless purchase improved eight points versus the same period a year ago. J.D. Power said the uptick was driven by higher satisfaction with the cost of service and interactions with phone-based sales reps.
To that end, in-store and phone-based carrier representatives continued to play a key role – though customers are increasingly turning to online channels as a first point of contact.
Perhaps unsurprisingly, online and phone-based sales channels saw the most growth, up 6% and 7%, respectively. According to J.D. Power, 20% of customers that ultimately made a purchase over the phone first started shopping on carriers’ websites.
That’s where operators may need to improve, as the survey suggested carriers are struggling to convert online sales.
“Wireless carriers are doing a good job of getting customers to their websites, but struggle to convert those experiences into sales,” said Greenblatt, managing director at J.D. Power, in a statement. “If carriers want to optimize their online channels, they need to better evaluate the purchase journey to successfully leverage the dynamics of person-to-person interaction and translate that to the digital sales platform.”
Some are experimenting with new ways to do so. As noticed by Wave7 Research, AT&T launched an interactive virtual store based off of a physical retail store that lets customers explore products and chat with sales reps via video.