Verizon isn’t ditching its corporate-owned store strategy, but it’s making changes in the retail side of its business and that's resulted in severance packages being offered.
It’s unknown how many stores are closing permanently and how many employees are being let go. The changes are occurring nationwide.
“As a regular course of business we open and close stores based on customer demand - showing up where our customers need us most,” said Steve Van Dinter, director of communications at Verizon. “That said, the number of corporate [stores] remains fairly consistent.”
Through the course of re-examining the retail side of its business, Verizon this past week gave some employees the option of applying for other roles within the business or accepting a severance package and “transitional services” if they choose to leave the company.
The number of people affected is “nowhere near” the 50% of general managers across the U.S. that one report cited on Reddit. “It’s a very small number,” he said. “The grand total is not large.”
In addition, it’s not related to the Covid crisis, he said. Consumer trends and expectations have been changing and more people are choosing to go the digital route, use their mobile devices or the website. “There have been shifts,” in how people are using digital and the stores, he said.
“Our retail is very much an important part of who we are and what we do, and that’s why we continue to invest in it, but there are some times when you need to adjust,” he said. For example, some areas don’t need as many people or employees in certain types of roles.
Verizon had about 1,500 corporate stores as of October, according to Wave7 Research, which estimates about 20% of Verizon-branded retail stores are corporate owned, with the remainder run by independent dealers.
Does Verizon still plan on keeping its corporate-owned store strategy?
“Absolutely,” Van Dinter said. “Verizon is committed to continue to have stores in the areas where our customers need them.” The idea is the experience should be consistent whether a customer shops in a store in New York or Los Angeles.
Temporary store closures happened big time during the first Covid-19 outbreak in the March/April timeframe of last year, but increasingly, they’re turning into permanent closures. AT&T closed hundreds of stores last year, and its prepaid Cricket brand went to a 100% authorized retailer model, meaning it no longer uses a corporate-owned store model.
Brick & mortar remains
While habits are changing, retail stores remain a vital part of Verizon’s distribution model, Van Dinter said.
When Verizon closed 70% of stores due to the pandemic last year, it redeployed more than 10,000 of the frontline retail workers to work in remote customer service and tele-sales positions from home.
That happened over the course of a couple of weeks, he added. Since those closures, most of the stores are back open now, he said.
Clearly, behaviors have been changing, including Verizon’s. Last year the company started talking up its “touchless retail” strategy, designed to go beyond merely social distancing, making it simpler to do business through mobile check-in via its app, product scanning tools and self-scan verification of IDs. During the holidays, Verizon made a point of telling people that almost everything they can do in a Verizon store can be done via the My Verizon and My Fios phone apps, or online via its website.
“This retail restructuring is not surprising, as Verizon spent 2020 with some of its stores closed and with a major effort to deter store traffic,” Jeff Moore, principal of Wave7 Research, told Fierce. “The carrier has greatly increased the percentage of its transactions that occur online or in-app. A reduction of Verizon’s retail footprint is inevitable.”
Story updated to include additional store information from Wave7 Research.