If you’ve recently visited a corporate Verizon store, you may have noticed signage telling customers to wait outside. It’s part of a 1:1 ratio of customer-to-rep that the company started last year when the pandemic set in.
It’s been going on for months, and Wave7 Research likens it to a 1-on-1 basketball game. When analysts visit a store as part of their routine checks, they’ve found that more often than not, a store rep is at their side. “It’s almost like you’re in a basketball game and it’s a one-on-one defense format,” said Jeff Moore, principal of Wave7.
According to a Verizon spokesman, it’s part of the Touchless Retail initiative that Verizon launched last year in response to Covid. The 1:1 ratio probably will be lifted when things get back to normal, but there are other practices, like contactless payments, that are likely to continue, according to Steve Van Dinter of Verizon's Consumer communications group.
Verizon still isn’t saying how many employees are affected by changes in its retail store strategy. Last month, the company informed some retail employees that they could apply for other roles within Verizon or accept a severance package and “transitional services” if they chose to leave the company. Van Dinter said on Wednesday that he can’t say how many people are affected because they still have time to explore other opportunities.
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The exact changes remain hazy. Anonymous commenters on TheLayoff.com and Reddit refer to significant layoffs but there seems to be no consensus on the amount of downsizing.
The company told Fierce that the overall majority of corporate stores remain open. At the start of 2020, the company had 1,600 corporate stores and it’s reporting a similar number this week. That’s in part because as some stores close, others are opened or re-located.
According to Van Dinter, what’s happening is a “subset” of smaller locations, which are within about a 30-minute drive from one another, are part of the strategy where one general manager oversees two stores. These are corporate stores with a smaller footprint, he said.
Still, the changes have some wondering what’s going on with Verizon’s overall retail strategy, one that, like other wireless service providers, is becoming more about digital than physical in-store purchases.
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Looking at the fourth-quarter 2020 results, the gross adds at both AT&T and T-Mobile were on par or better compared with the year before, despite Covid. But at Verizon, that number dropped significantly, according to Roger Entner, principal of Recon Analytics.
“T-Mobile and AT&T have quite successfully shifted their business, and they are all equally affected by Covid,” he said. They all moved to online and digital channels. But based on the gross adds, “from that perspective, it’s Verizon that is struggling here to adapt to that new environment and the others have not missed a beat… If this is Verizon 2.0, I want to have Verizon 1.0 back.”
Shrinking footprint
Wave7’s Moore points to comments that Verizon CEO Hans Vestberg made at the beginning of his CES 2021 keynote as indicative of where the company is headed.
As Covid began to spread around the world, “we leapfrogged five to seven years in the digital revolution,” speeding up the timeline for work from home, distance learning and telemedicine, Vestberg said. “We knew it was coming, but it was closer than we realized. Now, instead of being our future, it’s our present.”
Those statements, combined with other things Moore has heard, lead him to believe that a bigger transformation is happening in Verizon’s retail presence, which is to say: It’s shrinking.
“When I put the whole picture together, the big picture is completely clear,” he said. He sees a major retail reorganization underway, including the elimination of indirect account manager positions.
Wave7 Research has described Verizon as the most cautious carrier in dealing with the pandemic. In its most recent report, the firm described a situation where a store rep was observed repeatedly telling a customer to resolve an issue by calling customer care. Ultimately, the customer persisted and was allowed into the store.
Moore said he’s keeping an eye on Verizon’s public stats, including number of employees, which was 132,200 as of January 26, and number of stores. By way of comparison, Verizon had 2,330 corporate stores in 2015, compared to today’s 1,600.
It’s worth noting that corporate stores are separate from authorized retailers and independent dealers. According to Wave7, Verizon corporate stores only represent about 20% of the stores that sell Verizon. It’s also often difficult for the average consumer to ascertain whether a store is corporate owned or an authorized retailer, and that’s by design; the idea is to remain consistent across the brand.
Move to digital
Verizon’s move to digital services has been going on for a number of years. In 2016, it started looking at more digital features, such as in-store pickup and in 2017, it introduced same-day delivery. “We were kind of seeing that our customers were looking for additional options and ways to interact,” such as with the My Verizon app, according to Van Dinter.
They had a lot in the pipeline, and when Covid hit last year, it expedited elements of the Touchless Retail strategy. Since then, Verizon has moved 10,000+ retail employees into the tele-sales channel and it’s grown its tele-sales team since June, going from handling about 600,000 calls a month to now more than 1 million calls a month.
Verizon also has some Verizon Express stores where consumers who know what they want can make a quick visit and be in and out in the least amount of time. They’re smaller footprint stores that are not meant to replace the regular stores but to cater to those who are more comfortable with new technology.
While a lot of focus is on shifting shoppers to digital channels, the physical retail is not going away, according to Van Dinter. “We very much see our physical stores being a part of how our customers interact with us into the future,” he said. Last year, Verizon invested significantly in its retail footprint, with about 100 of its corporate stores undergoing a complete refresh, a relocation or opening new doors. It’s an option it needs for customers who prefer to interact in a retail setting, he said. Just remember to call ahead and make an appointment.