TracFone quietly opens dozens of U.S. retail stores

Smartphone millennials
TracFone's branded stores are opening as the number of Simple Mobile Solutions stores appears to be dwindling.

América Movíl’s TracFone has quietly opened dozens of retail stores across the nation this year as competition in the prepaid market has become cutthroat. But whether those new outlets are gaining much traction among consumers isn’t clear.

The largest MVNO in the United States now operates 81 U.S. stores, Wave7 Research recently reported, up from just eight at the beginning of the year. Sixteen of the new outlets are in California; the company also has locations in New York, Texas, Illinois and Ohio, among other states.

The stores hawk all eight TracFone brands including Simple Mobile, GoSmart, TracFone, Net10, PagePlus, Total Wireless and SafeLink, Wave7 reported. They offer exclusive deals that can’t be accessed online, and tablets are available to help shoppers determine which brands and networks are right for them.

But Wave7 said recent in-store checks indicate they don’t seem to be drawing much foot traffic.

“One complaint is that many customers are not aware that eight brands with widely varying options are available, as the stores to some extent are associated with the TracFone brand, seen by many as being a ‘glove compartment’ phone for older Americans,” Jeffrey Moore of Wave7 wrote in a recent note to subscribers. “Another complaint is the lack of advertising for the stores.”

TracFone is stepping out its branded store initiative as the number of Simple Mobile Solutions stores dwindles. Simple Mobile is a TracFone-affiliated retail solution that enables independent dealers to sell other brands in as much as 25% of their stores’ retail space. Roughly 800 Simple Mobile Solutions outlets were in operation in 2016, but Wave7 said that number “appears to have fallen sharply.”

América Movíl clearly hopes the brick-and-mortar effort can help TracFone claw back some market share in a brutal U.S. prepaid segment. TracFone lost 1.4 million prepaid customers in the first quarter of 2017, marking a 3.3% drop year over year, primarily due to customers leaving SafeLink Wireless, which provides services through the Lifeline program under the federal government’s Universal Service Fund.