Wave7 Research had been observing a reduction of inventory of Verizon Prepaid phones carried in Target stores. The reduction was noticed across several states over a time period of a couple of months. BestMVNO had observed similar changes locally with one store going from fully-stocked displays in August of 2020 to almost completely empty by mid-October of 2020.
The latest prepaid report filed by Wave7 Research confirmed to its subscribers that the brand is indeed being withdrawn from Target. The removal comes at an interesting time as Verizon recently agreed to acquire Tracfone and all of its associated brands. It's also at a time when major prepaid brands are doing the retail shuffle. AT&T Prepaid and Cricket Wireless were just taken out of Best Buy while Simple Mobile and Total Wireless were launched at Sam's Club stores in June.
The Verizon Prepaid Brand Had Been Failing For Years
For over two years Verizon suffered subscriber losses quarter after quarter in its prepaid division. The losses finally stopped in quarter 2 of 2020 when Verizon had 12,000 net subscriber additions after the COVID-19 pandemic hit. Verizon got aggressive with online promotions during that quarter as the pandemic forced more consumers than ever to shop online and more to look to save money by switching to prepaid. So whatever Verizon had been doing in national retail stores with prepaid to that point clearly failed and had been for a long time. And that failure is the most likely reason why Verizon finally decided to pull the plug on its relationship with Target.
Verizon Prepaid still remains at Best Buy and Walmart and at other retailers like Dollar General and Meijer but this is something to also keep an eye on. The fact that the brand is still sold in other stores suggests Verizon does better with sales in those stores than it did at Target. But given Verizon's history of prepaid failures, it still may not be enough to warrant keeping the brand alive at each store. Furthermore, Verizon's Tracfone acquisition may lead to changes in Verizon's overall prepaid retail strategy. The Tracfone brands have strong distribution and sales through national retail stores with Walmart leading the way. In fact, Walmart is the exclusive retail partner of Straight Talk Wireless and Walmart Family Mobile. Other Tracfone brands sold there include Total Wireless, Simple Mobile, and of course Tracfone. So by picking up Tracfone and its retail distribution channels Verizon may be less inclined to worry about selling its own prepaid brand name in stores. If Verizon's Tracfone acquisition is allowed to go through by regulators, Verizon will also have a near-monopoly on prepaid wireless brands sold at both Walmart and Best Buy. So Verizon may also look to pull its prepaid brand out of those stores to help gain regulatory approval.
Jeff Moore, Principal of Wave7 Research commented to BestMVNO: “We are seeing less display space and less choice for prepaid and for postpaid at national retail. The exit of Verizon postpaid and prepaid from Target – on the heels of the exit of Sprint, Boost Mobile, and Virgin Mobile – is a case in point.”