Dive Brief:
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On June 17, Walmart announced that its customers can upgrade a postpaid cellphone online. "Qualifying AT&T customers" can get their phones delivered to their homes for free, the company said in a press release.
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Starting with AT&T, customers can select an Apple or Samsung device for an upgrade and accept payment terms for the phone. The retailer is touting up to $200 off Samsung and Apple devices, which could lower consumers' monthly payments by up to 30%, according to Walmart's statement.
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By the 2019 holiday season, Walmart plans to add wireless experts to an additional 600 stores, meaning that more than 3,000 stores in total will have store associates to help customers with cell phone upgrades, per the company's statement.
Dive Insight:
It's not clear whether Walmart's new mobile phone experts and a smoother upgrade process will be enough to move the needle on upgrade rates.
As smartphone prices have increased sharply over the years, consumers are holding onto their phones longer. In an April report from Bloomberg, Verizon pointed to consumers holding onto their phones longer as an explanation for why the wireless network's upgrade rate dropped to a record low in a recent quarterly earnings report. Then, HYLA Mobile, the mobile device software and trade-in company, said in its first quarter report that consumers are holding onto their mobile devices for up to nearly three years on average.
The sales slumps that mobile phone manufacturers endure could inadvertently impact retailers. Best Buy, for example, faced a scare when Apple announced it would miss its first quarter revenue forecast, as the popular brand has a significant impact on Best Buy's foot traffic.
For Walmart, the move implies a greater interest in the electronics space going forward, and is a direct shot at specialty retailers like Best Buy. The electronics retailer has based much of its value proposition on offering in-store services and home installation through the Geek Squad, giving customers expert help on buying and installing products.
In the announcement, Walmart said the company plans to have "a broader commitment to significantly improve the electronics department across stores nationwide, including live product demos and more accessories." Perhaps, newer smartphones with 5G capabilities and AR features will be enough to lure shoppers to stores for product demos and phone upgrades.