The shutdown of US wireless carriers' stores amid the coronavirus pandemic will disrupt consumer smartphone upgrade cycles

The major US wireless carriers announced new operations that will see many brick-and-mortar locations shut down amid the coronavirus pandemic. Verizon will reduce store hours and cut staffing headcounts by half, though it has committed to paying employees for any shifts lost as a result.

AT&T announced it would close 2,200 stores, representing 40% of nationwide locations, and reduce operating hours at other locations. T-Mobile and Sprint took more aggressive measures, shutting down 80% and 71% of retail locations, respectively; T-Mobile also reduced the operating hours of its stores that will remain open. These measures are intended to protect employees and adhere to social distancing guidelines for limiting the spread of the coronavirus, which has infected over 10,000 people in the US across all 50 states, per The New York Times.

The store closures will slow the rate of phone upgrades, as many US consumers are likely to forgo buying new phones altogether rather than transitioning from in-store to online. Despite the growth of e-commerce in the US, nearly 90% of US mobile device sales still occur at brick-and-mortar locations, according to eMarketer estimates for 2019.

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Retail locations allow consumers to interact with devices in person and ask sales representatives for guidance. Consumers also don't have to wait for shipping, which can be particularly important if the new phone is being purchased to replace a broken device. Moreover, customers tend to feel comfortable spending more on in-store purchases than they do online, and smartphones are increasingly becoming a major expense in the US.

All of these factors mean many consumers will opt to delay upgrades amid store closures, rather than simply turn to online alternatives. This trend will be exacerbated by the economic strain caused by the pandemic that is being felt throughout the country, particularly by those who work in the service economy.

To make matters worse for wireless carriers, smartphones may still be in short supply by the time consumer demand bounces back. Coronavirus has wreaked havoc on the supply chains of major smartphone manufacturers preferred by US customers: Apple and Samsung, both of which have experienced supply chain disruptions due to the virus, accounted for 90% of all smartphones sold in December 2019 at brick-and-mortar carrier stores in the US, according to a Wave7 Research report cited by 9to5Google.

Short supply of some of the most popular smartphone models could see many potential smartphone buyers leave stores empty-handed and disgruntled, assuming there will be pent-up demand for devices after stores reopen. In the meantime, wireless carriers could lessen this strain by adopting more aggressive pricing online while stores are closed, which might help stabilize device demand through the crisis and beyond.