Convenience stores delved into the prepaid category years ago by carrying long distance phone cards, long before the explosion of cellular phones. Today, the category has evolved into a distinct wireless that caters to customers looking for a commitment-free way to use the latest cell phones.
Targeting untapped consumer segments has become the driving force behind the changing prepaid wireless category. Retailers are focusing their energies on drawing in young people who need instant access to communication devices such as wireless phones and prepaid cellular calling cards, while retailers are pushing promotions in stores near college campuses and in urban communities to attract these customers.
The convenience of purchasing a pepaid cellular pins really appeals to customers because they can control spending cost.
The prepaid cellular pins come in a variety of set denominations, ranging from as little as $5 to as much as $159, allowing customers to customize their calling plans by purchasing a set amount at a time.
Merchant retailers approach the prepaid products market by targeting lifestyle choices of customers-people who seek a specific item to support their standard of living. Wireless phones and prepaid airtime pins without any shelf space taken or inventory costs to merchant and appeal to groups who need to control spending, travel frequently, have family in other countries and whose past credit may not qualify them for a monthly plan.
The convenience channel is the frontrunner in providing an easy solution for its customers. The type of consumer who typically purchases prepaid wireless items may come from lower-income places and can't be tied down to a contract plan. These are the customers retailers should be targeting.
Customers that shop the prepaid category are looking for an "on-the-go" solution. The wireless pins are perfect for them. They just want to make a quick stop to purchase some talking minutes and don't want to be bogged down with a plan.
The prepaid wireless category delivers retailers high single-digit margins, but the minimal investment required to carry the products makes the category very attractive for retailers. There is no investment and inventory cost required to carry prepaid wireless products since the pin sell quickly. The pins don't require switching out old items for new ones every week like scratch cards.
Prepaid pin sales
The Hispanic demographic is another potential goldmine for retailers who sell prepaid products. Recent studies indicate Hispanics are among the fastest growing demographic in the U.S. with enormous purchasing power. More importantly, the immigrant Hispanic population has a need to make international phone calls to family members and friends in their home countries. As a result, there is a need to provide phone pin-card with international calling abilities. Chains in regions with dense immigrant populations have also profited from carrying bilingual English and Spanish phone pins-cards to meet the consumers' needs.
It's definitely important to have a variety of pins-cards available. The international community needs as much selection as possible since their needs are greatly varied. Also, retailer must try to remember people who are going abroad, as they may want to purchase a bulk of pin-cards for their travels.
Smaller stored are embracing prepaid wireless items because of the ease of sale. The pins are instantly issued at the point of sale, all the retailer has to do is pull a pin to activate it and collect the money. With distributions handling all the merchandising for the prepaid category, retailers can focus on garnering more repeat business for the category.
Prepaid cellular products are a lot more popular now than a few years ago. Customers always asking for the pin in stores-it's an item that just draws people in because of its flexibility and freedom.
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