Recycling x Retail

June 8, 2020

Horse-trading between individuals has long been a form of commerce that was at once ubiquitous and necessary. There is a litany of axiomatic sayings, bon-mots and rules-of-thumb to prove it.

Across the miasma of consumer marketplaces, quite a few consumer groups have historically shown a willingness to embrace certain products that have had previous owners. Upcycled fashion, music, household goods etc. often bought with the drivers of recapturing the spirit of a bygone age, cultural reference or style.

Or just plain thrift.

This thrift motive applies to everything that’s not a collectible/antique/investment – from cars to CDs. It’s just cheaper to buy second-hand, but that comes with uncertainty over product quality and, in many cases, an accompanying social stigma.

And this is true of the ‘2nd Life’ consumer electronics marketplace, led by the mobile phone category, which has grown rapidly through the thrift motive, but has been dogged by:

1.    The concern that both buyers and sellers lie (see paragraph 1)

2.    The 2nd Life product is not new and consequently less desirable

3.    Risk is higher – there is no warranty or the warranty is not worth the pixels it’s written with

4.    Awareness of what’s available

Caveat Emptor is the phrase often used to describe consumer-to-consumer marketplaces – which are invariably online – with the most unscrupulous sellers protected by at least one degree of separation. Online platforms have taken steps to address this, with varying degrees of success. The most successful have grown alongside a switch in emphasis to business-to-consumer. eBay and Music Magpie are probably the best examples of this (Music Magpie is by some distance eBay’s largest seller). This model is still growing fast, and mobiles fastest of all, but is still limited to independent businesses determined to provide legitimacy and good product.

The emerging numbers around environmental savings make alarming reading. Developed countries in Europe are busy exporting hazardous waste overseas (all electronic waste is considered hazardous). The carbon-benefit alone of remanufacturing or re-using consumer electronics is huge – and not just in the consumer marketplace. Businesses are under increasing pressure to demonstrate a lighter footprint to shareholders and lawmakers.  Expect Carbon Credits to be awarded in this segment shortly.

From January 2021, sellers of electrical and electronic equipment (EEE) within the European Union must provide in-store ways for customers to dispose of their electronic devices (on a like for like basis), when they sell them a new product.

In addition, October 2019 saw the EU adopt new Right to Repair standards. This means that from 2021, firms will have to make appliances longer-lasting (it's unclear how this might be measured, natch), and will have to supply spare parts for machines for up to 10 years.

The desirability angle is also growing clearer. Manufacturers and associated service providers often fail to deliver improved consumer experience against a constantly rising price (the components of which merit an entirely new train of thought). In short, what’s the point of paying £1,000 when £400 will get you everything you need? Customised units are also available if you look hard enough.

It follows then that if supply-side sophistication is developing so rapidly, why haven’t more ‘Tier 1’ retailers taken advantage of the growing sell-side? The relentlessly increasing prominence around our scant resources, pollution, conflict minerals and hazardous waste should should be enough, but the economics are now undeniable too.

The Virus has fundamentally changed the balance of power in how we shop and this includes mobiles and other consumer devices. With these innovations in supply chain emerging, online retailers (large or small) can list and successfully sell 2nd Life products to an audience that’s growing by 50% year on year (especially impressive when compared with a market widely in decline). The 2nd Life mobile phone industry alone will be worth 3 million units over the coming 12 months – and that’s just the UK.

It does not take a genius to figure out

1. The impact across retail, of readily available disposals – small incentives applied here will bring in the best quality devices and consumer engagement (a clear advantage over online is waiting to happen here)

2. The confidence of spares available to fix devices, giving a longer lifespan for all electronics – a welcome return to the 80s…

3.    The economics of an exponential growth market across consumer electronics – appealing to short term thrift, environmental concerns as well as transactional profit – not just in mobiles but also tablets, games consoles

4.    More readily available genuine spares. Keeping products original and better value for the insurance industry, reducing costs and increasing quality for consumers and providers alike

5.    The environmental impact benefitting absolutelye veryone – possibly with the exception of those brands that will insist on selling you stuff while pretending to be your friend. Note – consumers are slowly becoming wise to this drivel

The more forward-thinking will be (and indeed are) taking advantage of the perfect conditions for introducing mobile phones and gaming devices into this changing landscape – a landscape where 2nd Life products are embraced by consumers, benefit the planet and make money for those with a business in refurbishment.

Win-win.

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