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August 17, 2022
At $10 billion, the refurbished market for consumer electronics is one of the largest in the tech space making it impossible to ignore. Moreover, with no signs of it slowing down any time soon, the refurbished tech may just be the future of consumer tech.
Many consumers have come to realize that refurbished could mean a lot of other things apart from used. Refurbished products are typically manufacturer or store restored products that come at an affordable price since they have been used as demos, damaged during shipping, returned for minor defects, or sometimes just buyer’s remorse.
The rise of the refurbished market
Starting in 2017, more consumers became aware of the refurbished market and started opting for these devices over new. According to Counterpoint Research, the global refurbished market for cell phones was up 13% in a market with about 140 million products.
The growth has not only been seen in mobile devices as consumer goods in general, such as in the PC and laptop segment have been experiencing a renaissance. Researchers and experts attribute this to educational institutions, government offices, startups, and corporations preferring refurbished products due to the relatively lower cost of acquisition.
Consumers have also not been left behind with a recent survey of more than 1400 online shoppers finding that 94% have recently bought refurbished tech items in the recent past. More than three-quarters of the participants asserted that they are likely to buy refurbished goods in the future.
What is driving the refurbished tech industry
Greater awareness – In recent years more consumers have realized that there are home and kitchen appliances, TVs, wearables, digital cameras, and other popular consumer goods to be had for cheap in the refurbished market. Having realized that refurbished does not mean used or broken, they have been buying these goods, and this has resulted in the renaissance.
A slowdown in the markets – In the cell phone market, there has been a significant slowdown in the United States and Europe, and this has forced manufacturers to get into refurbishing. By refurbishing mobile networks, manufacturers and repair stores can offer full life cycle services and help consumers get better value for money on their devices.
New innovations – Even though there are many factors that can be blamed for the slowdown in the tech market, rising costs of new devices due to new technologies have also played a massive role in the shift towards refurbished. With the likes of Apple and Samsung introducing shiny and innovative features such as displays, cameras, and processors more and more frequently, the costs have been rising in line with prices and this has pushed many consumers out of the new device market.
Competition – With new smartphone manufacturers such as Oppo and Huawei offering budget phones, major companies have had to shift to selling refurbished to prevent the loss of market share and revenue. Some of the major companies such as Motorola, Apple, and Samsung have recycling and take-back programs that accept old consumer tech, which can be repaired and then sold as refurbished.
Why it makes sense for manufacturers to adopt refurbishing
According to a Persistence Market Research report published in 2017, the global used phone market is estimated to have a compound annual growth rate of 9 percent, and by 2025, it is expected to top $390 billion in value.
Apple also copped a lot of flak for forcing its customers to buy new iPhones through planned obsolescence and for making phones harder to repair. A healthy circular economy where devices can be returned to the manufacturer and be refurbished is the best solution. This is especially beneficial if you take into account the consumer’s fight for the right to repair. According to Serge Verdoux, managing director of Back Market in the U.S. “most consumers are now aware of planned obsolesce.” The best way to keep these consumers onside is to extend the life of the product through sustainable design and buyback and recycling programs combined with refurbishing.
Manufacturers with an established brand such as Apple and Samsung stand to gain a lot from selling refurbished devices. Consumers are more likely to give up the right to repair if they can get a refurbished phone that works as good as new at a considerable discount from the manufacturer. Manufacturers can also control their products and brand name as they can repair and certify products once they are in excellent working condition.
For companies such as Apple that are interested in marketing themselves as environmentally conscious, getting into refurbishing is a good idea. Gadgets that would have been thrown away to fill and pollute landfills would have a longer life cycle which would save a lot more resources and reduce emissions. A report by US PIRG Education Fund showed that if everyone with a cell phone owned it for one more year, it would be the equivalent of grounding 636,000 cars every year.
Refurbished vs repaired
While I am all for the right to repair, refurbished tech has advantages over repaired that include:
1. Like-New Condition – Unlike repaired items, refurbished items have everything repaired and certified to ensure that the device runs and looks as good as new before it is sold.
2. Warranties – Repair shops often do not provide warranties as compared to original manufacturer refurbished items that often come at least a year’s warranty.
3. Support –In many instances, the refurbished product will have the same tech support you would have the same access to tech support a new device has. That means the manufacturer has to offer support in case the device has issues before the end of the warranty period.
Wrapping up
As consumer demand continues to rise, refurbished technology is undoubtedly the future of consumer tech. Selling slightly used or older devices can be instrumental in helping manufacturers bolster their bottom line, minimize the threat of e-waste, and improve the reputation of their brands. There will always be people who will take a pre-owned device, open box, or slightly scratched device as long as it works, is of the right model, and brand. Working together, manufacturers and consumers can work towards win-win outcomes with refurbished tech, and by doing so, will have a positive impact on the environment.
Article by Stewart McGrenary, Director at iPad-Recycle
View article here.
