The secondary smartphone market has expanded exponentially in the past few years.
Whereas in the past, consumers held onto old smartphones, it’s now the norm to trade in old devices for cash or store credit toward an upgrade. Customers feel the pressure to upgrade to the latest and greatest smartphone even when their current devices work perfectly fine.
Because exchanging devices has become so mainstream, retailers have the opportunity to profit. The business is bowing with the influx of used technology and expanded consumer choice, and retailers need to understand the changes.
Long gone are the days when retailers were excluded from the trade-in market. They now have the chance to cash in with the trade-in industry and bring in new customers through partnerships.
Here are four predictions I see for the industry this year to underscore the trend:
Pre-owned phones will become the norm, not the exception. Smartphone manufacturers are continually upgrading their technology, with Apple expected to release a second handset (iPhone 7) later this year. Certified pre-owned and refurbished devices provide a viable option for those who would like to have up-to-date technology with a moderate price point that matches their budget. Customers can save further by bringing their pre-owned devices to the network of their choice and choosing a plan that rewards them for it with a monthly savings of about $15 or more a month.
Secondary devices will have new homes in foreign countries. Today’s cellular devices will have as many as three owners during their lifespan, according to Gartner. Devices currently in circulation may still be in the hands of a customer in the year 2020, but that doesn’t mean they’ll still be in the U.S. These second-hand devices are also a hot commodity in foreign markets.
Just because the iPhone 6S and SE are the newest Apple phones in the U.S. doesn’t mean that other countries are up-to-speed yet. China is a huge market for iPhone 5S and 6, while iPhone 4 is particularly popular in Africa, and India too will see its fair share of Apple devices this year.
Damaged devices will become widely accepted as trade-ins. As repair technology becomes more advanced, companies are able to absorb the cost of repairs and refurbish devices for resale. Rendering a device obsolete just because of a small crack in the screen is a waste of viable technology. It’s also advantageous for companies to accept damaged devices; once customers realize how much a repair may cost, they may be more apt to trade-in the damaged device for a credit towards a newer model.
Damaged devices are also valuable for the small amounts of precious metals each phone contains. Hundreds of thousands of phones are actually – quite literally – a gold mine.
Mobile carriers will outsource disposal of used devices. As damaged devices become widely accepted, mobile carriers will likely see an influx of devices being traded in. Many devices will simply need to be wiped of old user data and can return to the consumer market. However, devices that need repairs will need more TLC before they can be resold.
Here’s where trade-in giants step in. Mobile carriers don’t have time to evaluate and refurbish devices when they’re busy selling talk, text and data plans. Carriers can easily outsource the disposal of those damaged devices to electronics resale companies like NextWorth. Once NextWorth has control of the damaged goods, it’s up to us how and if they re-enter the market for another life.
Retailers who want to jump on the mobile trade-in bandwagon can do so by outsourcing to trusted partners. We’ve worked with Metro PCS, Nebraska Furniture Mart, Worldlynx Wireless (in Canada) and Lenovo Small Business. In addition to a secondary revenue stream, trade-in locations at stores bring in customers who might not have stopped in otherwise.
Diana Stuparu is marketing and e-commerce director at NextWorth Solutions, which has provided turnkey in-store and online CE trade-in platforms for major retailers nationwide since 2006.