Culture of electronics upgrading throws curveball for eco-conscious retailers

It’s estimated that within the next five years, the average home will use 50 smart devices. Increasing interaction with more internet-connected products is not only reshaping how we buy electrical and electronic equipment (EEE), but raising questions over how companies can better understand our purchasing decisions to encourage best use, reuse and recycling of these devices.

As more capability gets bundled into smart electronics and appliances, the need for constant upgrades to keep pace with technology is increasing. New research from WRAP suggests that as electrical and electronic products become more complex and smarter, and sales increase (they predict a rise of 19% between 2015 and 2020 in the UK) consumers are seeking out models that are longer-lasting.

Greg Lucas, technical specialist at WRAP explains that durability is not just about the product itself, however, but is a much wider concept which also encompasses how the product is being used.

“We class user guidance, product support and guarantees or warranties as a core component to the product and therefore a core element of durability. Knowing how to use your product is a key example of durability. Providing user guidance in video form, for example, could help consumers to really make the most of the item they’ve bought. Our better appliances guidance, which looks at all elements of durability, is helping buying teams specify more durable products at a key price point.”

But building in better durability may not suit every product. “There are definite differences between consumer electronics and appliances when it comes to durability,” says Lucas. “Consumers are often keen to upgrade their electronics and TVs, which is not always true of appliances. We therefore offer organisations support in developing trade-in services to effectively take back, revive and resell electronic products in particular.”

Alice Ellison, environment policy adviser at the British Retail Consortium, says retailers might do well to differentiate between the different market segments that exist for a particular product category to see if they can cater for that. “There will always be people who want the latest models, but there will also be people who don’t, and so you might need to repair and refurbish in between,” she says.

O2 is one retailer that has captured such thinking. Its Like New platform for refurbished smartphones sits alongside its Recycle trade-in scheme and Refresh, which offers discounted tariffs for customers who wish to hang onto their phones for longer before trading in. O2’s director of sustainability Bill Eyres says the company has worked hard to develop customer options.

“We’re bringing things to market that support customers and make their experience better. We know Recycle is a strong builder of customer loyalty. For somebody who wants to get an Apple phone but can’t afford the price of a new one, being able to buy a Like New phone through us means we acquire a new customer,” he says.

Offering such diverse service propositions has enabled O2 to create a more circular business model. Eyres says that 40% of phones traded in through its Recycle platform are resold back into the UK’s secondhand market. This 40% accounted for more than £150,000 worth of devices in 2016.

WRAP’s research found that 50% of customers were willing to buy quality used products from major retailers – of those questioned, 9% had bought a used mobile phone. Eyres says that customers have become more comfortable with buying like-new devices. “As mainstream players like us have moved in, the level of consumer trust has grown. We can provide that guarantee of quality.”

O2 hopes eventually to take its Like New offering onto the high street and sell refurbished phones in-store. “We’re still working on getting it exactly right through online – making sure that the customer experience is good,” says Eyres.

Could these types of service models work for bigger items like white goods? WRAP tested market appetite for this, presenting study participants with a theoretical bundle of appliances on two-year subscription contracts. Instead of buying an £899 fridge freezer outright, the customer pays a monthly usage fee of £30 with a helpline and call out service built-in. Out of 4,000 participants, 40% were either “very” or “fairly” interested in such offers.

“The leasing of domestic appliances and electronics makes more and more sense to specific parts of society if it’s built around the consumer, especially as more people are renting property and become familiar with service-related offerings like Uber,” says Lucas.

He adds this will enable retailers to access new market opportunities and capture additional sales value from multiple product use cycles. There are challenges however, especially when it comes to engaging customers, transparent pricing, recycling and repair. The increasing complexity of smart devices and appliances can make them harder to fix, or to recover the high value components and materials contained inside.

Lucas acknowledges there will always be trade-offs. “If you take reuse, increased durability is a really good thing – you are making a product in which its inherent value is retained for a longer period. But if more durable products are created, does that give rise to more recycling and repairability challenges?”

On a wider level, these are important considerations for policymakers. Forthcoming changes to the EU ecodesign directive for example, will encourage manufacturers to make products more durable as well as easier to recycle, repair and reuse. Lucas says any new policy needs to be shaped in a way that delivers environmental benefits but doesn’t stifle innovation.

“Industry voluntary approaches can help here as they give a greater level of flexibility and can go beyond what the ecodesign directive is looking to achieve,” he says.

Content on this page is paid for and produced to a brief agreed with WRAP