Second Hand Smartphone Sales Booming Retailers + Carriers Not Doing Enough Claim Research Group
Research group Gartner claim that retailers need to step up their marketing if they want to capture used-phone business to replace lost sales of new phones.
The issue is similar to what happened in the game console market where used consoles cannibalised new console sales until retailers started offering rebates for old consoles.
Gartner claim that mass retailers should focus on consumers who are buying new models in an effort to take the old models out of circulation.
A survey of consumers found that 60 percent of consumers replace their smartphones because they want additional functionality or just want a new device. In Australia 64 percent of smartphones that people replace are being reused, with 23 percent being handed down to other users and 41 percent being traded in or sold privately.
Seven percent of replaced phones end up in recycling programs. “Continued demand for high-end used devices will increasingly impact primary-unit sales” and motivate carriers and others to look into the second-hand market, said principal research analyst Meike Escherich.
Escherich told US publication Twice “The growing number of privately sold phones will stir up competition in the take-back market and drive carriers and refurbishers to engage in more aggressive marketing campaigns and new incentives,” she added. He said retailers “need to have a strategy for turning used devices into a positive asset,” she said. Trade-in programs should target early-adopter tech enthusiasts, who account for about 25 percent of smartphone users, Gartner found.
Fifty-three percent of the tech-enthusiast respondents said they would replace their smartphones in the next 12 months, with almost half of them saying their replacement purchase would be driven by new features or functions available only in new devices, Gartner said.
“For hardware vendors, this group of self-proclaimed tech enthusiasts is of particular interest because trade-ins provide their channel partners with hardware that can be reused for warranty replacements, and for extending the brand reach into user segments that can’t afford these particular devices at the original purchase price,” said Escherich. “Perhaps most importantly, however, is that tech enthusiasts tend to show high brand loyalty, indicating a good probability for future purchases of the same brand – with the extra credit earned via trade-ins often used for upgrades on their new purchases.”