With AO snapping up Music Magpie and Vinted announcing the launch of a dedicated category for electronics, Retail Week takes a look at what some retailers are doing in the secondhand tech space, and if others are missing a trick.
While some consumers flock to buy the latest iPhone, tablet or even VR headsets, there are many who prefer to buy secondhand.
Apple, Samsung, Backmarket and mobile network operators EE, O2, Vodafone and Three are obvious choices to source certified secondhand tech, but more retailers are moving into the space as it gains popularity.
In a recent survey by Trojan Electronics, 64% of people said they bought a refurbished or repaired electrical item in the past, with 57% of those doing so to save money and 6% primarily doing so to be environmentally conscious.
The report also highlighted that the global refurbished electronics market was valued at around $85bn (£64bn) in 2021 and set to grow to $273bn (£205bn) by the end of 2031.
With the consumer demand evident, it’s no wonder major retailers are expanding their horizons.
eBay is one of the leaders in this field, with a host of refurbished phones, doorbells, speakers, Ninja air fryers, Dyson hair dryers for sale with savings between 30% and 60% of its original retail price.
Electricals giants Currys and AO both have their own recycling and repair centres as well as trade-in services, with the former launching a campaign to highlight its standalone repairs business having received over 65,000 products through trade-in last year.
In an announcement to the City, AO said it had acquired Music Magpie for £10m to ”achieve our strategic ambition of becoming the destination for electricals” through enhancing its consumer tech offering.
TikTok Shop added a separate category for refurbished tech products last year following over 100 million views on the hashtag “used iPhone”, while Amazon sells a wide range of certified iPads, iPods, monitors, consoles and watches.
Destiny Chatman, consumer expert at TopCashback, says refurbished tech items are a “lifeline” for many who are in need of tech for school or work and more companies should expand their offering.
“With platforms like TikTok Shop and Amazon selling refurbished tech, retailers who don’t follow suit risk missing out on a massive consumer market,” she says.
Risky business
While it is championing repairs, recycling and refurbishment of products, Currys chief executive Alex Baldock said last month that he would like to see a “radical reduction or entire cut” of VAT on refurbished electricals to keep them out of landfill.
The UK government is also trying to eliminate electronic waste by considering making sellers pay the full cost of consumer recycling under a new scheme, which could deter retailers from offering such services.
Though this may put off some retailers, it won’t stop thrifty consumers from looking elsewhere as shoppers chase affordability and sustainability.
Popular pre-loved fashion site Vinted is among those that have branched into buying and selling secondhand electronics, but there are warnings for such platforms selling devices without being authenticated.
James Murdock, co-founder of circular tech company Alchemy, says it is “risky” to base a purchase on someone’s personal judgement of the device’s condition, and that electronics are a “completely different category” to clothes.
“In the circular economy, we’ve spent a lot of time developing specific grading systems for electronics that are clear and easy to understand,” he says.
“Buying a device on Vinted comes with its risks because there’s no guarantee for it. Unlike clothes, which you can often alter or mend yourself, electronics are much harder to fix without professional help.”
For retailers and platforms selling used tech, ensuring devices are certified and graded will likely result in better customer satisfaction and repeat purchases.
Gaining share
With the demand continuing to grow and newer products such as smartwatches and virtual reality headsets up for resale, now may be the time for more retailers to get in on the act.
Chatman says that while refurbished items aren’t always cheap, retailers can still cash in.
“Retailers typically lower prices based on cosmetic damage, such as scratches or chipped screens, but many refurbished products still function well.
“This allows retailers to sell them at prices that are close to original pricing, generating profit from products that can’t be sold otherwise.”
Murdock echoes this, adding that selling secondhand tech is often a better commercial option for retailers as when it comes to premium brands, “the margin on secondary products is considerably higher than new in most cases”.
The benefits to retailers are clear, but the problem now is battling for a share of the market.
Trojan Electronics research shows that 70% of consumers buy refurbished electronics online, with 80% of those doing so on online marketplace via eBay, 13% through a retailer’s website and 7% on a manufacturer’s website.
There is scope for retailers to push their offering online and take some of the monopoly away from marketplaces, and Murdock thinks this can be done by showcasing refurbished products in addition to new.
“Ideally, retailers would sell both new and refurbished devices,” he says.
“New devices are part of the circular economy, and we need early adopters to keep buying them to keep the refurbished market moving. Selling new and refurbished devices doesn’t need to be mutually exclusive.”
He believes more retailers should explore refurbished tech, but they’ll have to make sure products are well-advertised, authentic, trustworthy and affordable for customers if they want to break ground in an increasingly popular market.
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