At CCS Insight’s Predictions for 2024 and Beyond in-person event, several companies involved in the circular economy discussed the state of the sector and gave an industry perspective on the second-hand market. This is the second in a series of three articles revealing highlights from the panel discussion: you can find the first part here.
Likewize was represented by Ashleigh Foggo, Senior Manager of Services, who has more than 14 years of experience in the trading industry. She explained that Likewize is a “device lifecycle company” that helps its partners to deliver their consumers with solutions for the entire journey they have with their devices. These partners include network operators, retailers and banking firms. The services offered by Likewize cover protection and insurance, helping with product repairs and device upgrades.
Ashleigh shared recent research conducted by Likewize that indicates 80% of customers upgrading their device aren’t asked if they would like to trade in their current product. To address this, Likewize believes that it’s necessary to “simplify the journey and find a way to say yes to the customer”. A crucial element of this is that staff need to be more confident the trade-in journey will be frictionless and won’t make the customer or the employee “jump through hoops”.
Although most companies that Likewize works with believe that adopting circular economy practices “makes absolute sense”, a barrier is often “jammed road maps from an IT stack point of view”. Ashleigh pointed out that in most cases “everyone wants to do the right thing, but it might be three years away before you can get the absolutely optimum product”.
This is where Likewize has been particularly successful, working with partners to deliver solutions integrating into the “buy flow journey”, conducting IT work for its clients and “delivering the technical stack” which is often hard to implement.
Another common challenge that Likewize is helping customers overcome is proving the business case for circular initiatives. Ashleigh stated the importance of showing network operators and retailers that a successful programme can help them understand that they “will sell more, and it’s a responsible thing to do”.
CCS Insight estimates that the circular economy for smartphones, tablets and smartwatches had a net value of $31.5 billion in 2022 and expects further growth in coming years, with sales in the organized second-hand market exceeding 182 million units in 2023.
Likewize believes it’s important to fully understand the wider impact a strong circular programme can offer a business, notably that a customer who trades in a device will “be happier, more loyal and remain a customer for longer”. However, quantifying this can be difficult, and Ashleigh urged companies to invest more in market insights to really understand the impact of offering trade-in and other value-added services.
Reflecting on the positive momentum in the industry, Ashleigh noted the “massive changes” she has seen over the past couple of years. She believes that it’s no longer possible to launch a device without having a trade-in message as part of the go-to-market plan. She also noted that operators and retailers are now working much harder on repair solutions. Notably, Likewize believes that 25% of customers who break the screen on their smartphone don’t bother to get it repaired. This can lead to customer dissatisfaction and can even result in some people looking to other places to replace their device as they haven’t been getting the most out of the service they’ve subscribed to because their phone is damaged.
Concluding, Ashleigh felt that there’s still a lot of work to be done to professionalize the market for used devices. Most importantly, the introduction of a universal grading scheme would be a major step forward to help build customer trust in second-hand devices, something that CCS Insight agrees with strongly. Core to this will be automating facilities and using robots for testing — and eventually grading and “cosmetically restoring” products so they’re in the best condition possible for their next life. This will ensure that when consumers buy a used product, they can do so with confidence.
Thank you to Ashleigh and Likewize for contributing to the insightful discussion. You can watch the full panel below.
You can watch the replays of our online Predictions event and download a booklet containing all 85 predictions on our website.
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