Refurbished Phones Gain Further Ground

Survey highlights growing interest for refurbished devices

Our annual survey of how and why people buy mobile phones and service plans revealed fascinating differences between UK and US consumers, as the journey to buy mobile connectivity continues to evolve.

Kester Mann, CCS Insight’s director of consumer & connectivity, will be talking about the findings in a free-to-attend webinar today at 3:00 PM GMT. Click here to register, and read on for a quick summary of three of the main results.

Appetite Grows for Refurbished Phones

A significant 60% of respondents in the UK and 56% in the US would consider buying a refurbished mobile phone next time they change or upgrade their smartphone.

This new-found willingness for pre-owned phones reflects the steep price of many premium mobile phones released in the past two years. It’s also a sign of growing acceptance by consumers previously concerned about the condition and reliability of refurbished mobile phones, as well as greater supply of these devices from resellers. One in six people in both markets said they have bought a refurbished phone in the past.

The market for refurbished mobile phones is firmly on the rise. Multiple factors will encourage growth, including the growing residual value of mobile phones, wider options to trade-in or part-exchange existing phones and attractive SIM-only deals. This brings opportunities to new retail players to stake a position in a device market still dominated by sales through mobile operators, both in the US and the UK.

UK Phone Market Continues to Move Online

Nearly half (48%) of mobile phone users in the UK bought their current device online, compared with just 27% in the US. This is evidence of the greater strength of mobile carriers in the US, where two-thirds of phones in use were bought in a store. In fact, a third of people in the UK said that nothing would encourage them to visit a mobile phone shop more often.

The role of online is even more conclusive when it comes to researching mobile phones. In the UK, 40% of respondents researched devices this way, twice the number that went into a store (20%).

The trend toward buying phones online highlights the importance for channel players to invest strongly in their web presence. Offering a best-in-class experience could be a huge differentiator. But it’s not all doom and gloom for bricks-and-mortar stores. Our survey also identified many factors that would tempt most people to visit high-street phone shops more often. These include a more welcoming environment, better options to test out mobile phones, more-helpful staff and a wider retail presence.

People Change Mobile Operator Relatively Infrequently

Our survey showed low levels of switching in the UK and US. In both markets, 23% of subscribers have never changed their operator and a further 25% only last did so more than five years ago.

The lack of movement is the fruit of strong and successful efforts by mobile operators to retain subscribers considering leaving, some inertia within the market and generally high levels of customer satisfaction.

Finally, in the UK, an impressive 34% of people said they are aware of Ofcom’s text-to-switch regulation, which was only implemented in July 2019. We believe that strong marketing campaigns, mostly by challenger brands and mobile virtual network operators, have boosted awareness. And significantly, about one in three respondents said they would be more likely to change mobile operator within the next 12 months because of this regulation.

CCS Insight clients can download a report with full analysis of the findings here. If you’re interested in learning more, please contact us.