In September, hundreds of people working in the mobile and ICT industry gathered at Islington’s Business Design Centre for the Mobile News XPO in partnership with Tech Live.
The day was full of free seminars, panel discussions and exhibitions where professionals could showcase their brands, as well as meet up with others in the industry to develop new business opportunities.
The various seminars covered different topics relevant to the mobile industry today, and one that gained a lot of visitors was the discussion on the circular economy.
The discussion was led by moderator Simon Bryant of CCS Insight, and the panel was made up Nxt2NU commercial director, Martin Van Den Hout, MTR Group managing director, James Goddard, UR.co.uk IT director, Chris Hill, Entertainment Magpie group chief commercial officer Jonathan Miller, and Likewize sales director, Adam Arner.
Moderator Bryant started off the seminar by revealing that 1.3 billion phones will reach their first end of life cycle this year and that a very small percentage will go through to the second hand market.
But the first point of focus for the panel was about the cost of living crisis and how this could be affecting the second hand market and the consumers.
What are the ways that this industry seems to be impacted by the cost of living crisis?
Miller: What we find as an organisation is that cost of living is probably generating a level of interest in second hand and quality second hand products. There’s people that will look at cheaper, high quality alternatives to buying a new product, but people are analysing their monthly income and expenditure alongside that as well. The secondary market gives people more choice, such as a prescription where you can pay for something monthly rather than buying outright.
Van Den Hout: We focus on the B2B market so we don’t sell products to end users, but we’re seeing the same trend in the B2B market. Customers are trying to save money by purchasing refurbished devices, while trying to get money back from their old devices.
Before the cost of living crisis, were you seeing stagnation in the market? Is there still headroom and potential in the secondary market?
Arner: I think the original equipment manufacturers (OEM’s) aren’t growing significantly. We’ve seen that with Apple and Samsung not skyrocketing like it used to. So I think people are owning devices for longer, however we’re seeing a change in terms of how the networks and OEM’s are approaching that. They recognise that potential, they are delivering more and more refurbished options out there, and so in terms of driving the circular economy we’re seeing just as many devices if not more devices going off the shelf from those positions, there’s just a pivot in terms of focus for those players.
Goddard: I think covid had an impact- we personally saw strength through covid as people could work from home or contact loved ones, so it’s difficult to measure. We definitely saw a benefit through that period and that’s been sustained so we haven’t seen much stagnation.
From a consumer perspective, is there a link between buying a second hand device and sustainability or is it about affordability?
Hill: I think yes, consumers are influenced by the quality and price points, but they also care about the ethical responsibility that they take when they buy that refurbished device. It is something that we try to push as part of the whole ethos- encouraging people to join the circle and stay in that circle. So the idea is that everything is designed to keep them in that circle and understand when you’ve had your use out of the device, you want to upgrade or trade- bring it back to us, the case, the device, the box, everything and it can be reused. And I think the consumer is smart enough that they’re now ready to take on board that education and I think that will keep the growth.
Miller: I think what we’re seeing within our customer base is that people are understanding more about sustainability and growing awareness of it. People are recognising that recycling and reusing a product is good for the environment and hopefully good for your pocket too. The amount of precious materials that go into manufacturing a mobile phone, clearly they need to be mined and actually people are becoming aware of this.
Our research highlighted a big difference between demand and supply of second hand devices- do you find there isn’t enough supply there?
Arner: From a device protection space- absolutely. We’re trying to provide the best quality devices in return for broken or lost claimed devices, so yes, there’s constant sourcing and supplying issues so it’s definitely problematic, but there’s a growing awareness of the repair capability that can be brought so we’re constantly trying to upscale devices and get them to the right quality too.
Miller: We’re always trying to source more products to meet the growing demand in the marketplace. For example, we’re trying to roll out kiosks with Asda where people can walk into an Asda store, place their mobile phone in a kiosk, get an instant evaluation and we’ll pay them straight away into their account. So again we’re trying to drive awareness that recycling is good for you and the planet, and for us we’re trying to drive incremental products into our business as well. There’s a lot of products still sitting around in people’s drawers at home globally, and we’ve got to educate people to bring that product back to us.
Hill: We’ve all seen products come in and we can’t work out what somebody has done with it to get it to that stage, so it becomes a zero value item where it’s really only for scrap. What we need to do is educate people to look after it better so that it becomes a more valuable product both to them and society. But I also believe if you go back to the manufacturers right at the start of the supply chain, it’s not about manufacturing the smartest, fastest, smallest, most powerful device, it’s about creating a device that can be repaired, that does have replaceable items in it, and therefore further down it can have multiple lives.
Do you see demand increasing for pristine devices?
Van Den Hout: We only sell pristine. For our B2B channels, step one is to create trust, because how do they know what kind of device they get? What does Grade B, grade A+ mean? So we set pristine only for B2B and it gives them confidence as they take it out of the box and it looks like a brand new phone.
Goddard: I think there is a shift towards lesser grade products, more awareness that we’re seeing. If there is a universal grading system that people work towards, that would certainly help create some standardisation that gives us all confidence that can be brought in and compared against.
Miller: We sell all graded products, and that’s not to say that is without its problems as every phone is unique and we spend a lot of time getting it to the best standard it can be before it obviously leaves our facility. There’s lots of opportunities now in terms of parts utilisation, polishing solutions that can improve the standard of that second hand product as well, and it’s all about education and trust with the customer to make sure they are clear about what they are purchasing.
Hill: Every one of our devices has a predicted outcome and this insight gives us the ability to target devices to recipients who want a specific grade. We know who will want a C grade and our customers know what they’re buying and may not want pristine if they’re buying several of them. The key is bringing devices back up to a standard where they can go at least one more life or another- that’s the aim. It’s giving them enough to keep them in that circle.
What keeps you up at night?
Van Den Hout: E-waste, it sounds cliche but we keep seeing the pile growing and growing. If we can do something about e-waste by creating trust and tackling it, it will make a lot of difference.
Goddard: The future in general and the way it could turn. Second life is born out of first life and with all of the chipset shortages there won’t be a second life in 20 years when all of that comes to an end. So what the future looks like and how do we as businesses work with manufacturers to enable a sustainable future.
Hill: For me it’s about how we’re going to change the direction away from replacing the energy we use and it’s little spoken about how we use less energy. I get excited by new technology but I do want to see more drive and it does make me stay awake at night thinking ‘how do we reduce that consumption’ as we will always grow to fill it and demand more, but what we need to do is use it less and use it more efficiently.
Miller: The whole waste story. If we do absolutely nothing, then our amount of e-waste will more than double by 2050. Hopefully we’re all part of the solution but we do have a long way to go. If we don’t do much in the next 12-18 months, we’re not starting that journey. So our biggest challenge is getting momentum behind this.
Arner: Everybody needs to be educated on what we can do to recover items, what can we do to deliver a second life, how that impacts on waste, and we need to expand this behind mobile devices but we look at the smart home space too. We need businesses involved, OEM’s, the guys that are building these things and recognise the impact that has but also build their services and how they interact with consumers in a way that is much more sustainable to bring in the circle.