The market for refurbished and used phones is projected to expand significantly with an annual compound rate of 9.78% through to 2030. This growth will see the market’s value increase from USD 6.74 billion in 2022 to an estimated USD 13.41 billion by 2030.
As the market grows, a corresponding increase in the demand for trade-in solutions can be predicted, providing both consumers and businesses with a range of fresh advantages. Customers will no longer need deep pockets to access premium tech devices. Companies will be able to boost sales by lowering the bar for such products. Everyone’s a winner.
But as a business, what form of trade-in should you offer? There’s the in-store trade-in, that involves personalized exchanges in a store setting. And then there’s the online version that allows for transactions to be conducted entirely through digital platforms.
Both have their perks, offering a unique set of advantages that align with the specific needs and objectives of your business. Or you can adopt both and cast a wider net into the market to expand your reach and truly ramp up your revenue.
Below we’re going to compare both types of trade-ins and reveal each of their benefits to help you decide which version best aligns with your business strategy and customer needs.
How trade-ins boost sales and broaden customer opportunities
A trade-in is a transaction where customers exchange their used items, such as electronic devices, for a discount on new purchases. The used items are typically refurbished, resold, or recycled. Not only does this help extend device lifecycles but both businesses and customers can enjoy a whole range of benefits.
Studies show that consumers are inclined to trade in their old phones for new ones if the process is easy and offers good value. According to the research, 21% have sold or traded their phones with companies like retailers or mobile network operators, up from 16% last year. Additionally, 80% are willing to trade in their current phones when buying their next one.
With a well-integrated trade-in solution, your customers can expect the following benefits:
- Cost savings: Customers can upgrade to new products at a lower cost by trading in their old items.
- Immediate value: They receive immediate credit or discounts towards new purchases.
- Environmental responsibility: Trade-ins support sustainability by promoting the reuse of products. Your customers also no longer need to ponder about what to do with the devices they no longer use, which helps reduce the number of devices laying dormant and turning into e-waste.
- Convenience: Choosing a trade-in solution that offers transparent processes and is easy to use can enhance the overall shopping experience.
- Access to latest products: Trade-ins make it easier for customers to access the latest technology or models.
By providing customers with more opportunities to access premium devices, you’ll not only experience a lift in sales but also enjoy a spectrum of benefits, including:
- Increased sales: Encourages customers to purchase new products.
- Customer loyalty: Builds long-term relationships and repeat business.
- Market expansion: Attracts new customer segments, including eco-conscious consumers.
- Inventory management: Helps in managing product lifecycles and inventory.
- Sustainability goals: Supports environmental initiatives and corporate sustainability objectives.
- Competitive advantage: Differentiates from competitors by offering added value to customers.
Trade-ins offer a cross-over of benefits to both parties, making them an attractive option for businesses and customers alike. However, for businesses, one question remains: should I opt for an in-store or an online trade-in solution? That’s exactly what we’re going to delve into below.
In-store trade-ins level up the personalized experience
In-store trade-ins involve a direct, personal process where customers bring their used products to a physical store. Implementing an in-store trade-in solution requires a strategic approach from the sales agents, since customers may not proactively opt for a trade-in or even be aware of this offering.
Usually, the opportunity tends to arise naturally, in conversation where an employee can introduce trade-in as a cost-effective alternative that gives the customer access to a premium product.
Store agents grade the device by answering four simple questions, and then provide the customer with a quote. The same questions will also be used by Foxway upon receiving the device to minimize the chance of discrepancies in grading.
If the customer agrees to the offer, they would usually receive store credit for the residual value of their device. Their device will be registered in the Foxway system and they’ll receive the reimbursement on the spot.
In-store trade-ins can be part of your sales agents’ KPIs. By motivating your team to actively promote trade-ins, the results can lead to increased customer engagement, higher sales, and a more successful trade-in program overall.
This seamless process can reward you with a variety of benefits for using in-store trade-ins, including:
- Personal customer service: In-store interactions offer personalized service and immediate assistance, enhancing customer satisfaction.
- Instant transaction and gratification: Physical stores allow for on-the-spot appraisal and immediate exchange, providing instant gratification for customers.
- Building trust and brand loyalty: Face-to-face interactions can foster trust and deepen customer loyalty.
- Direct feedback and market insights: In-person interactions provide valuable insights into customer needs and preferences.
- Showcasing products and upselling: Physical stores offer the opportunity to display products and upsell more effectively during the trade-in process.
A unique characteristic of in-store trade-in is that it provides a more intimate approach that humanizes the sales process. Consumers ask questions, agents provide answers, and a rapport is built, fostering trust and loyalty that amplifies the customer experience.
Personal interactions like this will leave a lasting impression, leading to higher customer satisfaction and repeat business through positive word-of-mouth referrals.
Catering to the demands of the digital era with online trade-ins
Online trade-ins allow you to expand your reach and capture more of the global market. It’s an agile approach that allows you to meet the expectations of customers in the digital era.
With online shopping in general, customers expect a high quality of service delivery. At Foxway, we believe that the key to a successful online trade-in program is setting up high standards for customer communication and transparency in processes.
Depending on your company’s own IT resources and requirements, we have two main options on the table:
- a full integration via API to your existing e-shop to offer a premium customer experience and simplicity
- or a more simple white-label solution in the form of a website hosted by Foxway that will have the look and feel of your brand, but takes less effort from you to set up and manage.
The final choice may depend on a multitude of variables ranging from your existing operational processes to the overall customer journey you wish to have.
However, the true value of both options comes from the customized approach we adopt for the implementation process. There is no “one size fits all” – the best solutions are built in cooperation with every partner, and together we will find the one for you.
Regardless of the specific technical set-up, an online trade-in solution can offer unique advantages such as:
- Wider reach: Online trade-ins break geographical barriers, allowing businesses to reach customers worldwide. This global access increases the potential customer base and enables 24/7 operations.
- Data collection: Online platforms provide a rich source of customer data, including preferences and buying habits. This information is crucial for tailoring marketing strategies and improving product offerings.
- Market expansion: The online model particularly attracts younger, tech-savvy consumers who prefer digital transactions. This expands the market to include a diverse audience that values convenience and technology.
- Customer experience and awareness: Businesses can seamlessly incorporate trade-ins into the online shopping experience, allowing customers to effortlessly discover these options while browsing for devices. By strategically placing visible prompts alongside product prices, customers are naturally drawn to and guided through the trade-in process. This streamlined integration not only enriches the shopping journey but also elevates awareness and uptake of trade-ins.
Online trade-ins can reward you with a range of benefits that extend far beyond the conventional in-store experience. It’s an easier way to extend your reach and capture the market while gathering crucial data that gives you insights into customer behavior. Depending on your market, online trade-in can be the perfect sweet spot for the tech-savvy customers who have found their comfort zone in the perks of the digital era.
Creating a win-win situation with trade-ins
The rise of trade-ins presents a lucrative opportunity for businesses to boost sales and accelerate growth. It lowers the financial bar that once prevented customers from reaching over and accessing the market’s favorite devices. Now, with trade-ins, they have more options for accessing their favorite brands and models.
For businesses, this provides an easy way to pull customers closer to their brand, increase sales, and enhance their customer lifetime value.
Whether you choose in-store for a more personal touch or online for broader reach, integrating trade-ins can create a ripple effect that fosters brand loyalty and stimulates long-term growth.
If you want to get started with trade-ins, Foxway provides support throughout the entire process. We assist with everything from selecting the right technical setup and integrating tools to providing essential training and resources. This makes it easy for you to implement a successful program that allows you to unlock the full potential of trade-ins and maximize their benefits.
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Head of Retail & Online Channel
Recommerce Retail & Online Buyback Buyback Trade-in-value End-user Experience