Mobile recycling has evolved over a number of years from being an online service to
something that is offered on the high street through a number of trade-in services.
Network operators are starting to see the benefits of this market, and are therefore increasing investment and expanding their reach into the recycling space.
However, online recycling comparison site comparemymobile.com explains to Mobile that consumers still face a number of barriers when it comes to recycling a mobile device, with the new market entrants rivalling online recyclers.
Director Ashley Turner believes that the biggest problem facing mobile recyclers comes from trying to find exit routes for recycled devices. Online companies are faced with being unable to offer customers instant payment – a service he claims consumers now want – explaining ‘people just prefer hard cash’.
He says: ‘At this stage I think the main risk to online recycling is from network operator stores and phone stores that handle the upgrading of contracts. Voucher schemes have been offered by recyclers for years, and people just prefer the hard cash. Stores and networks, however, have the ability to tie the recycling into the upgrade process – the consumer still gets far less than comparing online, but the process is very simple.
‘One of the biggest challenges faced by a mobile recycler is finding profitable and reliable exit routes to maximise margins. There are many options such as shipping the phones abroad for recycling, reselling grade-A stock into insurance channels, refurbishing and selling on online market places such as eBay.
‘You can see more developed mobile recycling solutions – such as Gazelle in the US – that has its own certified shop, which allows it to cut out fees from market places, ship abroad and command its own RRP. It has executed this very effectively by educating its customers through growing its social and email marketing channels to raising awareness, as well as other traditional marketing routes such as TV and PR.’
UK companies have used similar techniques to boost mobile recycling, however this has primarily come more from recycling companies than from the MNOs themselves. Online recycler Envirofone is owned by Redeem. CCO Mark Chambers tells Mobile that, when it comes to mobile recycling, the UK is ‘one of the most advanced in the world’, with 35% to 45% of phones recycled and then sold. However, despite this, many consumers are either unaware, or untrusting, of the recycling process.
Research from comparemymobile.com found that the main issues come down to trust, price and condition.
Turner says: ‘There is a good uptake in the UK; larger stores such as Envirofone and Mazuma Mobile raised awareness through TV advertising, and now that exposure is reduced a lot of the high street stores and carriers offer recycling as part of the upgrade process. The key reasons for people not wanting to recycle are because they want to keep the phone as a backup, are not incentivised to recycle their device, or are worried about personal data.
‘Trust is a problem because most consumers have not heard of some of the brands featured on online comparison sites and in a general Google search. They are keen to see trusted reviews and signals that others have had success with the whole process.
'Price also comes into it as when going direct to recycling stores and, more so when being offered a price in store, consumers are often disappointed with the value offered. For example, a quick search on a popular device such as the iPhone 5S 16GB unlocked will show that the prices offered are quite different. Carphone Warehouse offers £105, EE offers £170, but our top price is £201.
‘There have also been issues with the condition of a handset and the grading many different stores offer in terms of what's considered new/working/broken. Many consumers send in phones with considerable damage to the screen and casing expecting a working value but they have not read the conditions applicable to receive that value. This creates confidence issues in a mobile recycling service.’
A ‘long way to go’
Redeem’s Chambers says the company has not come across many consumer barriers to mobile recycling. He explained that while data may once have existed as a reason to not recycle, that issue is no longer relevant. Chambers claims that the issue now comes down to consumer ignorance about the value of a device.
He says: ‘I don’t think there are many barriers other than time constraints, and a lot of people not even knowing about phone value. The lower-value phones will be collected up for a while, whereas a consumer is more likely to recycle a higher-priced phone as they can get more money for it.
'Historically, data would have been a barrier but now it’s quite a simple process. The data fear is gone and this is why we’re seeing so much growth in terms of being able to transfer data over phones.’
Chambers believes there is still a long way to go with breaking down these barriers, and explains that as more operators move into the market, they can do more to help. He says that the mobile industry has previously been reluctant to invest in mobile recycling but Redeem now manages recycling schemes with O2 and, more recently, Three.
He says: ‘Now that all the MNOs have bought into this, recycling is definitely a good thing to do. Many of them couldn’t see B2B benefit early on – O2 was the first, and it found real value. It saw it quite early on as a value market; luckily the market is competitive and everyone sees this as marketing fund. We’ve given £100m to O2 customers in five years – consumers will spend that with O2 and it hasn’t cost the network anything.
‘Some of the networks got there quicker than others because recycling wasn’t really on their radar, a lot of them haven’t taken it seriously until now; things are changing and the market has awakened. The MNOs now realise that there is free money out there to offer customers.
‘O2 clearly does a lot and it’s the one to watch as the way to do it – it reinvests some of the money back into marketing. Others don’t promote it as much, but the fact that Three has now come to market with this means I’m sure others will do the same. They will push it more and more because for the MNOs it’s all about retaining customers.’
The process of sending a mobile phone off for recycling can be quite tedious, but Turner explains that by providing simple instruction to customers, as well as sending freepost bags, MNOs can make the process easier. He feels that communicating with the user is key and that it’s ‘all about how tight the recycler’s process is’.
He says: ‘The more equipped recyclers are handling communication on their websites and in their email communication. The larger companies that handle the recycling for networks and stores simply haven't built the communication into white label solutions yet. Operators can do more for mobile recycling by offering email communication, providing freepost bags, simple instructions and promoting trust through thorough data cleansing.’
For Redeem, Chambers feels that the biggest change operators can make is to take advantage of their direct link with customers and educate users on the best mobile recycling practices. He says: ‘In the UK the network operators have a captive audience and it’s very easy to get the message across to consumers.
‘They can do this by sending texts and recycling incentives to their customers. In the UK it is quite advanced but we’re still only recycling around 35% of mobile phones that are sold – we’ve got a long way to go and it’s partly due to awareness. I think it’s about getting the message across – the sub-30-year-old generation recycle regularly.
‘I think it’s a generational thing and the youngsters are aware that things have value. They also want to change their phones more regularly and this is a way of using that value to upgrade to a better phone. The mobile network operators have an excellent route to consumers and it’s all about communication.’