Consumer Electronics and Reverse Logistics: Play It Again
Shoppers return between 11 and 20 percent of consumer electronics devices, according to industry experts. While returns are the beginning to device recovery, all the steps in the reverse logistics process, including repair/refurbishment and remarketing, can be improved.
Recognizing the importance of reverse logistics in maintaining and growing profit margins, many consumer electronics manufacturers and retailers are taking steps to improve returns management. Organizations that mitigate and efficiently manage the total number of returns; streamline repair and refurbishment processes; and master recaptured device remarketing and recycling can positively impact their bottom line.
Research suggests that 68 percent of return volume comprises devices that fail to meet customer expectations. To mitigate buyer remorse returns:
- Look for opportunities to share the responsibilities for preventing returns.
- Support the product before and after sales with effective, attractive alternatives to returns.
- Provide proactive post-sale support for complex devices.
Repair and refurbishment services are essential to recouping what would otherwise be lost value for many returns. Through these services, products are restored to marketable, near-new condition. High-functioning and efficient device recovery solutions include two critical capabilities:
- Parts management, which relies on the ability to strategically procure replacement parts from the lowest-cost source, such as reclamation yield, new manufacturer parts, and aftermarket parts.
- Reconfiguring a repaired or refurbished device, which often requires programming its software, physically branding the unit, assembling it with components, and repackaging it.
Aligning with a partner who already has the capabilities, manufacturer-issued certifications, and infrastructure to repair and refurbish your product in-house will alleviate some logistics complexity.
Once a consumer electronics device is restored to a marketable state, the manufacturer or retailer can add it back into inventory and deploy it into the market to generate additional service revenue. In some instances, however, a device can generate more value if it’s introduced into a market outside the United States.
Think Globally, Compete Locally
Companies that think globally can leverage foreign markets to realize the most value on recovered end-of-life devices. If your company chooses to remarket its products globally, it is important to ensure your reverse logistics partner maintains a substantial global network of buyers you can leverage to recoup value on devices that lack sticking power in the U.S. market.
Carriers and retailers often make the mistake of assuming devices that are economically irreparable have no value. When a device is identified as irreparable, you can still take steps to salvage remaining value. Reclaiming recyclable parts and precious metals helps improve your bottom line, while also preventing adverse environmental effects that stem from electronic device waste.
To maximize competitiveness, consumer electronics manufacturers and retailers must strategically approach reverse logistics. Mitigating returns at the outset, and recovering the maximum value of returned assets, allows companies to operate more profitably.