James Rigg, CEO of Trojan Electronics, examines why, despite consumers becoming increasingly eco-conscious, the scale of the e-waste problem continues to increase.
In recent years, the fashion industry’s impact on the environment has become a hot topic for businesses and consumers alike, with most people understanding the phrase “fast fashion”.
Comparatively, a third of consumers don’t know what “e-waste” means. Short for electronic waste, e-waste refers to discarded electronic devices, such as smartphones, laptops, TVs, and appliances, that are no longer in use.
While eBay and the reality TV show Love Island have partnered up to encourage the public to prioritise pre-owned items over brand-new and cheaper alternatives, these behavioural changes haven’t managed to reach the fast consumer electronics industry just yet.
A move towards a circular economy with less waste also provides a great opportunity for businesses to benefit financially.
With constant innovation ingrained into the tech industry, an ever-increasing pile of e-waste has followed. In 2022, the UK produced the second most e-waste in the world, and only 17% of e-waste is recycled globally.
This isn’t the same as throwing away a plastic bottle. Electronics are expensive to manufacture and can generate significant profits. A move towards a circular economy with less waste also provides a great opportunity for businesses to benefit financially.
Financial Advantages
When devices pass their peak performance or no longer fit the user’s needs, do they become obsolete? Not necessarily. Refurbishing and reselling is a sustainable and certified option that businesses of any size can take advantage of. By re-selling products at a slightly lower price, retailers and manufacturers can optimise revenue opportunities and gain some profit from all items.
Additional business growth and reduced profit loss from customer returns. It’s a win-win situation for all involved.
Moreover, this strategy can introduce a new customer base, unlocking an additional revenue stream. By providing lower-cost items through refurbishment, customers who couldn’t afford to purchase them at their initial prices now have access. This can increase a retailer’s market share, by attracting cost-conscious customers, perhaps for the first time.
Misunderstandings
The knowledge that recycling is more sustainable and financially beneficial isn’t exactly ground breaking, given changing societal attitudes. So why are e-waste statistics at such an alarming level?
Despite consumers becoming increasingly environmentally conscious, a common misconception persists that refurbished items are of lower quality. Many products are only returned due to minor technical faults or cosmetic damage, yet there is a hesitancy among retailers and manufacturers to resell refurbished items.
Fortunately, this belief is misguided. Electronic items are repaired and thoroughly tested to ensure they meet the same quality as new ones before being sold as refurbished products. Some refurbished products may even be superior, as they undergo a more rigorous inspection to ensure their reliability.
Existing supply chains make it difficult to recycle electronics circularly.
Despite this, recycling electronics is not as simple as plastic. Existing supply chains make it difficult to recycle electronics circularly, as they’re set up to move materials through manufacturing and distribution.
Integrating recycled content into electronics production is a challenge for individual businesses, requiring supply chains to be reconfigured for repair, reuse, recycling and manufacturing.
Thankfully, professional return management companies can help businesses take full advantage of the benefits of refurbishing and recycling tech products. These companies offer expertise, support and guidance to make the process as seamless as possible.
They can effectively refurbish electronic items and resell them on external marketplaces or the retailer’s own, providing complete control and bespoke service.
Changing Consumer Attitudes
Recent research has shown that consumer opinions about refurbished items are improving, despite the existing misconceptions. According to YouGov, over two-thirds of consumers worldwide have purchased a refurbished or recycled electronic item in the past.
The UK and US lead the way, with four in ten consumers opting for repurposed electronics. These shifts in consumer attitudes have opened a new market for refurbished products – financial savings were cited as the primary reason for over half of buyers (56%) on eBay.
The younger Generation Z demographic is even more open to the idea of refurbished technology, with this figure at 64%. As younger people become increasingly receptive to the concept of circularity, this trend is set to continue. Companies that invest in circularity can benefit from this significant financial opportunity.
The Environmental Impact
The more obvious upside to reselling refurbished electronics is its environmental benefits. Despite this rather undisputed argument and societal drive towards sustainability, the world has become less circular in recent years, as emphasised by the annual Circularity Gap Report.
We need to maximise circularity to protect resources and work towards decarbonisation. Refurbishing tech products is a clear way to achieve this, as electronic devices contain materials such as plastics and metals that take hundreds of years to degrade if simply discarded in landfills.
Reusing these materials through resale reduces the strain on natural resources caused by excessive manufacturing and can combat the complexity of electronic waste. Despite representing only 2% of solid waste streams, electronic waste represents 70% of hazardous waste in landfills.
We need to maximise circularity to protect resources and work towards decarbonisation.
The impact of returns of electronic products on the environment is staggering – 160,000 laptops are disposed of every day in the EU, and up to 18 million metric tonnes of carbon dioxide emissions are released into the atmosphere each year from the disposal of electronic devices.
Instead, by refurbishing these items, the emissions produced can be reduced by up to 50%, easing the strain on the environment caused by their disposal. While focusing on the bigger picture may seem separate from the concerns of individual businesses, half of CEOs now believe that climate risks will impact their firm’s finances within a year.
Improving Stakeholder Satisfaction
The retail industry has recognised that being environmentally conscious not only benefits the environment but also their bottom line. With consumers demanding more environmentally friendly options and products, sustainability has become a major concern for the industry.
When deciding where to spend their money, consumers are increasingly looking for companies that prioritise environmental responsibility.
31% of consumers currently rank sustainability as the most important factor when purchasing electronic products, with design, brand name, and having the latest model trailing behind. As a result, committing to circular processes can lead to increased customer satisfaction, which in turn can lead to growing sales.
For investors, companies must operate sustainably to maintain shareholder value and comply with regulations. To attract additional investment, businesses must be transparent about their environmental, social and governance (ESG) initiatives.
Committing to circular processes can lead to increased customer satisfaction, which in turn can lead to growing sales.
In fact, according to a study by Deloitte, a higher ESG score can lead to a 1.2x increase in EV/ABITDA, making it a worthwhile endeavour for companies to prioritise sustainability.
Overall, reselling and refurbishing consumer electronics is a great way for businesses to make a positive impact on the environment while also maximising profits. This approach not only reduces their environmental footprint but can also generate additional revenue and increase stakeholder satisfaction.
For businesses wary of disrupting their processes, collaborating with supply chain partners and customers can enhance their ability to capture and reuse greater quantities of new materials from end-of-life electronics.
