Driving in-store traffic and sales in a hyper-competitive world is one of the biggest challenges facing brick-and-mortar retailers today. The prevalence of online shopping and showrooming has especially effected retailers who sell consumer electronics. With so many choices, both online and in-store, savvy consumers have plenty of choice when shopping around to purchase the latest consumer electronics.
One strategy savvy retailers and carriers are employing is offering an in-store electronics trade-in program. Five years ago, most consumers didn’t even think of trading in used electronics for cash or gift cards, but today the awareness for this option is quite high and continuing to rise. According to the NPD Group, smartphone trade-in is “one of the most dynamic, leading tools that carriers and retailers use to drive new device sales.”
Allowing customers to sell used smartphones, tablets, laptops and gaming devices for store currency can have a huge return for retailers – not just with increased store traffic, but also with increased in-store spending and enhanced customer loyalty.
Incremental in-store traffic
With increased awareness of trade-in, consumers are now on the lookout for the right combination of convenience and value. With special trade-in offers and promotions retailers can cut through the clutter and attract both loyal and new customers to brick-and-mortar locations. This is especially true around new device launches, such as the latest Samsung phone or Apple iPad, when consumer awareness and interest is especially high. Additionally, online channels can successfully drive foot traffic into brick-and-mortar stores, effectively reversing the showrooming trend. Highlighting retail-only trade-in offers and promotions through online channels such as social media and email marketing enhance in-store promotions and drive shopping behavior.
Exchanging used consumer electronics for store credit is an effective way to boost store spending and increase margins. Device trade-in accelerates the consumer upgrade cycle by instantly enabling consumers to purchase devices more frequently and for less, therefore driving more new device sales. Retailers also benefit from the gift card multiple; consumers buying with a gift card can spend up to five times average purchase price, depending on initial card value. And when consumers get paid for their unused items, spending tends to be directed towards higher margin “wants” versus “needs.”
According to the NPD Group’s Connected Intelligence report and its survey of smartphone consumers, nearly 62 percent of respondents said they are willing to switch retailers for a better trade-in offer. The below graphic depicts the data and customer willingness to switch, both for retailers and carriers.
Because of the widespread popularity of using smartphone trade-ins to fund upgrades, consumers are searching for the best deal and most convenient experience. Offering trade-in not only offers a personalized, one-to-one exchange with a sales associate, but also gives customers the positive feeling of being paid back from their favored retailer.
In a time when the retail experience must innovate to remain relevant, in-store consumer electronics trade-in programs can offer the boost retailers need. A personalized experience that immediately pays the customer back for used products, trade-in can serve as a critical tool to drive foot traffic, increase sales and enhance customer loyalty.
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