Guest Blog By Jeff Trachsel
With the prevalence of online shopping and increase in showrooming, one of the biggest challenges facing today’s brick-and-mortar retailers is how to drive in-store traffic and sales. With so many online and in-store options, sensible consumers have an abundance of options when it comes to purchasing the newest consumer electronics.
Five years ago, the average consumer knew little about trading in used electronics for cash or store gift cards. Today, awareness of trade-in is much higher and continuing to grow. Because of this opportunity, many big box and niche retailers are already leveraging in-store electronics trade-in programs. In fact, according to NPD Group, smartphone trade-in is “one of the most dynamic, leading tools that carriers and retailers use to drive new device sales.”
Providing valued customers with the convenience to sell used smartphones, tablets, laptops and video games for store value can result in a huge return for retailers – not only providing increased store traffic, but also an upsurge in customer loyalty and in-store spending.
Exchanging used consumer electronics for store credit is an effective way to boost in-store spending and increase margins. Device trade-in accelerates the consumer upgrade cycle by instantly allowing consumers to purchase devices more frequently and for less, thereby 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 the average purchase price, depending on the initial card value. And when consumers get paid for their unused items, spending tends to be directed toward higher margin “wants” versus “needs.”
Bolstered customer loyalty
According to the NPD Group’s Connected Intelligence report and its survey of smartphone consumers, nearly 62 percent of respondents are willing to switch retailers for a better trade-in offer. The following graphic depicts the data and customer willingness to switch, both for retailers and carriers.
Due to the widespread popularity of using smartphone trade-ins to fund upgrades, consumers are searching for the best deal they can get with the most convenient experience. Offering trade-in not only provides customers with a personalized, one-to-one exchange with a sales associate, but also gives customers the positive feeling of being paid back by their favored retailer.
Incremental in-store traffic
With the growing 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, when consumer awareness and interest is especially high. In addition, 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 enhances in-store promotions and motivates shopping behavior.
In a time when the retail experience must innovate to remain relevant, in-store consumer electronics trade-in programs offer the boost retailers need. As 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.
Jeff Trachsel is CMO at NextWorth Solutions, Inc.