Exploring Walmart's Re-Commerce Strategy for Used Electronics
Walmart has been active in re-commerce for used electronics, offering trade-in options for customers both online and in-store. This strategy helps lower the effective price of new technology for customers, meets the evolving demands of technology updates, and taps into the growing re-commerce market, particularly in the cell phone category.
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Presentation Transcript
September, 2013 Used electronics Re-commerce for used cell phones
Overview of re-commerce Trade-in at Walmart Walmart has been active for two years on used electronics On-line trade-in at Walmart.com has been in place since 2011 http://walmart.cexchange.com/ Customers can access Samsung s Recycling Direct program from Walmart s corporate web page http://corporate.walmart.com/global-responsibility/environment-sustainability/electronics- recycling Walmart.com sells a meaningful assortment of high quality branded refurbished electronics products Customers asked for it 1 in 5 consumers already trade-in or recycle their devices 30-40% of mobile shoppers take advantage of trade-in when it is offered Over 60% of customers will decide where to buy their next cell phone based on trade-in capability Trade-in can help Walmart enhance EDLP Industry and competition Major retailers and mobile carriers already offer in-store trade-in A secondary market for the resale of used phones already exists 2 Trade-in Wal-Mart Stores, Inc.
Customers Why re-commerce is relevant for Walmart Motivating factor Implication Customers used devices can lower the effective price of new technology Enhances ELDP by lowering the effective price a customer pays Technology is updating at an increasing rate and users want the latest devices Customers are looking for ways to monetize their device(s) These types of programs are increasingly common place for younger shoppers who are more connected Enables Walmart to provide a service that customers increasingly expect to get in-store Cell phones already command a dominate share of the re-commerce market Re-commerce is growing at a faster rate in newer categories (i.e. tablets) Cell phones are an established category to start with in-store trade-in Leverage .com and mobile to drive traffic to bricks-and-mortar Customers engage on-line but taking action in store 3 Trade-in Wal-Mart Stores, Inc.
Industry The re-commerce market is projected to grow by 32% through 2015 343 Idle devices in the US 274 +32% Millions of devices ~21% of mobile phone consumers traded in a device in 2012 234 198 186 144 141 110 84 104 81 109 60 88 57 41 29 24 2013 2014 2015 2010 2011 2012 Opportunity for Trade-In / Recycling Already in Trade-In / Recycled Source: Compass Intelligence 4 Trade-in Wal-Mart Stores, Inc.
Competition Walmart s major competitors offer trade-in options to customers Walmart Competition In-Store Online In-Store Online Format In-store Online - Consumer In-store Online - Consumer Who grades the devices? Walmart e-gift card which can be used on-line or in-store Form of payment to consumers Gift card or store credit In-store - Instant Online Instant for customers who use Instant Gratification; otherwise after the device is received by our third party partner In-store - Instant Online Within a set waiting period usually between 14 and 30 days of mail-in acceptance Timing of payment In-store - Smart phones (with value) Online - 15 categories on-line (with/without value) Varies, most common include: Items with value Items by that carrier (i.e. AT&T) Recycling (limited) Devices eligible for trade-in Walmart has invested meaningful capital into training, technology, and infrastructure to support this program in the most responsible way while providing the maximum value to our customers and driving results 5 Trade-in Wal-Mart Stores, Inc.
Putting money in our customers hands through trade-in In the form of a Walmart currency Walmart associate verifies device condition + model Device turns on Yes/No Screen is intact Yes/No 2 1 Customer initiates transaction in-store at Connection Center kiosk with store associate 5 Walmart associate prepares device(s) for shipment via FedEx Walmart associate loads an e-gift card and prints receipt (8.5 x11 paper) 3 Devices are picked up and sent to Cexchange via third party carrier Walmart associate places device(s) into lockbox behind counter 4 6 Trade-in Wal-Mart Stores, Inc.
