Edition 48
How 7 Key Consumer Electronic Trends will Impact Reverse Logistics
by Paul Rupnow, Director, Reverse Logistics Systems, Andlor Logistics Systems, Inc.

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It is an exciting time in the Consumer Electronics industry. Tablets, smartphones, connected devices, apps, social media to name a few buzz words. But what will be the impact of all this excitement, these trends and these new devices on your Reverse Logistics operations?

Steve Koenig, Director, Industry Analysis at the CEA Consumer Electronics Association gave an excellent presentation entitled “Inside the Minds of the Consumer” at the 2013 Reverse Logistics Association conference in Las Vegas. Steve outlined a number of statistics, perspectives and key trends on the consumer electronics marketplace. This article highlights several key trends presented by Koening and tries to suggest how they may impact your Reverse Logistics operations. Will they increase or decrease returns? Will the help us reduce our costs or capture greater value for our returned assets in the secondary markets?

A Growing Interest in Consumer Electronics

Women are now just as interested in Consumer Electronics as men at an 83% interested or very interested level. Additionally older generations are as interested as the younger generations. The greatest interest level is the 18-24 age group at 95%, but 74% of the 55+ age group are not far behind.

Challenge: Be prepared to Handle Higher Returns Volumes

More interest is resulting in more CE devices. The average household now has 15 discrete CE products, an increase of one product more than last year. This is great news for the industry. However, Reverse Logistics teams need to be prepared to handle more reverse logistics volume since this increase in devices will inevitably result in more returns.

Challenge: Ease of Use Required to Avoid Returns

The increase in interest and demand for CE devices will need to be accompanied with an increase in the ease of use requirement. Better ease of use will help to avoid returns of CE devices. Only 50% of 55+ age group find their CE devices easy or very easy to use. The 18-24 and 25-34 age group who are more technology savvy are still only scoring about 80% in this area. So the 20%+ gap of not easy to use, will drive or result in a large number of returns.

Challenge: Avoiding Returns by Helping the Consumer through Setup

Setting up devices is a big challenge area. Only 71% of the 25-34 age find the CE device setup process to be an easy or very easy task, with the 55+ crowd scoring only 34%. Since setup occurs typically in the first few days after a purchase, these days are critical to provide support and guidance to avoid returns.

When faced with setup or usage issues, 34% of women and 19% of men will ask for help. An additional 46% of men and 37% of women are willing to try to figure it out themselves. Additional emphasis with call, chat or online resources and guidance information, tools or videos may be a very significant opportunity to increase customer satisfaction and reduce returns.


Tablets and Smartphones - the CE Spending Leaders, but Beware of the Short Lifecycle

Tablets and smartphones are the 2 leading CE purchases. Since their launch just over 2 years ago, tablets have become the fastest growth CE device in history with 22% of US households now owning tablets and an expected increase to 38% over next 2 years. Tablets are NOT cannibalizing the PC market. 120 million units are expected to be sold in 2013. Similarly, smartphones expect to sell 130 million units in 2013. Rapid growth in these markets will be accompanied by rapid product development, short life cycles and increased competition. The reverse logistics for these units will need to move rapidly in order to capture value from the secondary markets otherwise the returned inventory will lose value very quickly, as new and competitive products are introduced.

Retail Returns will Continue

On-line shopping is still growing but retail still a very important and relevant channel for Consumer Technology purchases with 70% Retail, 25% online and 5% other. When making purchase decisions, male and female consumers are still very reliant on the retailer to provide product information on the packaging, in store displays and sales people to assist them with purchase decisions. As a result, the retail returns can be expected to continue at similar levels in the near future.

Social Media as a Tool to Reduce Returns

The influence of social networking to influence purchase decisions is growing rapidly. There are 158 million US on-line consumers. These on-line consumers are using social media to help them make purchase decisions: 31% read product reviews, 29% learn about products, 27% clicked on an Ad, 17% post product reviews. From all this on-line research, 81% found their social media references helpful. As a result, we would hope that this easy access to helpful purchase information should result in a more informed decision, less buyer remorse and fewer no trouble found (NTF) product returns.

Assess the Impact on Your Reverse Logistics Operations

The insights, statistics and trends above have provided you with additional knowledge and ammunition to help you to better understand the current Consumer Electronics market and to better fight your battle with the returns at your operation.

Good Luck!
RLM
Paul Rupnow - Director, Reverse Logistics Systems, Andlor Logistics Systems Inc.

Editor - Reverse Logistics Professional Report
Business Insights and Strategies for Managing Product Returns

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