Consumer appetite for circular business models such as take back schemes is growing, presenting the electricals industry with the opportunity to use resources more sustainably and realise £4.4billion, prevent one million tonnes of waste and save 14 million tonnes in CO2 emissions, according to new research from WRAP, the sustainability not-for-profit.
WRAP looked at consumer attitudes to the way people buy, consume and discard their electrical products as part of its new report, Switched on to Value: Powering Business Change, published today. It highlights consumer behaviour as a major determinant in the lifecycle impacts of electrical and electronic products and the key findings include:
- Half of consumers are willing to buy used products from a reputable retailer
- Addressing concerns over personal data could encourage more consumers, who currently hoard electrical items*, to dispose of them
- 83% of households are interested in retailer take-back schemes
Demand for electrical items is on the rise, with two million tonnes of electrical and electronic equipment (EEE) placed on the UK market each year**.European manufacturing firms spend around 40% of their total costs on raw materials, but the rate at which we consume these raw materials is unsustainable.
Unless business models change, increasing population and growing resource scarcity and price volatility will have a substantial impact on business profitability and resilience.
Through its electrical and electronic sustainability action plan (esap), WRAP is working closely with the sector to generate value through sustainability. It was through esap that Argos introduced its Gadget trade in service, and WRAP was able to demonstrate to Amazon that the market for refurbished products existed, informing the thinking behind its certified refurbished scheme.
Steve Creed, Director at WRAP, explained: “esap provides a unique space for collaboration, innovation and action across the industry. Over the last three years it’s enabled us to work with the electricals sector to pioneer innovative business practices that promote a more circular economy. In doing so we have helped global brands and retailers create new value, generate new income streams, improve profitability and increase re-use of products. Our new report presents a snapshot of the evidence base we’ve built up and clearly demonstrates the case for business change – change that will not only generate significant financial returns but also helps realise environmental and customer goals.”
WRAP’s evidence highlights 60% of consumers are hoarding items they no longer use and two-thirds are concerned about personal data on devices, discouraging them from disposing of the items. This presents a significant opportunity for brands and retailers to address these issues though circular business models, as well as generate environmental and business benefits.
For example, take-back, trade-in and service business models can provide customers with the convenience they desire and the reassurance that data will be protected and safely wiped from their devices. Samsung is already demonstrating the benefits of circular business models such as these. Working with WRAP, through esap, Samsung created a new ‘Upgrade’ direct leasing offer to smartphone customers. Samsung can now recover high-value used products and process them through its own world-class service re-use network, using genuine Samsung replacement parts where needed and ensuring data is safely wiped from devices.
Product returns is another area explored in the report where significant savings can be made. WRAP’s work with its esap members has shown that product return rates are between 5-10%. With the UK electricals sector worth around £30 billion, this equates to £1.5 billion to £3 billion worth of products returned each year. WRAP’s consumer research highlights that over half of people return products due to fault, however research with retailers indicate much lower product fault rates. Through esap, brands and retailers can get support to better manage returns, reduce wastage, improve cost recovery and minimise environmental impact.
Switched on to Value: Powering Business Change also looks at implementing circular business models from theory to practice, extending product life through re-use, the emergence of smarter homes and global trends as well as new challenges faced by recyclers. To read more about it, download the report here and for more information about esap 2025 see http://www.wrap.org.uk/sustainable-electricals/esap.