B-Stock: ‘Retailers need to think seriously about the return value in consumer electronics’

Returns and overstock specialists B-Stock is urging retailers to “get ahead of the returns game” as the annual flurry of video games released for Autumn and Christmas takes place.

Ben Whitaker, director EMEA at B-Stock, suggests that looking into the value of such products could well be a way to invigorate both online and physical retailer stores.

“A stark fact revealed recently by the Retail Gazette suggests returned goods are costing retailers in the UK $77.8 billion (£60 billion) per year,” said Whitaker.

“In Europe, the story is much the same, compared to just an 8% rate of returns for goods to high street stores, eCommerce platforms can expect a concerning 25-40%.”

Titles with huge sales year-on-year such as the FIFA games on multiple platforms still sell in relatively large amounts in physical copies and returns on this and other titles remain relatively high.

A total of 23.7 million physical video games were sold in the UK during 2017, the latest data from GfK reveals, meaning the potential for recouping that return rate remains high, said Whitaker, adding: “As returns increase, so too does the industry’s need to adapt, protect itself and strategise to overcome this challenge. Margin compression at the front end of retail and eCommerce also means fighting for a finite number of customers and both platforms seeking other ways to innovate. Returns could well be the answer to that gap.”

With more than 20% of consumer electronics purchases returned on a regular basis, Whitaker says retailers must look at this “sooner, rather than later”. Video games and consoles in particular are in high demand, almost as much as high value Apple products.

“What is key to remember here is the fact that the lifespan of some of these products are short initially, but there is added value in the reselling market.

“Video games such as the FIFA series as well as potential game of the year titles such as the recently-released PS4 exclusive Spiderman game generate high pricing both in-store and online, but also offer excellent rates of return to sell on,” he explained.

“Seasonal, one-off releases like FIFA and other sport franchises are often released in new forms each year but will hold their value for around 6 months. Other popular titles can remain high-value in used condition for many years after.”

But it isn’t just video games that have this kind of potential, B-Stock suggests that the associated technology also offers lucrative reselling opportunities, with accessories such as earbuds, cases and batteries boasting some of the highest return rates and therefore making up a large percentage of products in the overstock and liquidated market.

“Retailers need to know that trade buyers who purchase this kind of stock want large quantities of inventory sorted by condition. That means that even if returns aren’t in the most perfect condition, there is still a vast number of buyers out there who demand this kind of product,” said Whitaker.

“We see this kind of demand even more when it comes to mobile phones, the iPhone X, despite being released almost a year ago, is still reaching more than 60% of its value in resales. That kind of value simply cannot be ignored.”

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