When the Apple Watch was rolled out in April 2015, it seemed almost everyone had to own one.
It quickly became, at the time, the best-selling wearable device and earned rave reviews for its appeal as a fashion accessory.
More than a year later, sales have slipped but demand remains steady, drumming up anticipation that Apple will unveil a new version of the watch.
Soon, the original Apple Watch will be the “old” version and consumers will look to upgrade and get value for the first model.
Ready for a Smartwatch Trade-in Market?
It’s difficult to predict exactly how this market will evolve, but the day is coming soon. If the demand for new smartwatches follows the same trajectory as smartphone sales, then the trade-in market for smartwatches should have great potential.
The thirst for the latest tech product happens all the time with smartphones— it’s why retailers and secondary markets have fared well for several years now as consumers trade-in their used devices for new ones.
Granted, because the Apple Watch is branded as a fashion accessory, consumers might hold onto theirs longer than they do their smartphones. Cost will be a factor in that decision: The mid-to-high end cost of Apple Watch runs from $549 to $1,049.
It’s also not yet known how much Apple will improve the product with a second and even third version, and how these changes will affect a consumer’s desire to upgrade.
3 Tips to Prepare for the Smartwatch Resale Opportunity
- Look at the Broader Picture - Retailers and secondary markets should get ready to buy not just pre-owned Apple Watches, but also smartwatches from all manufacturers, to breoaden the market. While Apple Watch gets all the headlines, LG, Motorola, Tag Heuer, Fossil, Samsung, Pebble and Sony also sell smartwatches and will continue to update their offerings.
- Experiment with Mobile Buy Back and Trade-In Programs - Retailers and secondary markets can implement a smartwatch trade-in program and/or buy back program by following the guidelines of thier smartphone program. While the product is different, the trade-in model may not necessarily require much adjustment, initially.
More importantly, a smartwatch trade-in program is looking for the same thing as a used smartphone program: Flawless condition —if the device works and looks new, it can be sold to another customer.
- Combine Smartwatch and Smartphone Trade-in Programs - Industry has already started experimenting with various smartwatch/smartphone bundled offerings.
For example, Best Buy recently announced a great discount on the Apple Watch with a purchase of an iPhone. This is just the beginning of creative offerings extending the future of trade in and buy back solutions.
6 Factors to Assess the Condition of a Smartwatch
- What Model is the Device?
This is easy to verify, but in more than 20% of smartphone trade-in transactions, the device model is incorrectly categorized.
- Do the LCD Screen and Watch Crown Work?
Ensure the screen functions correctly. Press it a few times and make sure everything works. Similarly, be sure the watch crown is functional.
- Are there Scratches?
Because smartphones are fashion accessories, scratches could possibly diminish the aesthetic and monetary value far greater than they would on a smartphone.
Phones are (almost) expected to be dinged and dropped because it’s hand-held, as opposed to a watch being strapped on a wrist. Resellers will have the opportunity to collectively determine the value of scratched watches.
- Is the Band Damaged?
Some smartwatches, particularly Apple’s, are expensive because of their duality as fashion accessories. How drastically should the value of a stainless steel cased Apple Watch decrease because of a tear in the sport band? It will take time, but prices of damaged accessories need to be hashed out.
- Does the Device Turn On?
It’s an objective and extremely simple question to answer. Missing this question results in the largest average trade-in price adjustment for smartphones and will undoubtedly cause similar problems if it’s overlooked on a smartwatch.
- Is the Battery in the Watch?
Another quick test which some employees do forget to check. Without a battery, the value of the device might be significantly different.
Why Consider a Smartwatch Trade-in Program?
By accurately assessing the value of old smartwatches, retailers can put more money into their customers’ pockets and their store coffers with efficiently run trade-in programs.
Customers who trade-in their old mobile phones spend 30% more on accessories than those who do not trade-in. Undoubtedly, this same phenomenon could happen with the trade-in of smartwatches. Customers often view trade-in offers and credits as free money, so they are happy to spend it on new cases or other merchandise in-store.
Another reason to consider starting a smartwatch Trade-in program is the lowering of customer acquisition costs. By accepting used smartwatches alongside smartphones, retailers can cut acquisition costs by between 30% and 60%.
You’ll also entice customers to return —If consumers buy a smartwatch and smartphone from you, they’ll now have twice the reason to come back when they seek to trade-in those two items for newer models.
Sales reps will need some time to adapt to the smart watch trade-in process, but if they’re already assessing the condition of smartphones, it shouldn’t take long to quickly put a price on a smartwatch.
So while the tech world and consumers wait for Apple to potentially unveil a new smartwatch, retailers and resellers would do themselves good if they started planning to implement a smartwatch trade-in program before a new model is released. The clock is ticking before a terrific resale opportunity presents itself.
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