Specific dates in the calendar are imperative for the sale of new devices. Christmas has been a staple for years now and Black Friday has become another opportunity to encourage consumers to upgrade to the latest and greatest smartphone.
According to Adobe, $7.4 billion was spent last year on Black Friday alone, and we are seeing retailers, operators, and OEMs getting in on the action. In the past, some carriers have run a buy-one-get-one-free phone bundle on the newer releases, and this year we can expect to see slashed prices on older iPhone and Android models—especially given the recent launch of the new iPhone 12 and Samsung’s 5G devices. In fact, we’re even seeing some online retailers offering gift cards when you purchase a handset through them.
However, with the upgrade cycle lengthening, operators, retailers, and OEMs should take advantage of issuing promotions and offers to keep momentum going and encourage new device sales, year-round—not just on Black Friday.
Price dictates the upgrade cycle
Data from our Q3 2020 trade-in trends report demonstrated that the average age of a smartphone at trade-in was 3.21 years. With upgrade cycles now over the three-year mark, consumers are much more likely to hold onto their devices until they can guarantee a saving on their new handset—a mindset that is sure to have been enhanced by the fluctuating economy this year, which has made people reluctant to pay more on already high-priced items.
Black Friday is notorious for its offers, especially on electronics. Google results through October and November show, “should I wait to buy a smartphone on Black Friday?” and customers are inclined to wait for this day before they think about upgrading to the latest smartphone.
But if consumers could get a deal on a new device that rivals the Black Friday saving at other points in the year, it would encourage the trade-in of old devices and boost the upgrade cycle. Doing so would create a far more sustainable and constant cycle, and would prevent the influx of devices following Black Friday as consumers clamor to trade-in.
There’s a gap in the market here for operators, retailers, and OEMs. Consumers are clearly keen to upgrade but decide to wait for a sure-fire bargain. Highlighting promotions that run year-round would not only grab the attention of these customers but also reduce churn rate and drive revenue.
Upgrades are not just for Christmas
As we gear up for Black Friday and the holiday season in general, customers will be on the hunt for the best deals and will be enticed by promotions and offers on new devices. As we hope to see a recovery from a year that has taken an economic hit due to the pandemic, encouraging new device sales and trade-ins will be key for operators, retailers, and OEMS during this period, to help recoup lost revenue and support the secondary device market.
Operators, retailers, and OEMs have the responsibility to incentivize consumers to upgrade and trade-in. Having offers on trade-in programs all year round would encourage consumers to upgrade their devices throughout the year and not hang on to them as they search for a better deal. Operators, retailers, and OEMs need to ensure they’re promoting these offers so that consumers are aware of what’s available and when they can get it. Many consumers still don’t know that they can get a good price for their seemingly worthless devices—and this money can contribute to a significant reduction in the price of a new smartphone.
Right now we are seeing some of the best promotions that we have ever seen, but year-round promotions will change the mindset that the holiday season is the only time to upgrade and will ensure smartphones consistently enter the secondary device market. This not only benefits consumers by giving them more opportunity to buy a new device (and giving them money for their old devices), but operators, retailers, and OEMs can drive additional revenue throughout the year.