Greener with Tech: Sourcing Mobile Device Intelligence to More Accurately Manage Second-Hand Inventory and Logistics

The green leaf or recycling icons have become all too familiar symbols of social responsibility consumers on supermarket shelves and the wider public space, as companies fortify their brand image. As companies whose core products contribute to a high percentage of e-waste, many mobile operators are looking to or committing to becoming more environmentally-conscious. GSMA partnered in 2023 with several mobile operators on bringing “high value for society,” which included greener procurement programs and affordability.

In embracing those two ESG principles, mobile operators can explore a new business and branding opportunity. By embracing certain types of digital technologies, they can cater to an increasingly environmentally-conscious public, help reduce e-waste and carbon footprint and take advantage of a growing cost-savvy consumer base.

The e-waste image with the consumer

In late 2022, researchers at UCI discovered that greenhouse gas emissions from e-waste have increased by 53 percent from 2014 to 2022, with mobile devices contributing a sizable portion. Refurbishing new devices instead of manufacturing them can significantly impact emissions.

In stark contrast, refurbishment of mobile devices produces far less CO2. A report by Refurbed compared the carbon footprint of producing a new iPhone 11 vs. refurbishment. A new iPhone 11 device created 72 kg of CO2, while refurbishing one created a mere 2.8 kg of CO2.

Many mobile operators see both the brand appeal and environmental value in transforming their operations into being more environmentally-friendly, as consumers demand green. In fact, 78 percent of U.S. consumers, for example, indicated that living a sustainable lifestyle is important and influences how they buy.

Large tier-1 mobile operators have already undertaken initiatives to recycle and reduce e-waste, such as AT&T, which reported refurbishing 229 million devices and Orange, which reported that it collected mobile phones equivalent to 15.1 percent of its sales volumes back in 2020.

The rising demand for second-hand

IDC projects worldwide used smartphone revenues in North America will increase from $26 billion in 2023 to $44 billion by 2027. Moreover, global revenues for the used and refurbished smartphone market are expected to increase from $64.7 billion in 2023 to $109.67 billion in 2027.

Driven by rising costs for a new mobile device, data in North American and European consumer base shows increasing willingness to buy used. As of early 2024, already a third of U.S. consumers indicated they would be interested in purchasing a refurbished second-hand mobile device. Across the pond, there is an even greater willingness. Vodafone indicated 52 percent of consumers would be willing to purchase a refurbished smartphone down the road. And in the UK specifically, a quarter of consumers who bought a new mobile device purchased one that was second-hand or refurbished, up from 19 percent the year before.

Some operators have already seen success running circular economy ecosystems. A GSMA report highlighted how Orange managed to introduce a circular economic model that “achieved €130 million in avoided or saved capital costs over a two-year period.”

The potential is there, but managing inventory in the reverse and forward logistics operations in an efficient and precise manner is a challenge.

Logistics challenge: getting device intelligence to increase transparency on the device’s value

Mobile operators have two options for building a circular economic model and sell refurbished devices to customers:

1. Develop an internal system to manage the entire reverse and forward logistics program end-to-end.
2. Outsource the entire mechanism to an external 3rd-party or 4th-party provider to manage the reverse and forward logistics processes.

In both scenarios, mobile operators require device intelligence (diagnostic data, configuration info, etc.) to understand, in detail, what they are getting with each inbound used device – whether it be from a warranty exchange, buyer’s remorse, trade-in or leasing.

• The in-house option: This is more operationally costly to develop but allows the mobile operator near total control over the logistics process. However, it poses a risk of losing the ability to track device lifecycle history for future reference, which can come in handy down the road when a mobile operator wants to better manage customer journeys.?Moreover, operators risk facing inefficient repetition and discrepancies or variance in grading between the frontline representatives and the warehouse in reverse logistics.
• The outsourced option: This option is less costly to manage operationally, but takes away control of pricing. Because mobile operators do have device intelligence to accurately evaluate a device, they are blind to its real market value. This is because they are leaving the ability to accurately grade a device or “device intelligence acquisition” to the device trader, putting them at financial risk.

In both scenarios, the problems are underpinned in the ability to comprehensively diagnose and assess a device and gather device intelligence at the frontline. Frontline representatives typically use manual, subjective and minimally-digitized processes. This prevents the organization from creating a standardized, consistent and transparent grading process, which would give them the data and insights they need to effectively manage second-hand device logistics.

Frontline representatives in retail or support require digital tools to gather device intelligence (i.e. deep diagnostics and configuration information). Doing so would standardize the grading process and enable consistency, transparency and efficiency across logistics points – regardless of whether refurbishment is outsourced or in-house.

Empowering frontline reps to quickly and comprehensively assess devices

So what does device intelligence acquisition mean in practice in this application? Digital tools to diagnose a device and grade it in a standardized way can have a powerful impact on a mobile operator’s second-hand device logistics operation. These can include device diagnostics tools and tools capable of extracting complex configuration info. Ultimately, they can allow a mobile operator to see improvements at the micro and macro level in second-hand inventory building:

• Enhanced Grading Accuracy: By using advanced diagnostic tools at the point of intake, operators can accurately assess device conditions, reducing discrepancies and ensuring fair pricing downstream.
• Improved CX Down the Road: Enable the capacity to build a digital ledger of a device’s history and better understand a customers’ device care needs at different points of the lifecycle, ultimately improving CX.
• Operational Efficiency: Streamlining the evaluation process reduces time spent on manual assessments, allowing staff to focus on customer service and other value-added activities, and reduces unnecessary, repeated evaluations in in-house cases.
• Financial Savings: Accurate assessments minimize losses from undervalued resale prices or overvalued device intakes, directly improving profit margins.

Your solution for managing the second-hand grading process at scale

MCE’s dDLM platform and deep diagnostic tools deliver on this capability – to convert device intelligence into a key cog in a second-hand mobile device lifecycle management system, across the enterprise. It allows mobile operators’ frontline representatives to acquire the device intelligence they need at the right time to make smart decisions upstream, reducing financial risk and increasing transparency.