Bricks-and-mortar stores are best for selling refurbished goods

A remanufactured product refers to a used product that has been restored with new or refurbished parts by the original manufacturer, or a third party, to a ‘like new’ condition. It’s then made available for sale again, often with a warranty that aligns with its new counterpart. Refurbished smartphones and laptops are particularly popular in many markets.

For all this recent growth, the refurbished consumer products market is still considered to be in its infancy. But that may change soon, with some of the world’s biggest brands staking a claim to this market.

Or maybe it won’t. Meg Meloy, Professor of Marketing at Pennsylvania State University in the US, and David H. McKinley, Professor of Business Administration at the same institution, co-authored a recent study that explored consumer behaviour around remanufactured products. 

Many websites where refurbished products are sold include a brief description to educate prospective buyers about the remanufacturing process. However, educating consumers about this process isn’t likely to entice most consumers to buy anything, Meloy explained.

“It’s possible that when you mention the product is taken apart, cleaned, and all the parts are checked, it highlights the used nature of the product; the fact that it’s been handled by others and used by others, which may diminish its appeal,” Meloy said.

The study involved college students as well as everyday consumers. All participants were asked to assess a refurbished electric toothbrush and bluetooth headset. Products that go into the body, such as toothbrushes and earpieces, are known to elicit high levels of disgust, according to Meloy. 

Study participants given different tasks

Prior to evaluating the products, however, half of the participants were given a set of standards for the remanufacturing process. One-third of the study participants were shown text descriptions of the products; another third were shown a photo and text description of each product, as usually found on a typical retail website. 

The remaining third were given the products sealed in their packages. In other words, the last group could examine the packaging, but not the products inside.

Participants who were asked to read about the refurbishing process beforehand were no more inclined to buy the toothbrush or headset than the participants who weren’t. In fact, the only thing that moved the needle in that regard was exposing the participants to the physical products.

A concept in psychology called ‘mere exposure’ holds that the more familiar you are with a person, object or issue, the more likely you are to like and trust the entity. Meloy believes that explains what happened with those who were able to see and hold the toothbrush and headset – or their packages.

As a result, the study authors recommend moving the refurbished market mostly offline, to showrooms and outlet stores, where products can be held, inspected and even tested. This would be a dramatic shift away from the way most refurbished retail is done today.

“Most manufacturers do not want the remanufactured version of their product to be sitting next to their new product because they believe it will cannibalise their new product,” Meloy explained. 

“So, they push away from that and say, ‘No. We’re going to sell them online at deep discounts.’ And what we’re saying is: you may not even have to discount it that much if you sell your remanufactured consumer products through your brick-and-mortar outlet stores.”

If lost profits don’t motivate manufacturers and retailers to alter their approach, Meloy believes consumers themselves may demand it, as our lifestyles incorporate more reuse in an effort to reduce waste. 

She also speculated that, to increase familiarity with remanufactured products and take advantage of mere exposure, providing schools with refurbished consumer products, such as tablets and laptops, may reduce psychological barriers.