Safe to buy refurbished devices? Why this startup thinks it's better than buying new

Startup Back Market believes it's changing consumers' perceptions of refurbished products.

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The first words consumers read on visiting Back Market's US website are: 'Adopt refurbished products, only by certified professionals'.

By asking consumers to adopt, rather than buy, Back Market is trying to change the language and landscape of the refurbished device market: how hardware is sold, why refurbished devices should be chosen over new ones, and how consumers should feel about their buying decision.

The word adopt means to take by choice, and it immediately reminds consumers that they have one. We associate the word adopt perhaps mostly with children and animals. It usually assumes the adoptee will be taken to a caring home. The language consciously reminds the owner of their responsibilities.

This semantic strategy isn't only targeting US consumers, where the company launched earlier this year -- the French site also urges you to 'Adoptez des produits reconditionnés à neuf par des professionnels certifiés'.

Today the Paris-born company also has online marketplaces in Germany, Italy, Spain and Belgium, and offices in Paris, Bordeaux, and New York.

Back Market was launched in 2014 by the three founders Thibaud Hug de Larauze, Quentin Le Brouster, and Vianney Vaute. Since then, the company has been riding the wave of the growing refurbishment market and consumers' trust in certain brands and products.

According to the 2018 Earned Brand Study from Edelman, 64 percent of consumers around the world buy on belief and choose or boycott accordingly. This mindset spans generations, gender and income levels. The study also reports that consumers believe 53 percent of brands can do more to solve social ills than government.

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While UN data shows that 44.7 million tonnes of e-waste were generated in 2016 -- up eight percent from 2014 -- the refurbished smartphone market also grew by 13 percent in 2017, according to Counterpoint research. That figure compares with three percent growth of new smartphones in the same period.

Back Market's strategy appears to be working as the startup is set to double its sales of $120m in 2017 by the end of 2018.

"It's a kind of a plague that hundreds of millions of devices are sold new every year and we see it's not sustainable anymore," says Vianney Vaute.

"If you look at all the raw materials, like cobalt for example, becoming rarer, we need to invest in a new way of manufacturing, a new way of consuming tech. If we make refurb right, accessible and trustworthy, we can make it mainstream."

Cobalt is an ingredient in lithium-ion batteries. It is extracted by miners, some working by hand and in harsh conditions, with 55 percent of the world's supplies coming from the Democratic Republic of Congo in Central Africa. The US Labor department believes it could be produced by child labor.

Vaute suggests using an "organizing principle" under which "we can begin to rally a community". He puts forward the concept of 'Fair Tech', "broadly defined as the ethics of technology as applied to our hardware, and software as well, to the extent that it intersects with and affects our hardware", to describe "accounting for finite resources".

Other minerals are also vital for smartphone production: bauxite for screen backlighting, sphalerite for screen coating, and rare earth ores such as monazite, bastnaesite, and xenotime, which contain the neodymium smartphone speakers need to play music and sound vibration alarms.

Demanding that companies find ways to minimize the negative effects of sourcing minerals, educating people about the circular economy, keeping electronic products in circulation for longer, recycling more and thinking about product design with recycling in mind are the crucial ingredients for Fair Tech, according to Vaute.

He sees Back Market as an historic opportunity. "So that's the mission," he says. "Changing consumer behaviors and manufacturer behaviors, too."

Having sustainability at its core is partly what attracted Daphni, a venture capital fund, to invest in Back Market along with Groupe Arnault, Eurazeo and Aglaé Ventures in 2018. It brought the total amount invested in the company to $55m, as there had been a $7m investment during the previous year.

"Their DNA is at the centre of our thesis, with its strong impact on sustainability," wrote Willy Braun, co-founder of the Daphni fund, in the Daphni Chronicles. "The product/market-fit was already visible, with a fierce traction and a high growth rate that hasn't slowed down since."

Vaute puts the company's rapid success down to strong client engagement, which has been created through two aspects: simplification and trust.

With the refurbished market traditionally fragmented and viewed as unreliable, Vaute says changing that perception has been the most challenging aspect of the mission.

But by creating a website that is simple to use, which operates the same way as e-commerce sites selling new devices, as well as selling products that consumers trust, but adding six-month warranties, the soaring sales figures show that customers are engaging.

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While Back Market works with more than 300 different suppliers, Vaute explains that the consumer only sees a device from one merchant selling a particular device on the site at a time.

Each supplier is analyzed and given a score based on the ratio between price and quality, taking into accounts elements such as sale rate and customer satisfaction. The site presents the top-rated merchant's goods first.

"The customers only see one reference, one price, like a new product, and doing that puts us in the way of the new device category and brings less friction and more trust," he says.

But the most important aspect Vaute believes is the six-month warranty offered on every device.

"We're truly sending a strong signal to the consumer that we can vouch for the device. It's a concrete way to reassure consumers, which is the main challenge of the category."

Ultimately the Back Market team want their consumers to make a choice, choosing to 'adopt' refurbished rather than buy new. "The goal is Fair Tech," he says. "It's time to start a movement."

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