Industry action by electricals' sector set to boost UK economy

12th December 2013

The UK electricals sector will collaborate on new ways of working through a new initiative, the Sustainable Electricals Action Plan1. It will be delivered by the leading body on resource efficiency, WRAP, and is underpinned by WRAP’s new research published today.

It is being developed to bring together businesses from the electricals sector to explore and take action on the significant opportunities that could boost the UK economy. For example, encouraging trade-in of used TVs alone could grow UK GDP by around £800 million per year.

Previous WRAP research2 showed that around 25% of electrical and electronic products discarded by householders at recycling centres were suitable for re-use. If these products were re-used and the lifetimes of shorter-life products were extended, the country could save up to 170,000 tonnes of resources, delivering a carbon benefit of around 1.1 million tonnes CO2 per year.

The evidence comes from WRAP’s new report – Switched on to value - which brings together extensive technical investigations and new evidence from consumer research, product design reviews and a study of the asset management market. It reveals significant opportunities for businesses and consumers through trading-in used electronic equipment and designing longer life appliances.

It’s estimated that UK householders have at least £1 billion worth of electrical and electronic equipment in their homes which is no longer used but still holds significant value3. WRAP estimates the UK market value for trading pre-owned equipment could be worth up to £3 billion.  Consider this with the fact that only 7% of electricals are currently reused and a third ends up in landfill, and it presents real opportunities for businesses and consumers to unlock that value. Particularly as WRAP’s new consumer research indicates an appetite for trading in consumer electronics and purchasing more reliable appliances.

A market for this business model is evident with two thirds of consumers saying they would be willing to trade-in their technology products such as TVs, tablets and cameras through a reputable retailer. Providing such a service would enable consumers to release the value they didn’t realise they had and offset the cost of a new product, or upgrade to a new model sooner.

And, in addition to this, 55% of those surveyed said they were likely or very likely to buy second-hand technology products. Therefore, if retailers adopt a trade-in model they could meet consumer demand and access new markets by reselling the unwanted items.

However, the current barrier facing consumers is that more than half said they were unsure or didn’t know where they could trade in.  By tackling that issue, and providing a financial incentive to consumers, businesses could improve their bottom line and have more satisfied customers. WRAP is looking to work with companies in evaluating and demonstrating new trade-in approaches.

The trade-in model is already being used for mobile phones and Mazuma claims to ‘re-home’ around 1.8 million4 mobile phones each year: that’s equivalent to 10% of the UK smartphone market5, consider this for other technology products and the opportunities are vast.

The report also reveals that up to a third of household appliances such as washing machines, fridge freezers and vacuum cleaners are not lasting as long as people would like6

One way for the sector to deliver on this is through design specification for products that last longer; WRAP’s product design reviews revealed 15 out of 16 products could be improved to deliver significant cost savings and reduced returns through simple changes in the design and production process.

This offers significant opportunities for brands and retailers to address customer expectations, grow their market and strengthen brand value whilst reducing costs7, particularly when product returns cost the UK economy £400 million each year8.

In order to realise the significant financial and environmental gains, WRAP will help businesses investigate these options, and take action, through the ‘Sustainable Electricals Action Plan’. This new initiative will encourage the partnerships needed to develop a more robust market for product trading, repair, re-use, and ultimately seek to have products designed for long life and multiple use.

Dr. Liz Goodwin, CEO of WRAP, said: “In a world of diminishing resources it’s critical that we act now. The amount that we’re throwing away is incredible – a sheer waste of precious resources. This report reveals real opportunities where we can change that and reap both financial and environmental benefits.

“The report indicates clear advantages to changing the way electrical and electronic products are made and sold. Adopting these new ideas would give customers better value and would help the UK take a step towards a more circular economy - keeping the products in use for longer and offsetting the global impact of making new products.”

Simon Eves, head of Environmental Affairs at Panasonic UK and member of the Electrical and Electronic Products Pathfinder Group, said: “Panasonic is committed to providing ‘A Better Life, A Better World’ to our customers and society. To achieve this, it’s vital that our business is resilient and can deliver great business performance along with better use of resources. That’s why Panasonic works with WRAP and the Pathfinder Group, to explore and contribute to new opportunities for innovative resource utilisation, with the aim of sound business growth.”

To find out more and take advantage of these opportunities visit www.wrap.org.uk/rebus

Footnotes

1. Announced as part of Defra’s Waste Prevention Programme for England
2. The value of re-using household waste electrical and electronic equipment
3. Estimate based on two TNS omnibus waves (1,223 and 1,258 households) in January 2013.
4. www.mazumamobile.com/about.php
5. Based on GfK Panelmarket data received February 2013
6. 34% of washing machines, 38% of fridges and 28% of vacuum cleaners are failing to last as long as UK customers expect.
7. WRAP’s design reviews revealed a premium brand washing machine could potentially save £550,000 per 100,000 units.
8. Based on UK annual electrical sales of £16bn (GfK) and a product return rate of 2% (US average for appliances and consumer electronics based on data from www.warrantyweek.com)


The report - ‘Switched on to value’ - brings together extensive technical investigations and new evidence from consumer research, product design reviews and a study of the asset management market.

Evidence is drawn from these reports detailed below, some of which are also being published today.
• Reducing the environmental and cost impacts of electrical products – already published
• Consumer demand for resource-efficient business models on electrical products - already published
• Electrical and electronic product design: product lifetime – published today
• Value of consumer electronics products through sale and re-use – published today
• Economic Impact of Resource Efficient Business Models – published today

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