Photo: Walmart
Will refurbished products deliver ‘good as new’ results for Walmart?
Walmart has launched a program selling refurbished appliances and consumer electronics that it says will offer high-quality products at a fraction of the cost of buying them new.
“Good as new” is the goal of Walmart Restored, the retailer’s latest initiative to help consumers stretch their dollars and build sales outside its core grocery business.
“We already work with sellers and suppliers on Walmart.com who are committed to refurbishing top-quality products and preparing them for a new home at a fraction of typical costs,” wrote Michael Mosser, general manager, Walmart Marketplace, earlier this week on a company blog. “And now, those items will be even easier to find and shop with the Walmart Restored program designation. Whether they visit the Walmart Restored section of Walmart.com or see items pop up in search, it has never been easier for customers to shop for quality refurbished items featuring brands like Samsung, KitchenAid and more.”
The retailer says that all refurbished products are inspected, tested and cleaned before being made available for purchase. Each item comes with a 90-day free return policy so that customers can purchase items with confidence.
Refurbished items are currently available for purchase online, and Walmart said it will roll out the program in select stores this fall.
Walmart is not the only retailer to get into refurbished item sales. Amazon.com, Apple, Best Buy, and eBay all have programs that give customers the opportunity to buy the brands they want at lower prices than they would cost new.
Best Buy sells its refurbished items in stores and online through its outlet operation. The chain said it would double this year the number of physical locations it operates selling clearance, open box, pre-owned and refurbished items.
Shoppers can go to bestbuy.com/outlet to check out what’s available at their local store. They can also place an order for any product and choose to pick it up at a nearby outlet or have it delivered same-day.
Best Buy is expanding the product selection at its outlets, adding gaming products, laptops, mobile phones and tablets. Every new outlet will have a Geek Squad area for technical support.
Discussion Questions
DISCUSSION QUESTIONS: Do you expect sales of refurbished electronics to get a significant boost as a result of inflation? Is Walmart well positioned to grab a significant share of this market?
Poll
Loading …BrainTrust
David Spear
VP, Professional Services, Retail, NCR
Mel Kleiman
President, Humetrics
Selling refurbished goods is not only right for these inflationary times, but it’s also good for the environment. With historical levels for inflation, consumers are looking for bargains and refurbished goods is a great option for many. Walmart is very well positioned to take a significant share of the market, but I’d argue that there’s plenty of opportunities for any retailer who can effectively execute on a refurbishment program. With so many unwanted goods being dumped into landfills, refurbishment programs will also help reduce this waste. Win-win-win.
Given the typical Walmart shopper is looking for value, this seems like a good service to add. The whole secondhand and resale market was growing rapidly before the current crunch, and inflation and a more hard-pressed consumer is going to give it a further boost. Walmart is smart to get in on the act.
Buying refurbished equipment has been around for a long time. Nothing new here. What is new for Walmart is the level at which they will promote this concept. Walmart is known for saving their customers money. This is yet another way to do so.
This is an excellent move for Walmart. They’ve built their brand on value. The market for refurbished or as we once said “used” products is strong right now. Customers who are sensitive about sustainability and the environment are choosing to reuse instead of buying new. Add in value shoppers for whom a new iPad or computer is not feasible; this might be a great choice. This strategy will be a home run for Walmart. It aligns so well with their brand and their customers.
Large corporations have a mandate to seek growth opportunities and increasing returns for shareholders. However that goal eventually makes even the best run companies consider opportunities that are inconsistent with their business model and core strengths. Walmart is a titan in the area of logistics, inventory planning, and vendor management – all areas where they can develop appropriate processes, performance metrics, and control over a manageable number of variables. Refurbished products introduces so many new variables – product use and abuse, environment, maintenance, multiple refurbishers policies and standards, etc., many of which cannot be measured and controlled by the core team in Bentonville. From an initial perspective, this looks like a messy endeavor which will take Walmart away from the areas in which they excel and outperform the competition: organization, predictability, and speed of operational decision making.
Refurbished products allow more consumers to purchase products they otherwise are unable to. Apple sells refurbished iPhones and iPads with a one-year warranty. Amazon and Best Buy have done so and guarantee for 90 days. Walmart customers will see this new addition to the company’s offering as good news. Value-sensitive consumers have been tapping into the refurbished market, which will only increase given inflationary pressures. Good move, Walmart, but why did it take you so long?
Great move by Walmart. I’ve purchased several used laptops before and have had very positive experiences with them. Given Walmart’s scale and EDLP philosophy, this should be a boon for the Bentonville giant.
Everybody loves a bah-gin, as the say in New England. This move is clearly the right one for the retailer and the consumer. The consumer gets said bargain and the retailer gets to resell those pesky returns which can be up to 30 percent or more of the online purchases. With shoppers moving down market in a troubled economy, this will play well. Also, it’s more sustainable. They are following in the footsteps of a lot of other retailers, such as Best Buy, who have already found success in becoming more sustainable through offering resellables.
Walmart customers are the perfect target for a program like this. Amazon had been offering it for quite some time, but their main handle is convenience and speed while Walmart’s mainly known for value. This aligns with their core value system and is sure to be a win.
Consumers have embraced purchasing gently used clothing at stores like Nordstrom, so why not embrace fully refurbished and warrantied items at Walmart?
I recently visited an independently owned fix-it type shop to repair a badly damaged iPad screen. Two other stores that offered the same services both told me it wasn’t repairable. Guess what? It was and it works perfectly. This retailer also sold refurbished computers, tablets, and mobile phones at great prices. I bought another iPad as back-up and will return to this store to shop again. This is a smart move by Walmart that customers will appreciate.
Sales of refurbished products will grow as people want to buy new products at lower prices. Any consumer’s trepidation with buying used products is reduced by the 90-day Walmart free return policy. Walmart is well positioned in this market as they are starting earlier than other retailers, have a wide selection of products to sell, and many of their customers are price conscious.
With all the comments already made so far, there is not much more to say. Sales of refurbished electronics from Walmart at very attractive prices will most certainly produce a significant boost in sales, not only as a result of inflation price increases but also as a result of dwindling household budgets. That may very well improve heart-share of consumers who finally discover that they can afford what they desire. That’s customer creation.
Inflation can be an initial driver, but I believe Walmart is thinking ahead. Refurbished goods, especially electronics have a significant market already. Companies like Best Buy have been capturing this market for years. Walmart is expanding their service capabilities and product assortment. With the electronics and appliances Walmart sells each year, this can be a booster for them.
Great move, great timing. For Walmart and the customer. This move is taking advantage of the perfect storm, with rising inflation and environmental concerns — a winning proposition for both Walmart and the consumer.
I’m a big fan of “factory refurbished” and “open box” electronics, like phones and audio gear. Who can argue with “last-year’s flagship model at 1/3 the price,” with a 90-day warranty?
These items are not very hard to find now, but it can be hard to evaluate the reliability of the sellers. By leveraging its reputation and scale, Walmart can kick this secondary market into high gear and make these products much more accessible to their value customers, while earning better margins.
While Walmart Restored is positioned as strictly a walmart.com offering, I wonder whether there is an in-store play afoot? There may not be sufficient merchandise consistency to keep items in stock, but an ordering kiosk could be a winner for shoppers.
Sorry, but I’m going to be the naysayer here: Walmart’s whole raison d’être is low prices, but it achieves this thru ruthlessly stripping away underlying costs — generally relying on standardization and buying in bulk; but refurbishing things is to a large extent a bespoke business. I just don’t see the same old business practices working here.
It’s good for the environment, a good sustainability play for Walmart, fits with Walmart’s overall value proposition, and helps gain new market share. And during inflationary times refurbished items, like used cars, definitely see a boost in sales. Key to its success though will be the quality of the refurbishment and the online reviews from customers. Time will tell.