Refurbished Products Research Articles

Contaminated by Its Prior Use: Strategies to Design and Market Refurbished Personal Care Products

Refurbishment is an effective circular strategy to lengthen a product’s lifetime. However, refurbished products that are intimately used, such as personal care products, cause a feeling of unease in consumers because they are perceived to be contaminated. In 15 in-depth online interviews with female users of intense pulsed light (IPL) device living in the Netherlands, we explored why consumers have contamination concerns regarding an IPL device and proposed strategies to decrease these. Participants felt that refurbished personal care products with signs of wear-and-tear were a riskier choice and expected that the device would malfunction, have a shorter product lifetime, and would be contaminated due to the previous use. Based on the location and amount of wear-and-tear, participants made inferences on how the prior user had treated the device. While light wear-and-tear indicated normal use, heavy wear-and-tear was interpreted as a sign of bad treatment by the previous user. To keep refurbished personal care products at their highest value, we suggest five design strategies to minimize contamination concerns by designing a product that smells and looks hygienic after multiple lifecycles: (1) using colors that evoke associations with hygiene, (2) making signs of wear-and-tear less visible, (3) using smooth (cleanable) materials, (4) minimizing the number of split lines in the product, and (5) giving refurbished products a clean product smell. For refurbished personal care products with signs of wear-and-tear that cannot be eliminated, we propose mitigating consumers’ contamination concerns with marketing strategies, such as fostering a good brand image, offering refurbished products at a lower price, with an extended warranty, and underlining expert check-ups and standards during refurbishment.Graphical abstract

Willingness to purchase refurbished products sold online: a qualitative inquiry of young consumers from an emerging market

PurposeThe literature provides evidence of consumers’ willingness to purchase (WTP) refurbished products. However, the studies focusing on young consumers’ (18–24 years) purchasing behaviour of refurbished products from online platforms/stores are limited. Therefore, the purpose of this study is to conduct a qualitative study to identify the key attributes/factors that influence young consumers’ WTP refurbished products.Design/methodology/approachTwo qualitative techniques, focus group discussion (FGD) and depth interviews (DI), are used for data collection. Criterion sampling is used for sample selection. Consequently, 37 participants (20 for FGD and 17 for DI) from India were recruited.FindingsThe study’s findings indicate six broad attributes/factors (purchase attributes, product attributes, credibility, reviews/support, refurbishment process and ecological factors) that influence young consumers’ WTP refurbished products. In each attribute, some characteristics are unique (for example, greater trust in online platforms/stores, preference for video reviews and historical information of the product) to young consumers.Originality/valueThe current study integrates three literature streams: consumer behaviour in the online/offline context, young consumers’ inclination towards an online purchase and WTP refurbished products. To the best of the authors’ knowledge, this is the first study to do it.

An agent-based modeling framework for the design of a dynamic closed-loop supply chain network

The supply chain is a dynamic and uncertain system consisting of material, information, and fund flows between different organizations, from the acquisition of the raw materials to the delivery of the finished products to the end customers. Closed-loop supply chains do not end with the delivery of the finished products to the end customers, the process continues until economic value is obtained from the returned products or they are disposed properly in landfills. Incorporating reverse flows in supply chains increases the uncertainty and complexity, as well as complicating the management of supply chains that are already composed of different actors and have a dynamic structure. Since agent-based modeling and simulation is a more efficient method of handling the dynamic and complex nature of supply chains than the traditional analytical methods, in this study agent-based modeling methodology has been used to model a generic closed-loop supply chain network design problem with the aims of integrating customer behavior into the network, coping with the dynamism, and obtaining a more realistic structure by eliminating the required assumptions for solving the model with analytical methods. The actors in the CLSC network have been defined as agents with goals, properties and behaviors. In the proposed model dynamic customer arrivals, the changing aspects of customers' purchasing preferences for new and refurbished products and the time, quantity and quality uncertainties of returns have been handled via the proposed agent-based architecture. To observe the behavior of the supply chain in several conditions various scenarios have been developed according to different parameter settings for the supplier capacities, the rate of customers being affected by advertising, the market incentive threshold values, and the environmental awareness of customers. From the scenarios, it has been concluded that the system should be fed in the right amounts for the new and refurbished products to increase the effectiveness of factors such as advertising, incentives, and environmental awareness for achieving the desired sales amounts and cost targets.

Investigating Business Potential and Users’ Acceptance of Circular Economy: A Survey and an Evaluation Model

Circular economy is gaining attention in business and society to advance sustainability. This paradigm is particularly relevant for energy-consuming products such as washing machines, where alternatives to linear economy such as pay-per-use and refurbishment are gaining ground. To succeed, these business models should achieve consensus and acceptance among users. However, little attention has been paid to customers’ interest for circular economy business models so far. This paper aims to compare the economic and environmental impacts of pay-per wash and refurbishment business models, while investigating the degree of users’ acceptance and factors influencing it. A survey has been designed to collect users’ data regarding washing machine consumption patterns and acceptance rates of the circular business models. An evaluation model was developed to assess the economic and environmental impacts of pay-per-wash and refurbishment against a traditional linear model, fed with data from 279 Italian households collected through the survey. Finally, logistic regressions were carried out to investigate the influence of different customer, product, and usage factors on the acceptance rates of the two circular business models. Results show that, on average, pay-per-wash business models and washing machine refurbishment can guarantee environmental savings. However, only refurbishment generates economic savings for users. Moreover, only around half of the users’ sample shows a positive degree of acceptance of such alternatives. Respondent age has been found as a significant factor influencing the interest towards a refurbishment model, while the washing machine failures experienced by users and the relevance of the environmental gains achievable influence the acceptance rate of pay-per-wash models. Thus, when offering pay-per-wash schemes, suppliers should emphasize the information on the environmental benefits of this alternative, and that with such models they take over the responsibility and costs for maintenance and repair. On the other hand, providers of refurbished products should target younger consumers, who are less affected by a bias against second-hand goods.

Increasing Acceptance for Refurbished Products at the Example of E-Cargo Bikes

The increase of resource efficiency of products is inevitable due to growing scarcity of resources and climate change. Circular Economy addresses this by circulating products, e.g. by refurbishment. When offering refurbished products, one big hurdle for their successful implementation is acceptance. As recent research has shown, different factors influence the choice between new and refurbished products.The aim of this paper is to point out the main factors leading to acceptance or rejection by using existing models and contemporary literature from psychology, economics and marketing. Measures to increase the users’ acceptance are derived for the example of a refurbished e-cargo bike.

Intertemporal Product Management with Strategic Consumers: The Value of Defective Product Returns

Problem definition: An increased incidence of quality issues, resulting in defective product returns (DPRs), is a concern for firms bringing innovative products to market. Although a firm can recover value from DPRs through refurbishing, consumers are known to act strategically in anticipation of the future availability of refurbished units. We study a firm’s strategy for offering a new product and refurbished DPRs to strategic consumers across time. Academic/practical relevance: Aided by emerging shopping tools, an increasing number of consumers consider buying refurbished versions of products rather than their new counterparts. A novel contribution of our work is the recognition of the refurbishing of DPRs as a possible solution to the time inconsistency problem that arises when a firm offers products to strategic consumers across time. We characterize how the product line decisions and profit of the firm are influenced by the defect rate, the perceived quality of refurbished DPRs, and consumers’ hassle cost of returns. Methodology: We develop a two-period game-theoretic model to characterize the firm offering the new product and refurbished DPRs to strategic consumers across time. Results: The refurbishing of DPRs helps the firm implicitly commit to limiting the quantity of the new product offered in the future, allowing the firm to charge a premium for the new product today. As a result, firm profit may even increase with the defect rate. These results persist across various model extensions. Managerial implications: Whereas the firm’s profit is the highest when there are no defects, opportunities to achieve marginal reductions in defect rates may not be worth the investment and may even be counterproductive. Also, efforts toward enhancing the perceived quality of the refurbished product or decreasing the hassle cost for consumers may better serve the firm than efforts toward marginally improving defect rates.

Do consumers mind contamination by previous users? A choice-based conjoint analysis to explore strategies that improve consumers' choice for refurbished products

Refurbishment is an effective strategy to extend product lifetimes in a circular economy. However, consumers believe that refurbished products are contaminated with traces of prior use, which can be indicated by the appearance (e.g., scratches) or functionality (e.g., lower battery capacity) of refurbished products. This research explores strategies to improve consumer adoption of refurbished products by reducing contamination. In a choice-based conjoint analysis, 785 participants were exposed to refurbished headphones varying in features related to contamination, warranty, and price. We tested three contamination-reducing strategies, including (1). Communication about the clean object state, (2). Eliminating signs of use (aesthetic and functional wear-and-tear) and (3). Renewing parts that touch the skin (e.g., ear-cushions). Additionally, we analysed whether different consumer groups are driven by different attributes of refurbished products. Results showed that most consumers value refurbished products that show no signs of wear-and-tear and that have parts touching the skin renewed during the refurbishment process. These attributes are even more important than the reduced price or warranty, even though these are frequently used to market refurbished products. Depending on the consumer group, other contamination-reducing strategies were of great influence. While some consumer groups highly valued that signs of prior use are eliminated through an as-new appearance, others preferred refurbished products without functional wear-and-tear. In conclusion, four design strategies to deal with contamination during multiple life cycles of refurbished products are discussed.

Is Your Retailer a Friend or Foe: When Should the Manufacturer Allow Its Retailer to Refurbish?

Refurbishing of used products is increasingly being recognized as a value recovery strategy in sustainable operations. Hence, manufacturers, retailers, as well as third‐party firms, engage in refurbishing. Manufacturers, to some extent, can deter other players from refurbishing through various means such as product design, intellectual property, and restricting access to spare parts and diagnostic tools. While previous research has extensively examined the question of whether a manufacturer should allow an independent third‐party player to refurbish used products, the question of whether a manufacturer should allow his retailer to refurbish them, to our knowledge, remains unanswered. In this study, we examine whether a manufacturer should refurbish used products himself or allow his retailer to refurbish them. We compare two closed‐loop supply chain structures: Model‐M, where the manufacturer refurbishes used products; and Model‐R, where the retailer refurbishes. In a two‐period setting, new products are sold in both periods and some of the first‐period products are refurbishable in the second period. We show that when either (i) the refurbishability of used products is low and the attractiveness of refurbishing (value of the refurbished product as compared to the refurbishing cost) is either moderate or sufficiently high, or (ii) the refurbishability is high and the attractiveness of refurbishing is moderate, the manufacturer, despite forgoing profits and facing competition from refurbished products, is better off with letting the retailer refurbish used products (Model‐R) than with refurbishing them himself (Model‐M). Identifying a novel mechanism through which the manufacturer benefits in Model‐R is our key theoretical contribution to the closed‐loop supply chain literature. Moreover, we provide some useful and interesting insights to policymakers related to customer welfare and the environment. We also analyze the performances of these models (Model‐M and Model‐R) in terms of supply chain efficiency. In addition, we discuss how some of our key results change if a third‐party refurbisher coexists with the manufacturer and the retailer. Our results not only support some of the current policies and practices but also shed some light on their limitations and suggest some avenues for improvement.

‘Closed-loop supply chain models with bundling strategy’

ABSTRACT In recent decades, due to the resulting competitive situation between new and refurbished products, the bundling tactics of closed-loop supply chain (CLSCs) is closely related to the marketing strategies adopted by the competitive channels. Despite this practice, there is little understanding on how exactly bundling strategies impact CLSCs' profits under a competitive environment. Therefore, this study made a major contribution by incorporating both bundling (mixed bundling and pure bundling) and collection strategies under price competition, into a game-theoretic model of CLSCs, where re-furbished products are packaged with new products by the retailer in a bundle. To analyse the bundling effect, mathematical models are developed under direct and indirect collection processes, and numerical analysis is presented. Results of the proposed model show that the total supply chain profit is higher in mixed bundling compared to pure bundling. Furthermore, it is observed that the direct collection strategy generates maximum profit in mixed bundling, while the indirect collection strategy yields higher profit in pure bundling. The results also show that under lower refurbished product’s market size, a pure bundling strategy would be helpful to increase the profit of the manufacturer and the retailer.

Seller reputation, distribution and intention to purchase refurbished products

The effectiveness of a closed-loop supply chain strategy for a tenable circular economy heavily depends on consumers' willingness to purchase such products. However, research has documented that consumers are skeptical about these products, thus making of interest the understanding of consumers' attitude and purchase intention. The literature provides limited evidence about the role of specific contextual marketing stimuli in shaping consumers' intention to purchase products derived from a closed-loop supply chain approach. This study aims to fill this important gap by examining the effect of the importance paid by consumers to seller reputation and distribution on consumers׳ intention to purchase a particular type of these products, i.e. refurbished smartphones. To do so, this study combines insights deriving from the stimulus response model and prospect theory. Findings from structural equation modeling indicate that the importance paid by consumers to seller reputation and distribution are significantly related to perceived value and risk, which in turn affect attitude and the intention to purchase refurbished products. In addition, findings highlight the centrality of the attitude construct in the model. The implications of these results can be useful for closed-loop supply chain managers, remanufacturers, and sellers, as they can help to improve their marketing initiatives and policies. Eventually, our theoretical model can also help scholars to improve the understanding of consumers’ mental processes when evaluating refurbished products.

Inventory model for sustainable operations of a closed-loop supply chain: Role of a third-party refurbisher

This paper investigates the joint decision on inventory and refurbishing strategies in a closed-loop supply chain, consisting of a manufacturer responsible for the production and first-market sales and a third-party refurbisher responsible for the refurbishment and second market. Based on a game-theoretic model, we investigate the effects of supply chain structures on the production operations, sales price of a refurbished product, profits and environmental performance. Through numerical analyses, we reveal that the integrated system yields higher first-market sales and a larger production lot size, while the decentralized one shows higher second-market sales and a larger refurbishing lot. Interestingly, the integrated system sets the higher price for the refurbished item due to channel conflict issues. Efforts to increase the second-market sales can harm the overall supply chain profit by leading to the decrease in the higher-margin first-market sales. We also show that the difference in pricing decisions and inventory holding cost components allows a better operational performance of the third-party refurbisher's process in the decentralized system. Then, it leads to the better environmental performance in the decentralized system, enhancing the refurbishing rate and sales of refurbished items while reducing scrap costs. By investigating the overall performance of integrated and decentralized supply chains, we offer important implications to practicing supply chain managers by revealing how the third-party refurbisher can help the sustainable operations of a closed-loop supply chain. We also contribute to the body of knowledge by incorporating pricing and lot sizing issues into the context of closed-loop supply chain management.

Production decisions of a closed-loop supply chain considering remanufacturing and refurbishing under government subsidy

Remanufacturing and refurbishing, as two essential strategies in the sector of reverse logistics, play a vital role in the area of sustainable development. With the increasing concerns on the environment friendly supply chain by the general public, we construct two remanufacturing models dominated by the original equipment manufacturer (OEM) and the independent remanufacturer (IR) based on the auto parts market which provides new products, remanufactured products and refurbished products. Considering the remanufacturing subsidy and the market environment parameters, we analyze the full-remanufacturing and partial-remanufacturing using the Stackelberg and Cournot duopoly game models. We then obtain the equilibrium strategies for each of these scenarios. We further carry out sensitivity analysis for the two remanufacturing models and investigate the impact of the remanufacturing subsidy on these two models. The findings in this paper enable us to compare the remanufacturing modes and show how the equilibrium outcome depends on the key model parameters. In the comparison and numerical analysis, they are revealed that (i) the improvement on the quality level of the refurbished products is always unfavorable to the quality level and the production quantity of both the new and the remanufactured products, especially in the OEM remanufacturing model; (ii) subsidy is ineffective in the IR remanufacturing mode when the remanufacturing cost is low; (iii) the IR remanufacturing outperforms the OEM remanufacturing in both economic benefits and social welfare, when the cost of remanufacturing and the customer willingness to pay for remanufacturing products are low, and the quality of refurbished products is high. These findings have potential implications for enterprise remanufacturing production and government policy-making in complex market environments.

Refurbished products and supply chain incentives

The emergence of online retail platforms and new retail technologies have enabled retailers to sell refurbished products to different markets, which exposes manufacturers to new challenges to control refurbished product market. This study investigates the incentives of supply chain members for refurbished products in a dual-channel supply chain. We examine the conditions under which the retailer is willing to sell refurbished products and the impact of refurbished products on manufacturer’s profits in three different cases, i.e., local market selling, across market selling, and dual market selling. Our results reveal that the manufacturer can effectively control the selling of refurbished products by a wholesale price contract when the retailer can only deliver refurbished products to her local market. However, when the retailer has the ability to deliver refurbished products into a cross-border market, supply chain members encounter different incentives for refurbished products.

Marketing strategies for refurbished products: Survey-based insights for probabilistic selling and technology level

The selling of refurbished products is considered a sustainable practice for businesses looking for strategies to improve their market image. However, companies still struggle to sell refurbished products for different reasons ranging from consumer's attitudes towards refurbished products to in-efficient pricing policies adopted by remanufacturing and manufacturing companies due to the lack of understanding of the actual market of refurbished products. This impacts the profitability of the remanufacturing industry on a large scale. This paper aims to discuss the importance of understanding the market of the refurbished product and the role of consumer purchase behavior. With an emphasis on the refurbished cellphone market, this study has run a survey analysis to test several hypotheses about consumer's viewpoint toward refurbished electronics and identify marketing strategies that may benefit promoting the sale of refurbished consumer electronics in the market. The survey analysis results suggest that consumers’ willingness to pay for refurbished cellphones depends on the degree of the technological obsolescence of the product. Consumer's willingness to purchase refurbished cellphones is higher for more technologically obsolete products. Also, the use of probabilistic selling or opaque selling might be a good strategy for selling refurbished products. Therefore, companies may consider using opaque selling as a marketing strategy since consumer choice decisions would change when dealing with an uncertain deal or probabilistic deals.

Fuzzy inventory model for new and refurbished deteriorating items with cannibalisation in green supply chain

Most green supply chain models focus on manufacturing and remanufacturing, but do not consider the refurbishing activities. Refurbished products are those that are slightly damaged or have some technical glitch and are quickly repairable. In this study, we research on electronic industry that utilises reverse logistics to collect used products and refurbish them. These products are then sold in the market at a reduced price. Cannibalisation effect of sale of refurbished products on the new product sales is taken into account. A crisp integrated model is developed for manufacturing and refurbishing cycle assuming demand, deterioration, collection and cannibalisation parameters are precisely known with the objective is to minimise total cost. However, in the real world, these parameters are seldom known accurately. To account for this, the model is further enhanced by considering various parameters as imprecise in nature. These parameters are represented as triangular fuzzy numbers and signed distance method is used to defuzzify the cost function. The contribution of this study is multifold. The study highlights the importance of green supply chain in electronic industry and establishes a comprehensive integrated model in green supply chain. Computational simulations and sensitivity analyses are carried out to offer managerial insight.

Data Mining based Prediction of Demand in Indian Market for Refurbished Electronics

There has been an increasing demand in the e-commerce market for refurbished products across India during the last decade. Despite these demands, there has been very little research done in this domain. The real-world business environment, market factors and varying customer behavior of the online market are often ignored in the conventional statistical models evaluated by existing research work. In this paper, we do an extensive analysis of the Indian e-commerce market using data-mining approach for prediction of demand of refurbished electronics. The impact of the real-world factors on the demand and the variables are also analyzed. Real-world datasets from three random e-commerce websites are considered for analysis. Data accumulation, processing and validation is carried out by means of efficient algorithms. Based on the results of this analysis, it is evident that highly accurate prediction can be made with the proposed approach despite the impacts of varying customer behavior and market factors. The results of analysis are represented graphically and can be used for further analysis of the market and launch of new products.

Data Mining based Prediction of Demand in Indian Market for Refurbished Electronics

There has been an increasing demand in the e-commerce market for refurbished products across India during the last decade. Despite these demands, there has been very little research done in this domain. The real-world business environment, market factors and varying customer behavior of the online market are often ignored in the conventional statistical models evaluated by existing research work. In this paper, we do an extensive analysis of the Indian e-commerce market using data-mining approach for prediction of demand of refurbished electronics. The impact of the real-world factors on the demand and the variables are also analyzed. Real-world datasets from three random e-commerce websites are considered for analysis. Data accumulation, processing and validation is carried out by means of efficient algorithms. Based on the results of this analysis, it is evident that highly accurate prediction can be made with the proposed approach despite the impacts of varying customer behavior and market factors. The results of analysis are represented graphically and can be used for further analysis of the market and launch of new products.

Refurbished or Remanufactured?-An Experimental Study on Consumer Choice Behavior.

Remanufacturing is one of the important means to achieve circular economy and improve the reuse of resources. But, compared with the reuse of old parts, most ordinary Chinese consumers are not familiar with remanufacturing. Because of this, the development of China’s remanufacturing industry is hindered. This paper introduces two kinds of consumer goods with different attributes, namely MP4 (the hedonic product) and cartridge (the functional product). The empirical study on the consumption behavior of Chinese consumers when they are faced with a variety of recycling options was performed. Empirical studies are divided into two stages: participants need to give hypothetical purchase decisions when facing situations of two products (new products and remanufactured products) and three products including refurbishment products, respectively. This paper analyzes the purchase intention and decision-making process of Chinese consumers for remanufactured products, new products, and refurbished products in these two situations. The consumers’ willingness to pay for remanufactured products and refurbished products is also part of the study. The experimental results verify that consumers have a different selection mechanism for new products, remanufactured products, and refurbished products, and there is also a certain relationship between this selection mechanism and the attributes of the product itself. The research shows that due to the different product attributes, consumers pay different attention to the environmental protection, quality, brand, price, and new and old preferences of products. The result of the model shows that the choice behavior of different products and their willingness to pay are also affected by different levels of these attentions. Through the research results, this paper finds conclusions like refurbished products have an impact on the development of remanufactured products, and consumers pay more attention to price but do not pay attention to environmental protection. The conclusion of the study provides references and practical implications for Chinese remanufacturing enterprises to formulate market strategy, for the government to formulate relevant policies, and for OEM production.

Trade‐in for Cash or for Upgrade? Dynamic Pricing with Customer Choice

Trade‐in programs for electronics products, e.g., mobile phones, have been increasingly popular. These programs target at customers (we call them “bargainers”) who seek to salvage or upgrade their old devices. There are two widely adopted trade‐in options: trade‐in‐for‐upgrade and trade‐in‐for‐cash. In this study, we consider a firm who offers both trade‐in options, that is, a hybrid trade‐in program, to acquire old products, then refurbishes and resells them, together with new product over a finite selling horizon. The bargainers choose which option to trade in their products while new customers decide whether to buy a new product or a refurbished one. When the selling price of new product is exogenous, we derive the optimal trade‐in prices of old product and resale price of refurbished product. We show that the optimal trade‐in and resale policies are of a threshold‐type and trade‐in‐for‐upgrade should be offered with a premium refund (compared to trade‐in‐for‐cash) only in early periods of the selling horizon. We further consider two variants of the above base model. In the first extension, the new product has a fixed amount of initial inventory and is not replenishable during the selling horizon. In the second extension, the new product price can also be determined by the firm. Our numerical results demonstrate that the hybrid trade‐in program could generate significantly more profit than either upgrade‐only or cash‐only trade‐in program.

The impact of secondary market competition on refurbishing authorization strategies

Secondary market where used or refurbished products are traded has attracted many independent refurbishers (IRs) to engage in refurbishing. It poses competitions for new product sales of the original equipment manufacturer (OEM) and presents new market opportunities for OEMs as well. Many OEMs have adopted refurbishing authorization as one form of cooperation. As a result, it is common that authorized refurbished products and non-authorized refurbished products coexist in the secondary market. This paper investigates a supply chain consisting of an OEM and two competing IRs. To this end, we model the decision-making processing of the OEM and two IRs as a Stackelberg game. We provide the conditions for the OEM to implement refurbishing authorization and for IRs to accept authorization. We identify that the critical trade-off is whether the indirect benefit from refurbishing authorization, such as authorization fee, can outweigh the direct cannibalization effect of the sales of refurbished products on new products sales. The comparative analyses show that the OEM can benefit from the secondary market only when the IRs gain enough profit from authorized refurbishment, and a high authorization fee is not always beneficial for the OEM.