musicMagpie boss Steve Oliver says one of his company’s biggest challenges is fighting “apathy” — but his firm’s Asda kiosks are helping him grow the brand while helping challenged shoppers to pay their bills.
Mr Oliver co-founded Stockport’s musicMagpie in 2007 to resell CDs and DVDs. It has grown into a “circular economy” giant, buying and reselling electronic devices and physical media. Last week it released its interim results, saying it had bounced back after a tough start to 2023.
Group CEO Mr Oliver spoke to BusinessLive about some of the group’s operational highlights - including its ongoing partnership with Asda that is driving the success of its consumer technology arm. The company has been putting SMARTDrop Kiosks into Asda stores where customers can recycle phones for quick cash. It said this week that those kiosks now account for 45% of musicMagpie's consumer technology sourcing in the 海角视频
Mr Oliver said the kiosks were another way for musicMagpie to tackle what he calls customers' “apathy” — people leaving devices in a drawer and doing nothing with them. Putting the kiosk in front of people as they shop means it’s more likely that people will finally decide to get rid of those goods.
“I've gone and stood in my local Asda and watched it,” he said. “It’s fascinating to observe as a kiosk catches somebody's eye. Eighty per cent of people don't recycle their old e-waste. But a kiosk catches their eye and they think ‘I might have a go at that…’
“It's bringing brand awareness, it's bringing awareness of the service — 45% now of our tech is being bought through a kiosk. People just love convenience, ease, trust, and speed. They can sell their device and get the money in their account within 15 minutes.
“They can then go and do the shop. And what Asda tells us is that with the average transaction value of that phone, they're not paying for that week's shop, they're paying for two or three weeks' shop.
“So Asda love it, because it's bringing people into their store, putting cash in their pocket that they can then go and spend in that store. They have got the flexibility to go and spend it elsewhere. But a lot of people are spending it that week.”
People looking to sell and to save
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The cost of living crisis is forcing people to find ways of saving money and to find ways of making money from things they don’t need. Mr Oliver says musicMagpie is well-placed in both areas.
He said: “I guess we've always been here to help ever since I started in the garage from 2007, and Martin Lewis was promoting musicMagpie as a great way to raise cash or declutter. That’s even more so now — when you've got something in your drawer that you can pay for the next couple of weeks' shopping with or pay your gas bill with, that's really powerful.
“I've always said that our biggest competitor in terms of us buying things off consumers is apathy, people doing nothing with things."
Mr Oliver said the current economic situation was making people put more emphasis on seeking value.
He said: “I think people when they're buying are trusting refurbished more, and thinking, ‘well, I don't need to spend £1,000 pounds on a new device. I can spend £400 on a refurbished device and I can spread that cost, can do a rental or a buy now pay later’.
“We've always positioned ourselves as that consumer champion as an alternative for people who may want to save money or raise cash.”
Device rental business is growing
The group also reported growth in its rental and buy now pay later arms. Its device rental subscription service had 39,000 active subscriptions as at 31 May 2023, up from 24,000 a year earlier.
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Growing rental has challenges for musicMagpie, but also helps it in the long term by bringing reliable recurring revenue.
Mr Oliver said: “Rental is all about for us, increasing the return per device and lengthening and deepening our relationship with each customer.
“If I sell you a phone today you may be very happy with it. You may keep it for two or three years.
“What the rental offer does is allow you at the end of the first year to trade up - give it back, we'll send you the next one for the same rental price. Or - and this is what quite a lot of people are doing - keep the device and we'll give you a discount. So unlike all your other subscriptions that are going up we'll give you a discount to keep the device you are.
“It's proven to be very popular. The challenge for us as a business is that we do make a greater return on day one if we sell it. The rental is more about that medium to long term return. So what we have got to do is get that balance right constantly.”
musicMagpie has also focused on getting sales through its own store.
Mr Oliver said: “Historically we've scaled the business using Amazon and eBay. We still trade with them. But 79% of our tech sales are now done on our own store. And I think that's really helped again with the gross margin and profit.”
Could CDs be as resilient as vinyl?
The company’s physical media business is showing steady decline. In its interim results, the group said revenue in its discs, media and books arm fell from £25.3m to £20.9m with DVD and gaming sales hit by the impact of streaming.
But CDs, Mr Oliver said, are not going away quite yet.
“We've had a couple of months where we've seen our CD sales increase year on year,” he said. “I think they are a resilient format.
“I end up sounding a bit defensive at times about this media side of the business. It is overall in decline. But what I will draw attention to is the book market and the vinyl market. Both saw that sharp decline, and digital books were going to finish every independent bookstore in the country. . . and it's come back. Vinyl is now seen as a real connoisseurs' product.
“And actually there is just another dynamic in there. . .what's one of the biggest discretionary spending in a household, when they look through their list of monthly outgoings? It's Sky, Netflix, Amazon, Disney, HBO, Britbox, all these different subscriptions.
“You can go and buy a three pound CD or DVD that keeps the family happy and you can play it over and over again, especially if you're passionate about your music or film. That is still a great alternative. It's not for the mass market, but it is still great value.”