EXPANSION OF RENTAL OFFERING
7 February 2022
musicMagpie plc
("musicMagpie", or "the Group")
MUSICMAGPIE EXPANDS RENTAL SERVICE TO INCLUDE TABLETS, GAMES CONSOLES AND MACBOOKS FOLLOWING HUGE POPULARITY OF SMARTPHONE RENTAL OFFERING
musicMagpie, a leading re-commerce business in the UK and US specialising in refurbished consumer technology, is pleased to announce that it has expanded its rental subscription service beyond smartphones and into new product categories such as tablets, games consoles and MacBooks.
Summary
· Smartphone rental offering has already attracted 13,500 active subscribers since first launch in October 2020
· Popularity of this offering has prompted an extension into other consumer technology categories such as games consoles, tablets and MacBooks
· Opportunity to expand this flexible and highly competitive rental offering across further consumer tech categories, consistent with growth in wider subscription economy
· Subscription service category extension further builds on musicMagpie's circular economy ecosystem, contributing to a reduction in e-waste
An affordable and flexible alternative to outright purchase
Originally launched in October 2020, musicMagpie's innovative rental subscription service provides customers with a more affordable and flexible option than an outright purchase or a pay-monthly contract with a mobile network. The device is supplied to the customer at no up-front cost, in return for a monthly payment from as little as £8.99 over 12 months. Once the rental agreement is over, the customer can upgrade to a more recent device, keep the same device and pay less, or cancel the agreement and return the product.
The smartphone service has already attracted c.13,500 active subscribers (up to 30 November 2021) including the first cohort of contract renewals, and its success has prompted musicMagpie to extend into other categories. Games consoles, tablets and MacBooks are all now available to rent, and the Group sees potential to expand into other types of consumer technology in future.
Monthly rental fees start at £8.99 for a refurbished phone, £11.99 for a console, £12.99 for an iPad, and £19.99 for a MacBook. The Group has also recently launched new Apple products onto the musicMagpie Store in the UK, with the latest iPhone 13 available to rent for as little as £31.99 a month.
In addition to the benefit to consumers, for musicMagpie a rental subscription generates recurring revenue for the period of the contract, with the ability to achieve further additional revenue from second and third rental periods of that product, and ultimately a potential sale of the product at the end of its rental life. In the case of a rented smartphone, the Group achieves a higher revenue (after approximately 19 months of subscription) and EBITDA contribution (after approximately 7 months) over the life of that device compared to an outright sale.
Aligned to consumer subscription economy growth trend
The strong progress that musicMagpie is making in the rental area is part of a wider growth trend in the subscription economy; from Q4 2011 to Q4 2020, the Subscription Economy Index, which tracks the volume of business generated by subscription-based products and services, grew by 437% (source: Zuora).
Furthermore, a report by musicMagpie has found that one in three people say they are more likely than ever before to rent things instead of buying them, citing a range of reasons such as affordability, flexibility, protection of the environment, and being able to access higher quality items. Over half (53%) also agreed that a redefinition of ownership is underway, whereby consumers don't place as much emphasis on ownership and, as a result, have more access to a greater number of products and services.
Steve Oliver, Chief Executive Officer of musicMagpie, said:
"We are delighted with the progress of our innovative rental subscription service, which is why we've expanded it beyond smartphones and into other consumer technology categories. It's clear from the popularity of this service, as well as the growth of the wider subscription economy, that consumers are increasingly prioritising access, value and sustainability over full ownership.
"There is also a growing awareness of the rising problem of e-waste, which musicMagpie's circular economy model helps to tackle head-on by refurbishing and reselling consumer technology products, giving them a second or third life which they would not otherwise have had. The beauty of our rental scheme in particular is that it keeps electronic products in the musicMagpie circular ecosystem for longer.
"The amazing consumer value that renting a device from musicMagpie provides, in addition to the environmental benefits that it generates, means that our rental proposition is a true embodiment of our long-standing 'smart for you, smart for the planet' ethos, which is why maximising and scaling our rental business will be a major point of focus for us in the coming year."
Notes to Editors
musicMagpie is a leader in the re-commerce of consumer technology (including smartphones, tablets, consoles and wearables), disk media (including CDs, DVDs and games) and books, with sustainability running to the very heart of its operations.
Founded in 2007, the Group has an established presence in the UK, with operations in Stockport, Greater Manchester, and in the US in Atlanta, Georgia. Operating through its two trusted brands - musicMagpie in the UK and Decluttr in the US, the Group's core business model is simple: to provide consumers with a smart, sustainable and trusted way to buy, rent and sell refurbished consumer technology and physical media products.
It has a strong environmental and social focus, as demonstrated by its trademarked 'smart for you, smart for the planet' ethos. Over 400,000 consumer technology products were resold to consumers in the year ended 30 November 2021 by the Group. In addition, the Directors estimate that the Group re-sells approximately 2,500 tonnes of books and disc media each year that could have ended up as waste. As a result, the Company has received the London Stock Exchange's Green Economy Mark, which recognises companies that derive 50 per cent. or more of their total annual revenue from products and services that contribute to the global 'Green Economy'.
When selling to musicMagpie, the customer is offered a fixed valuation via the website, provided with free logistics to ship the products and (subject to it being 'as described') receives payment for their product on the day of arrival at the Group's warehouse.
Customers purchasing from musicMagpie receive branded refurbished product for a fraction of the price of buying new. All consumer technology products sold by the Group are sold with a free 12-month warranty.
The Group has the highest number of seller reviews on both Amazon and eBay and has consistently achieved extremely positive feedback scores. The Group also has a 4.6* rating on UK Trustpilot with over 200,000 reviews.
For further information please visit: www.musicmagpieplc.com/
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