In an era where consumer choices are vast, and expectations are high, retailers face the ongoing challenge of not just attracting but retaining customer interest and loyalty.
The Retail Protection Report Global by Cover Genius illuminates consumer attitudes toward product protection, a facet of the retail experience that is gaining prominence. Drawing on insights from over 11,408 respondents across 12 countries, this report delves into the dynamics of consumer preferences regarding product protection offered by retailers, manufacturers, and payment apps.
Check out what it revealed!
#1 Consumer Demand for Product Protection
The first insight tells us that there is strong consumer demand for embedded and post-purchase product protection. As many as 76% of consumers worldwide have expressed interest in this option. This interest underscores a pivotal opportunity for retailers to enhance consumer trust and satisfaction by integrating protection offers seamlessly into the customer journey.
Conclusion: It’s not just about shopping anymore. It’s about providing peace of mind and convenience at the point of sale and beyond.
#2 Convenience: The Driving Force
The next standout finding is that convenience is the primary motivator behind consumer interest in product protection. This reflects changing consumer expectations, where the added value of ease and efficiency at checkout can significantly influence purchasing decisions.
Competitive advantage: Retailers equipped to offer this streamlined service are better positioned to capture and retain consumer interest. As a result, they can enhance overall sales and customer experience.
#3 Willingness to Pay a Premium
Interestingly, the report reveals that consumers are willing to pay a 21% premium for product protection. This willingness to invest more for added security and peace of mind opens up new avenues for retailers to boost ancillary revenue.
By curating bundles that reflect the most common concerns, retailers can demonstrate empathy and understanding toward their customers, resulting in stronger connections and encouraging repeat business.
Listen to customers: It’s a clear signal that consumers value the assurance that comes with product protection. They view it as an integral part of their purchase.
#4 The Bundle Effect
Further insights indicate a 60% higher likelihood of consumers purchasing product protection if it’s bundled with other services like:
- protection of shipping,
- protection from accidental damage,
- protection of returns.
This bundling strategy not only simplifies the decision-making process for consumers but also enhances the perceived value of the protection offering.
Gain benefits: For retailers, this approach could significantly reduce cart abandonment rates and improve conversion.
#5 Protection Preferences Across Categories
When considering future purchases, consumers showed a marked preference for product protection in certain categories, with:
- personal electronics (65%),
- home appliances (52%),
- and luxury goods (34%) leading the pack.
This preference highlights the areas where consumers feel most vulnerable to potential losses.
Take the opportunity: This suggests that retailers in the above segments have a ripe opportunity to meet these specific needs.
#6 The Appeal of Extended Warranties
The report also sheds light on the types of product protection consumers are most inclined towards, with extended warranties being the most popular choice (56%). This preference points to a broader consumer desire to mitigate the financial risks associated with repairs and replacements.
Tip: Having this information, you can offer comprehensive protection plans and bet on greater customer care.
#7 The Impact of Positive Claims Experiences
The last key takeaway from this report is the significant impact of the claims experience on customer satisfaction and loyalty. An overwhelming 87% of respondents indicated they would recommend a brand after a positive claims experience.
This shows that a mere complaint doesn’t mean that the customer will have a bad impression of your store, on the contrary – you can turn it to your advantage and show professionalism.
Enhance the customer journey: Understand the importance of not just offering product protection but ensuring that the process of claiming that protection is efficient, transparent, and customer-friendly.
Over to you
What can we learn from this report in general? Among other things, there is a growing importance of product protection in the retail sector. For retailers who want to capitalize on this trend, the key is to understand and adapt to consumer expectations. More specifically, you need to offer convenience, value, and assurance at every touchpoint.
By doing so, you, as a retailer, can not only increase your revenue potential, but also strengthen customer relationships in an increasingly competitive environment.
