More than half (57%) of online SMBs believe attaching commission-based protection plan offerings to items during the checkout could increase annual revenues by as much as 25%, according to data from Assurant Solutions.
In today’s climate, where the consumer has more control over purchases, retailers may want to consider providing protection plans or warranties. Particularly when they are buying online, consumers want to know that the product they receive is exactly what they saw online. They also want to guarantee that they can return the product at their own convenience.
The surveyed retailers expect the protection plan offerings to not only increase revenue but also to affect Average Order Value (AOV) per sale. As many as 35% feel such plans could increase their AOV between 6% and 9%.
The protection plans also may go a long way toward reeling in consumers for the long haul, as they give a sense a security other retailers may not provide: 40% of online SMBs believe that the offerings could result in repeat business on one quarter of all customer transactions.
“Customer loyalty today is driven by more than just a good price, it is also a result of customers who feel the merchant is looking out for their best interest and in this case trying to help protect their investment,” said Matthew Pufall, Director of Product for Assurant Product Protection. “This increase to the bottom line and customer loyalty — by way of product protection sales — is at the core of what is now known as ‘Protection Commerce’ for online retailers.”
Presently, “protection commerce” is more a goal to shoot for rather than a real-world offering for a number of retailers. Less than a third (30%) of respondents admitted that their lack of internal IT expertise has prevented them from implementing protection plans as an add-on for their web store products or checkout processes.