- Product protection plans boost revenue and customer loyalty for retailers
MOUNTAIN VIEW, Calif., Aug. 29, 2014 /PRNewswire/ -- The adoption of retail product protection plans continues to increase in the United States. Frost & Sullivan estimates the total US retail product protection market size to be approximately $8-10 billion across consumer electronics, home appliances, jewelry, sporting goods, furniture, and other product categories. Strong support of leading retailers, coupled with greater consumer awareness of the need and utility of retail product protection plans, continues to drive demand for retail product protection solutions.
A recent analysis from Frost & Sullivan, Retail Product Protection Plans in the United States: A Market and Competitive Overview, presents an overview of the retail product protection plan market in the United States. The insight analyzes the key elements of advanced retail product protection plans and outlines the benefits for both consumers and retailers. Additionally, Frost & Sullivan evaluates the industry's most progressive retail product protection products from market leading providers.
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"Issues with electronics or appliances requiring repairs or replacement are prevalent in today's marketplace; our research indicates that roughly 1 in 5 retail customers that purchase an electronics device or a major appliance are likely to have a problem with the product within the first 12 months," said Brent Iadarola, Frost & Sullivan Research Director. "Protection plans provide a defined path for consumers to resolve their product issues by receiving assistance to repair or replace the covered product."
Initially positioned as a value-added service (VAS), retail product protection plans have evolved as integral tools for retailers to enhance customer loyalty and generate incremental category sales. Consumers are attracted by the multiple benefits protection plans have to offer such as single source solution, quality care, and protection from unexpected costs. Hence, a well-structured retail product protection plan can help retailers improve customer satisfaction, increase store visits and ultimately revenue.
The emergence of 'connected' consumer electronics and appliances has also materialized as an important growth driver for the retail product protection industry. As products become 'smarter', post-sales technical support will be crucial to help customers troubleshoot device issues, reduce product returns, and optimize the overall customer experience.
Retailers should seek providers with progressive roadmaps that offer integrated and complete solutions to ensure a seamless customer experience. Furthermore, retailers should consider parameters such as product capabilities, customer support and service innovation, sales enablement and marketing capabilities, when selecting a retail product protection partner.
"While on the surface all product protection plans seem very much alike, they are clear differentiators when it comes to servicing customers," noted Iadarola. "Retailers are encouraged to conduct a detailed analysis of the various retail product protection providers in order to select the right partner to help meet their growth objectives."
Retail Product Protection Plans in the United States: A Market and Competitive Review is part of the Mobile & Wireless Communications (http://www.wireless.frost.com) Growth Partnership Service Program. Frost & Sullivan's related studies include: Next Generation Mobile Protection Market Insight, An Insight into the U.S. Mobile Device Logistics Markets; Mobile Handset Protection, A Win-Win for Carriers and Consumers. All research included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Retail Product Protection Plans in the United States: A Market and Competitive Overview
Corporate Communications – North America