Market Trends to Consider in 2013

By: Global Administrator

July 01, 2013

Consumer spending accounts for 70 percent of the U.S. economy. So it is understandable to think that in a sluggish market retail sales would be trending downward. However, despite actual product sales declining in 2012, more customers purchased extended service plans (ESPs) last year than in 2011.

A large reason for this trend is due to the fact that with tighter budgets, consumers are forced to make smarter decisions with their money. That means that instead of going on frivolous, spur-of-the-moment shopping sprees, purchases are now more carefully researched, thought out and viewed as long-term investments.

With this in mind, retailers were more focused on their ESP programs and receptive to initiatives that improved awareness, incorporated loyalty programs and improved website research and shopping capabilities for their customers. The result of these strategic endeavors helped play a big part in shaping the following industry trends:

  • The top products on which ESPs were sold included appliances, televisions, computing devices, audio/visual equipment and mobile devices
  • Attachment rates were up, particularly on big ticket items
  • Sales of ESPs on new tablets, ultrabooks and notebooks have observed strong growth and outpace the attachment rates of other products
  • Mobile phone ESPs have also observed significant growth, particularly for programs offering monthly payment options that provide for an effective competitive model relative to carriers
  • Furniture programs continue to gain volume as well

In addition to the aforementioned, Warrantech ESP offerings specifically had greater success thanks to a renewed focus on simplified terms and conditions. This made them more accessible/understandable for customers, compatible with OEM warranties and more comprehensive in coverage. Additional customer support was also viewed as a prominent factor in ESP growth as was product bundling, which allowed customers to customize and add multiple products under a single plan for even greater value.

During the next six months, we anticipate even more innovations in plans, stronger customer support solutions, and growth in ESP sales as 2013 is expected to be a much better year overall financially. Also, look for increased consumer confidence, coupled with stronger retail partnerships that focus on ESPs. Warrantech stands ready to deliver with our own dynamic ESP platform, which will collectively yield improved value for customers and more brand loyalty for our retail partners.

Filed Under: Extended, plans, service, Warrantech