Warrantech’s Fourth-Quarter Forecast

By: Global Administrator

September 26, 2013

Sean Stapleton, Warrantech President and CEO, recently took part in an executive forum with TWICE Magazine. Here’s what he had to say about the current state of service contracts and what consumers and retailers can look forward to in the closing months of 2013.

What is your fourth-quarter outlook for consumer electronics and appliance sales?

Despite recent reports regarding declines in consumer confidence, we are cautiously optimistic about product sales growth in the fourth quarter. We continue to see the mobile device category outperforming expectations. Further, recent improvements to the housing market have aided appliance sales for many of our partners.

Our belief is that consumers have prolonged many new product purchases due to uncertainty about the economy; with so much pent-up demand it is a matter of time before we see a flurry of consumer spending on new products.

Do you anticipate any change in historic Q4 attachment rates?

During the recession we witnessed increased attachment rates for extended service contracts due to a greater focus by retailers. The lesson learned by many retailers during those challenging times was that well-managed extended service contract programs increase customer satisfaction and retention, in addition to providing revenue. We believe the trend will continue on into the fourth quarter and beyond.

Which electronics/appliance categories show the most promise for service contract sales in the fourth quarter?

The mobile device market continues to lead the other categories with regard to growth. During the upcoming holiday season we expect to see further growth of the category due to continued demand by consumers for these devices. Additionally, we are seeing a very interesting growth trend for audio equipment including high-end headphones, soundbars and portable speakers. Consequently, we anticipate that service contract sales for the mobile electronics and audio equipment categories will be strong.

Will the new generation of Ultra HD and OLED TVs have an impact on TV sales and attachment rates this holiday season?

The new TV technologies are expected to provide some improvement to sales. However, unless strong marketing campaigns are unveiled by manufacturers and retailers detailing the overall improvements to the consumer’s viewing experience, growth will be limited. The trend toward higher sales of smart TVs does provide us with good reason to be excited about Ultra HDTV and OLED TV sales in the future.

We anticipate higher attachment rates for Ultra HDTVs and OLED TVs due to consumers’ concerns regarding product performance for these new technologies.

What are you doing to help retailers increase attachment rates for online purchases?

We continually share best practices with our partners regarding optimizing online extended service contract programs, including guidance on messaging, content placement and the importance of missed point of sale solutions.

Our collective experience is that online programs, while very different in many regards to traditional retail programs, share a common trait for success with their brick-and-mortar counterparts. The most successful retail programs are based on earning trust with customers during the product sale and establishing the importance of the extended service contract during and after the sales process.

How are you addressing mobile commerce?

We continue to provide a strong online service platform for our partner programs in addition to other online tools. Our goal is to allow customers to interact with us on their terms, whether it be through social media, web chat, our dynamic online claim adjudication tool or over the phone. Additionally, our solutions are designed for rapid integration with online programs.

What new products or services have you introduced for retailers or consumers?

We are excited to unveil our newest service innovation which is designed to give online shoppers white glove assistance services and information regarding their recent purchase and can be used as a platform to make extended service contracts available to the customer.

Visit our blog frequently to keep up with the latest industry news and company updates. And make sure to bookmark warrantech.com so you can learn more about our innovative products and services.

Filed Under: consumer, contracts, devices, electronics, HD, mobile, OLED, service, TV, TWICE, Ultra

Report Shows That Vehicle Service Contracts Are More Important Than Ever

By: Global Administrator

September 16, 2013

According to a recent report by R.L. Polk & Co., the average age of passenger cars and light trucks on the road right now stands at a record high of 11.4 years. This makes ownership of a vehicle service contract even more important as repair costs rise with older vehicles.

“Service contracts provide peace of mind for owners who keep their cars longer,” said Timothy Meenan, Service Contract Industry Council (SCIC) executive director. “Expensive breakdowns always seem to happen right after a car loses its manufacturer’s warranty protection, so extended service contracts can provide more years of worry-free driving.”

Data from Polk, which keeps track of registration data from the nation’s state motor vehicle departments, shows that the number of older vehicles on the road has increased over the years. In 2002, the average age of the U.S. car and light-truck fleet was 9.6 and the steady upward trend is expected to continue.

Average Age of Passenger Cars and Light Trucks


Year

Passenger Cars

Light Trucks

Total Light Vehicles

2002

9.8

9.4

9.6

2003

9.9

9.5

9.7

2004

10.0

9.5

9.8

2005

10.1

9.5

9.8

2006

10.2

9.5

9.9

2007

10.3

9.6

10.0

2008

10.4

9.8

10.1

2009

10.5

10.1

10.3

2010

10.8

10.5

10.6

2011

11.1

10.8

10.9

2012

11.3

11.1

11.2

2013

11.4

11.3

11.4

“Most of us want to do everything we can to hang onto our cars as long as possible, but the rising cost of repairs makes this increasingly difficult,” said Meenan. “The upkeep of an older car can get expensive quickly, but extended coverage through a service contract helps keep a car running longer without so many pricey repair bills.”

Visit warrantech.com to learn more about the various vehicle service contracts that are available to you.

Filed Under: contracts, service, Vehicle