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GROWTH CLIMATE?
Listed under: Comments
Published: Friday, January 29, 2010
Last year will go down in most retailers’ notebooks as a real annus horriblis.
But while sales volume and value nose-dived in almost every sector of electronic hardware, warranties at retail point of sale fared well in the otherwise turbulent retail environment. In fact, one could say they fared well because of the turbulent markets.
On the negative side, reducing sales volumes of TVs, camcorders and PCs meant less potential warranty customers coming through the door. Thankfully, this decline was balanced out, and in many retail stores actually overcome and improved upon, by increased conversion rates. While fewer people are buying expensive electronic goods, those that do are more likely to purchase a repair plan. So why is this?
peace of mind
Firstly, many of today’s customers looking to buy major electronic goods are doing so out of distress purchase. Perhaps the family are without a main TV, the kids need a new PC for school work before term starts, or the old camcorder has failed just before a holiday. In these cases, the customer is far more likely to buy into the future peace of mind, both emotional and financial, that a warranty can offer.
The second major reason for increased conversion rates is the economic climate itself. Whether customers are making new, distress or upgrade purchases, the uncertain outlook means that they will have a weather-eye on the future and the longevity of their purchase. Again, this makes the customer much more responsive to the benefits of a three- or five-year repair plan, particularly if it doesn’t add cost to the purchase price today. D&G’s 10-month payment terms and ongoing pay-monthly plans have seen exponential growth in the last 12 months as customers want the benefits of a warranty without adding more to their credit card on the day.
an added extra
The third and perhaps most pertinent reason for the increase in warranty sales conversions is the actions of the retailers themselves. With reduced turnover, incremental sales like warranties are a vital ingredient to keep retail shops on the high street alive. Moreover, the reduced footfall means retail staff have longer to work on their sales pitch to the customer. D&G’s warranty sales training programme has seen unprecedented demand in the last 12 months from retailers looking to make profitable warranty sales a major part of their business.
The take-home message from 2009 and the continued tough market dynamics is that warranties will play an ever more important role in the high street marketing mix throughout 2010. If you are not adding warranty sales revenue and the longer term customer relations benefits to your business already, why not call D&G now.
For further information contact:
+44 (0)844 481 0113
www.domgen.com
Lee Miller, pictured, is Director of Retail Sales at Domestic & General.
On the negative side, reducing sales volumes of TVs, camcorders and PCs meant less potential warranty customers coming through the door. Thankfully, this decline was balanced out, and in many retail stores actually overcome and improved upon, by increased conversion rates. While fewer people are buying expensive electronic goods, those that do are more likely to purchase a repair plan. So why is this?
peace of mind
Firstly, many of today’s customers looking to buy major electronic goods are doing so out of distress purchase. Perhaps the family are without a main TV, the kids need a new PC for school work before term starts, or the old camcorder has failed just before a holiday. In these cases, the customer is far more likely to buy into the future peace of mind, both emotional and financial, that a warranty can offer.
The second major reason for increased conversion rates is the economic climate itself. Whether customers are making new, distress or upgrade purchases, the uncertain outlook means that they will have a weather-eye on the future and the longevity of their purchase. Again, this makes the customer much more responsive to the benefits of a three- or five-year repair plan, particularly if it doesn’t add cost to the purchase price today. D&G’s 10-month payment terms and ongoing pay-monthly plans have seen exponential growth in the last 12 months as customers want the benefits of a warranty without adding more to their credit card on the day.
an added extra
The third and perhaps most pertinent reason for the increase in warranty sales conversions is the actions of the retailers themselves. With reduced turnover, incremental sales like warranties are a vital ingredient to keep retail shops on the high street alive. Moreover, the reduced footfall means retail staff have longer to work on their sales pitch to the customer. D&G’s warranty sales training programme has seen unprecedented demand in the last 12 months from retailers looking to make profitable warranty sales a major part of their business.
The take-home message from 2009 and the continued tough market dynamics is that warranties will play an ever more important role in the high street marketing mix throughout 2010. If you are not adding warranty sales revenue and the longer term customer relations benefits to your business already, why not call D&G now.
For further information contact:
+44 (0)844 481 0113
www.domgen.com
Lee Miller, pictured, is Director of Retail Sales at Domestic & General.
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