Page 1
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 1
Warranty Metrics:Consumer Approaches to Extended Warranties for White,
Brown and Grey Goods in Selected Global Markets
Series Prospectus
November 2017
Page 2
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 2
Prospectus contents
What is the research?
Which titles are available?
What is the rationale?
What methodology has been used?
For which retailers are take-up rates split out?
What is the report structure?
What are the key features of the research?
How can the research be used?
Who can use the research?
What are some of the key findings?
What is the cost and format?
How can the research be purchased?
3-4
5
6
7
8-9
10
11
12
13
14-17
18
19
Page
Page 3
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 3
What is the research?
Finaccord’s Warranty Metrics series of reports offers unique, detailed insights into the behaviour of
consumers regarding extended warranties for white, brown and grey goods.
Based on a primary survey of consumers in Australia, Brazil, Canada, China, France, Germany,
Italy, Spain, the UK and the US carried out the second and third quarters of 2017, the research
provides valuable data concerning the extent to which they take out extended warranties with
desktop computers / printers / scanners, dishwashers, fridges / freezers, games consoles, hi-fi /
audio systems / digital radios, set-top boxes plus Blue-ray / DVD players, TVs and washing
machines with data shown separately for each of these eight types of product as well as for each of
the three broader categories of white, brown and grey goods.
Extended warranty take-up rates for these categories are also analysed by gender, age and annual
household income of respondent as well as by the channel used to acquire the underlying product,
differentiating between in-store and remote (mainly online) purchases, and according to the price
band of the underlying product. They are additionally shown for major retail chains covered by the
research in each country as well as for respondents buying through other national chains, other
online-only retailers and local (independent) shops.
continued overleaf
Page 4
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 4
What is the research? (continued)
The investigation also analyses which risks are covered by these warranties (i.e. breakdown only or
also cover for accidental damage and / or theft), whether consumers purchased a warranty for a
specific consumer product or a multi-appliance warranty, which distribution channel and interface
they used to take out the extended warranty (including the split between retailers, manufacturers
and other independent providers), whether they bought an extended warranty at the same time as
the underlying consumer product or at a later point, and whether they acquire an extended warranty
as a result of any particular prompt (e.g. a face-to-face or phone conversation with a sales
representative or web chat).
Finally, the reports analyse claims frequency for extended warranties split between white, brown
and grey goods, as well as between stand-alone and generic cover packaged with banking
products, also showing the claims refusal rate (i.e. the percentage of all claims that were reportedly
turned down).
Page 5
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 5
Which titles are available?
The Warranty Metrics series is composed of nine separate publications:
• an overview study providing comparisons for the metrics gathered across all ten countries as well
as the results for each country;
• ten country-specific titles providing the results for the investigation into extended warranties for
white, brown and grey goods for a single country
The titles of these reports are:
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Selected Global Markets
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Australia
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Brazil
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Canada
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in China
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in France
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Germany
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Italy
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Spain
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in the UK
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in the USA
Page 6
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 6
What is the rationale?
Finaccord has developed its Warranty Metrics series in order to fill the gap for reliable data
concerning consumer behaviour in the evolving market for extended warranties for white, brown
and grey goods. There is little published information providing detailed insights into consumer
approaches to extended warranties in spite of the facts that many households acquire at least one
qualifying consumer product each year and that extended warranty schemes are now run by a
majority of manufacturers and retailers of white, brown and grey goods.
The market for extended warranties is of fundamental importance both to manufacturers and
retailers of consumer products and the warranty providers with which they work. In fact, maximising
the results from extended warranty programs offers the potential for manufacturers and retailers of
white, brown and grey goods to enhance significantly the margins that they achieve from the
underlying consumer products. Meanwhile, administrators, brokers and underwriters can potentially
benefit from robust growth and attractive underwriting returns from this type of policy.
As such, the titles in the Warranty Metrics series are designed to allow manufacturers, retailers,
warranty providers and other actual or potential distributors, such as banks, to benchmark their
performance in this arena and identify opportunities for growth.
Page 7
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 7
What methodology has been used?
The research for this study, which covers over 12,000 consumers across ten countries, was carried
out the second and third quarters of 2017 using the online consumer research panel of mo’web
research (www.mowebresearch.com). 1,000 or more respondents were surveyed in each of
Australia, Canada, France, Germany, Italy, Spain and the UK, over 1,500 in Brazil, and around
2,000 in each of China and the US. In all cases, quotas were set in order to ensure representative
survey samples by gender, age, annual household income and geographical location of
respondents. The specific composition of each country sample can be obtained from Finaccord if
required.
Note that for Australia, Canada, France, Germany, Italy, Spain, the UK and the US, it is possible to
compare the latest results with previous research carried out in 2014.
Page 8
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 8
For which retailers are take-up rates split out?
AUSTRALIA
AppliancesOnline.com.au
Big W
Bing Lee
Dick Smith
Harvey Norman
JB Hi-Fi
Kogan
Officeworks
The Good Guys
Note 1: take-up rates are for one or more of extended warranties for white, brown and grey goods, depending upon the organisation in question.
Note 2: take-up rates are also given in aggregate for each of a) other national chains, b) other online-only retailers, and c) local (independent)
retailers.
BRAZIL
americanas.com
Casas Bahia
Extra
Fast Shop
Kabum
Magazine Luiza
Pontofrio
Ricardo Eletro
Saraiva
shoptime.com
submarino.com
Walmart
CANADA
Amazon
Best Buy
Costco
Hudson's Bay
Leon’s / The Brick
London Drugs
Lowe’s
Newegg
Sears
The Home Depot
The Source
Walmart
CHINA
51buy.com
Amazon
Black Swan Electronics
Dangdang
Dashang
GOME Electrical
Appliances
JD.com
Jintaiyang Electronics
New Mart
Suning
Tmall
Yihaodian
FRANCE
Amazon
Auchan
Boulanger
But
Carrefour / Rue du Commerce
Cdiscount
Conforama
Darty / Mister Good Deal
Electrodépôt
Fnac
GrosBill
Leroy Merlin
Magasin-u
Pixmania
Price Minister
Ubaldi
Vente du Diable.com
Page 9
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 9
For which retailers are take-up rates split out? (cont.)
GERMANY
Amazon
Conrad
Euronics
Expert
Handelshof
Heine / Otto / Quelle / Schwab
Hornbach
Lidl
MediaMarkt / redcoon / Saturn
Real
ITALY
Amazon
Comet
ePrice
Euronics
Expert
Media World
Mercatone Uno
Pixmania
TRONY
Unieuro
UK
Amazon
ao.com
Appliances Direct
Argos
BrightHouse
Currys / PC World
John Lewis
Littlewoods / Very
Tesco
SPAIN
Amazon
Carrefour
Conforama
El Corte Inglés / Hipercor
Euronics
Expert
MediaMarkt / Saturn
Miró
Tien 21
USA
Amazon
Best Buy
Costco
Kohl’s
Newegg
Sears
Staples
Target
The Home Depot
Walmart
Note 1: take-up rates are for one or more of extended warranties for white, brown and grey goods, depending upon the organisation in question.
Note 2: take-up rates are also given in aggregate for each of a) other national chains, b) other online-only retailers, and c) local (independent)
retailers.
Page 10
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 10
What is the report structure (for the overview report)?
0. Executive Summary: providing a concise evaluation of the principal findings of the report.
1. Introduction: offering rationale.
2. Overview: averaged across all ten countries, and with data split out for each of those countries, this chapter begins
with analyses of the white, brown and grey goods acquired by consumers segmented by type of item, purchase
interface and product price band, as well as by age, income and gender of respondent, before then examining take-
up rates for extended warranty cover segmented by the same variables. It then provides data for the distribution
channels (i.e. manufacturer, retailer, independent) and interfaces (i.e. in-store, remote) used by consumers to take
out extended warranties for white, brown and grey goods, and investigates the type of extended warranty cover held
by respondents (i.e. breakdown only for a specific item, breakdown plus accidental damage and / or theft for a
specific item, multi-appliance) plus the point in time at which the policy was bought (i.e. at the point of sale or either
before or after). Finally, it analyses prompts that persuade customers to acquire extended warranties and examines
annual claims frequency and refusal rates for extended warranties.
3. Australia: this chapter presents similar information as described above exclusively as it pertains to consumer
approaches to extended warranties for white, brown and grey goods in Australia plus additional data illustrating the
share of sales of major retailers of each of white, brown and grey goods plus their extended warranty take-up rates
as measured by the survey.
4 – 12. Brazil, Canada, China, France, Germany, Italy, Spain, the UK and the US (all contents as for Australia).
13. Appendix: including a full transcript of the online survey used to research this subject.
Page 11
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 11
What are the key features of the research?
Key features of the reports in this series include:
• reliable benchmarking of the proportion of consumers buying consumer electrical products
remotely (mainly online) as opposed to in a physical shop or store;
• unique analyses showing the percentage of buyers of consumer electrical products that take out
extended warranties in each country, adjusted for whether they were offered an extended warranty
in the first place, and how this penetration rate varies by gender, age and annual household income
as well as by type and price band of product, and the distribution channel used to buy the product;
• accurate data describing the percentage of consumers in possession of extended warranty cover
through a policy bundled with a payment card or bank account, or through a multi-appliance
warranty covering more than one consumer product;
• robust statistics illustrating the proportion of customers that acquire extended warranty cover
without any particular prompt and those that do so as a result of a specific prompt (e.g. an advert
received by e-mail or SMS);
• valuable insights into claims frequency rates split by category of consumer product and according
to whether the claim was accepted or refused.
Page 12
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 12
How can the research be used?
You may be able to use the reports in this series in one or more of the following ways:
• benchmark your organisation’s performance in the extended warranty sector: are your cross-selling
rates in line with the market averages described in this study?
• appreciate the potential for increasing the penetration of extended warranties through packaging
with banking products or marketing multi-appliance warranties;
• evaluate the opportunities for distributing extended warranties through means other than the
outlets selling the underlying electronic products - to what extent will consumers buy through
alternative channels and interfaces?
• assess the prospects for retrospective marketing and re-solicitation programs - how many
consumers take out extended warranties after they have bought the underlying electronic product
and how long do they wait?
• understand claims experience for extended warranties, how this varies by type of customer and
what this might mean for the way in which your organisation underwrites or distributes this type of
policy.
Page 13
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 13
Who can use the research?
1. Administrators, brokers and underwriters of extended warranties: firms with an interest in
extended warranties for white, brown and grey goods will be able to arrive at a detailed
understanding of the dynamics of this under-researched market which can be used when
negotiating new distribution partnerships;
2. Manufacturers and retailers of white, brown and grey goods: manufacturers and retailers will
benefit from this research by appreciating how their performance in the extended warranty
sector compares to the wider market averages and, if they do not have an extended warranty
program, whether they should consider doing so;
3. Banks and credit card issuers: the results of the research underline the reality that there are
opportunities to develop affinity programs for extended warranties through new channels –
does this represent a viable option for your organisation?
4. Management consultancies: are you helping an entity with an interest in the extended warranty
sector to improve its performance in extended warranties in any of the ten countries in
question? If so, this research will provide you with unique insights into consumer behaviour in
these markets.
Page 14
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 14
What are some of the key findings?
Source: Finaccord Warranty Metrics Survey
1) Averaged across the ten countries, TVs are the item most commonly bought by
respondents in the last three years and set-top boxes the least often purchased
0% 10% 20% 30% 40% 50%
Dishwasher
Fridge / freezer
Washing machine
Hi-fi / audio system or digital radio
Set-top box or Blu-ray / DVD player
TV
Desktop computer, printer or scanner
Gaming console 18.7%
37.7%
17.7%
10.0%
35.6%
31.5%
15.7%
48.2%
Page 15
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 15
What are some of the key findings? (cont.)
Source: Finaccord Warranty Metrics Survey
At the same time or before purchase
Within one month
Between one month and one year
More than one year after purchase
0% 20% 40% 60% 80% 100%
2) Consumers in China are the most likely to buy an extended warranty
retrospectively although the vast majority of sales in all countries continue
to occur at the same time as purchase of the underlying product
Australia
Brazil
Canada
China
France
Germany
Italy
Spain
UK
US
Unweighted average
Page 16
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 16
What are some of the key findings? (cont.)
Source: Finaccord Warranty Metrics Survey
3) In Brazil, well over a half of acquisitions of extended
warranties take place as a result of some kind of prompt
Proactively, without any particular
prompt, 41.1%
Face-to-face or phone
conversation, 16.8%
Part of online system for buying the
product, 15.4%
Web chat, 3.0%
Directed to a web page after
buying the product, 7.1%
Email advertisment,
1.9%
Postal offer, 1.5%
SMS text message, 1.1%
Other kind of advertisement,
2.7%
Other prompt, 9.4%
Page 17
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 17
What are some of the key findings? (cont.)
Key findings from executive summaries in this series include:
• looking at the take-up rates for stand-alone extended warranties for each type and category of
consumer electrical product (as opposed to generic cover packaged with a banking product), a
weighted average of 26.7% was recorded across all products and countries;
• in Australia, across all respondents with extended warranties, 68.3% believed they had cover for
mechanical or technical breakdown only, while 23.8% reported holding cover for multiple risks
including breakdown and either or both of accidental damage and theft, and a further 8.0%
reportedly held cover through a multi-appliance warranty;
• in France, 67.1% of respondents with extended warranties cited the retailer of the goods as the
source of their cover while 28.5% named the manufacturer and 4.3% claimed to have purchased
cover from an independent source;
• in Spain, respondents purchasing white, brown or grey goods in a shop were somewhat more
likely to acquire extended warranties than those purchasing through remote means (mainly online),
with the face-to-face take-up rate at 27.1%, compared to 22.7% for remote means.
Page 18
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 18
What is the cost and format?
18
All of the reports in the Warranty Metrics series are available as standard PDF documents and Excel
data annexes. Costs for the various titles in the series and for selected other international consumer
research studies released in 2017 are as follows:
REPORT COST *
USD 8,395
USD 1,395
USD 1,395
USD 1,395
USD 1,395
USD 1,395
USD 1,395
USD 1,395
USD 1,395
USD 1,395
USD 1,395
* GST at the prevailing rate will be added to the basic price for Singapore-based buyers except for where the request is for hard
copy only. Costs quoted are for a single office, single country licence only. For corporate user licence options, please see the next
slide for further details. Invoices can be paid in EUR or GBP, at the prevailing exchange rate, if preferred.
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Selected Global Markets
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Australia
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Brazil
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Canada
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in China
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in France
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Germany
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Italy
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in Spain
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in the UK
Warranty Metrics: Consumer Approaches to Extended Warranties for White, Brown and Grey Goods in the USA
Page 19
Warranty Metrics: Consumer Approaches to Extended Warranties in Selected Global Markets
Web: www.finaccord.com. E-mail: [email protected] © Finaccord, 2017 19
How can the research be purchased?
Simple. Just go to the relevant area of the Finaccord website, create your account (if you do not
have one already) and place your order online. Products paid for online by card will be delivered
immediately by e-mail but please allow up to one working day for delivery by e-mail if you choose to
pay on receipt of invoice.
With regards to the corporate user licence, you will be asked to choose one of the following options:
1. One office, one country: no supplement over and above basic cost of reports ordered
2. Multiple offices, one country: additional 20% over and above basic cost of reports ordered
3. Multiple offices, two to ten countries: additional 50% over and above basic cost of reports ordered
4. Global (unlimited offices in unlimited countries): additional 100% over and above basic cost of reports ordered
Alternatively, you can place an order by sending your request to [email protected] , clearly
stating the product(s) required, associated price(s) and billing details for eventual invoice or card
payment receipt.