Home CE Retail How the New Normal Has Shaped Warranty Sales

How the New Normal Has Shaped Warranty Sales

Warranty Sales COVID

Dealerscope’s collection of warranty executive comments this month center around each company’s strategies for 2021 in answer to the challenges and changing market dynamics presented by the ongoing pandemic. Respondents addressed the following:

Dealerscope: In what major ways has the pandemic – which has influenced consumer behaviors and purchasing patterns as they relate to consumer technology products – influenced warranty sales at the CE and appliance dealers you do business with in 2021? What are you emphasizing in your offerings to dealers that they can use to effectively make the case for warranty purchases to consumers?


James Mostofi, Global Head of Business Development, Warranty & Services Div.

The pandemic significantly impacted the way we work and attend school. This migration to working at home and virtual schooling drove increased sales of home computing, home networking, home furnishings, home appliances, and the need to protect them. At the same time, sales of products shifted from in-store to online. AIG’s first emphasis was to ensure that our clients’ online purchase path was well marketed, well displayed, and easy to execute, to ensure customer awareness of warranty products. We also modified our warranty product offerings to include emerging “IoT” needs like maintaining high-speed Wi-Fi connectivity, monitoring cyber intrusions and enhancing the protection of confidential information.

Allstate Protection Plans

Karl Wiley, President and CEO

With the increase of people working and learning from home during the pandemic, there has been a corresponding increase in demand for products like electronics and appliances. Given the added importance of these items to our everyday lives, demand for protection plans has surged. We’ve also seen consumers gravitate towards brands they trust, like Allstate — another reason our purchase frequency has increased.

Over the past year, we’ve focused on the safety and support of our customers, employees and partners. This includes COVID-19 safe repair and replacement options, as well as remote tech support and troubleshooting. Our ability to deliver in-home repairs quickly, typically in one visit, has also been important for our partners — as getting their customers’ appliances and TVs fixed fast has been critical.

Arch Insurance Group

Brian J. Olson, VP of Sales, Arch Warranty and Lender Solutions (AWLS)

I believe the pandemic has caused some in the consumer electronics and appliance space to react the way automotive OEMs and dealers responded coming out of the 2008 financial crisis.  

During that time, just like today, declining consumer confidence and margin erosion were driving forces. To combat this, there was a renewed focus on protection plan and service contract design. This meant more coverage options, more consumer-friendly terms, and the mindset of presenting protection options 100% of the time to 100% of customers.  Protection plans became a true profit center.

We are new to the consumer space, but we have lived this before. As a pure underwriting partner, Arch delivers the resources needed to help our partner clients execute on their protection plan strategies.


Jeff Unterreiner, President, US Connected Living

The customer experience has never been more vital than it has been during the pandemic. As social distancing and safety precautions altered the in-store shopping and purchase habits of many consumers it became clear that CE and appliance companies had to leverage digital self-service tools to give customers options, meeting people where they are most comfortable. The ability for customers to easily contact warranty services and get a quick, convenient resolution will be vital to driving warranty sales and ensuring customer loyalty in 2021. It’s also important to offer a friendly, empathetic voice in challenging times. Many customers continue to let us know that they appreciate the compassionate service.


Rob DiRocco, Senior VP of Client Services and Sales

The pandemic has made people keenly aware of the important role their home tech and appliances play in keeping them connected and their daily life running smoothly. Now more than ever, customers value the ability to get a fast repair, replacement and support.

We’re helping clients deliver this for their customers. We’ve expanded our network of fast, local repair options through over 600 uBreakiFix locations. We’ve also expanded our same-day, come-to-you device repair and replacement to quickly help customers without them having to leave the safety or convenience of home. Finally, we’ve launched with several clients, Asurion Home+, the industry’s first extended warranty product that not only covers all of the customer’s most important home tech in one program but also provides unlimited support services. 


Chris Penn, Vice President, Client Services

As product purchasing has shifted more towards online, we continue to work with our partners on optimizing their protection plan offerings via digital methods.

We are not specifically focusing on different messaging that explains the benefits of a service contract, rather we are focusing on alternate methods that simulate more of a face-to-face interaction so we can help drive similar attachment rates as we’ve traditionally seen in-store. This includes the incorporation of detailed pop-ups offerings, comprehensive product protection landing pages, and videos that educate the consumer on the benefits of the protection plan they are being offered. In addition, the rise in BOPIS (Buy Online, Pickup In Store) has provided another consumer touchpoint for us to offer protection plans.


Brandon Gell, CEO & Co-Founder

The migration from in-person to online sales was universally expected, but 2020 accelerated that process. eCommerce sales just experienced its largest year-over-year increase of all-time, and at Clyde we’ve observed a noticeable increase in consumer electronics spending as well as an uptick in kitchen appliances sales. As impressive as eCommerce sales figures have been, warranty attachment rates through our platform have even outpaced that rapid growth. We tracked a doubling of warranty attachment rates for appliances and a 60% increase for consumer electronics. To encourage sustained growth, we’ve emphasized clear, customizable calls-to-action and a fast, easy claims experience and work with all of our partners to maximize the effectiveness of their checkout process.


Woodrow H. Levin, CEO

As a result of the pandemic, eCommerce sales grew to over 16% of all retail sales in the past 10 months. Merchants were forced to devote even more resources to providing customers with the options they wanted to see when shopping online. Adding product protection during the checkout process is a growing trend which follows the success of the Buy Now Pay Later plug-in.

Offering customers product protection drives incremental revenue, and gives customers greater peace of mind, which results in higher product purchase conversion rates sitewide. In the last year, we saw the integration of our extended warranty platform prioritized by merchants because Extend’s API-first solution is easy to integrate, and costs merchants nothing to implement. Similarly, we also saw a significant uptick in our protection plan attach rates – more customers are buying extended warranties due to the increased uncertainty in the world around us. 


Leigh Mascherin, VP of Warranty Sales & Account Management

We saw an overall increase in the sale of electronics and appliances as a result of the pandemic. This was to be expected with stimulus checks and people spending more time at home. What we didn’t expect was the increase in attachment rates. The pandemic, political unrest and economic uncertainty caused elevated anxiety levels for consumers. Extended service contracts are one way shoppers can reduce the uncertainty or risk related to a major purchase. The other important lesson we learned about warranty solutions going into 2021 is that in times of crisis people seek simplicity, especially when making purchasing decisions. In 2021, we are recommending simplified pricing structures and straightforward terms.

Mack Worldwide Warranty

Jennifer Monasterio, President

We now live in a world that has forgone dramatic changes for everyone. Due to these changes, our lives will never be the same. The retail market is no different. Of these changes, the biggest struggle that our retailers are facing is shipment delays and lack of inventory from manufacturers. Now, as we look into 2021, it is presumed that these shortages and interruptions will continue throughout the first half of the year. Therefore, the ability to enable our retail partners to optimize every sales opportunity is more essential than ever. Further, the overall success of our warranty program relies on customer satisfaction. As a result, we have decided to focus on discovering new ways to support all the product lines that our dealers carry in an effort to support their success during these trying times.

OnPoint Warranty Solutions LLC

Chris Smith, CEO

The pandemic has obviously impacted consumers, and our retail dealers as a result. However, the results were not quite as we expected. OnPoint has seen an increase in extended warranty sales through our dealer channels, both in consumer direct sales, and in commercial and educational sales. In this time of uncertainty when consumers have doubt about the future, extended warranties make sense, because they are all about risk avoidance, and protection from unexpected costs. Likewise, we’re seeing a huge jump in OEM contract sales. Consumers nested during the pandemic for obvious reasons, and all of those home projects translated to a spike in appliance, electronics, mobile device and computing sales. We’ve even seen a huge increase in furniture sales. Now we’ve all heard about the delays in shipments across the board. However, our warranty platform enables us to accommodate the shipment time, or shelf life, if you will, so that consumers are protected from the date of receipt.

One additional impact that we were really surprised by was the impact on out-of-warranty repair requests and service delivery. Not all consumers bought new. Those more severely impacted by COVID repaired rather than replaced products. So, OnPoint saw an increase on our on-demand repair services. Conversely, the service network seems to have been greatly impacted. There was simply more volume of repair requests, based on the rise in fix versus replace, but there were also delays in part shipments, which caused backlogs. Additionally, we saw a measurable percentage of technicians that were infected by COVID that negatively impacted service capacity, as well as an increase in consumer delays. Some consumers delayed service appointments because they were unwilling to allow a non-family member into their household.

What a wild ride this last year has been. However, OnPoint and our dealers, service providers and consumers have weathered it better than expected.

Personal Safeguards Group, LLC

Michael Frosch, President

PSG has long advocated for retailers and OEMs to take control of their service contract program from third-party providers. Great options exist to in-source customer care, product development and underwriting profit while outsourcing regulatory items to an existing licensed entity.

The pandemic rapidly advanced the movement to online shopping in the appliance and CE categories, requiring new engagement models, and the swift business shutdown dramatically impacted the customer experience as some third-party providers simply weren’t ready to serve your customers.  

Two important questions for retailers and OEMs:  Are you important to your current provider, and who better to take care of your customer – a third party, or you?


Michele Gloeckler, Vice President of Sales

In 2020, we went from a normal environment of business as usual to life in lockdown due to the pandemic.  During that time, we saw how quarantine changed businesses and consumer buying behavior forever. Non-essential businesses were forced to close temporarily, store hours and foot traffic were reduced, and manufacturers struggled to fill orders. This new remote life forced all businesses to either adapt or join the thousands that had no choice but to close their doors. 

Luckily, we safely and effectively began working remotely while taking this time to look at our products, our partners, and ourselves. Under the new leadership of Kevin Rupkey, we re-branded as ProtectAll™ and became laser focused on buying behaviors. By investing in consumer panels, we were able to target, critique, and expand our product offerings. 

These efforts were augmented with virtual trainings to teach not only about protection plans, but also, about new, contactless buying habits.  Even though consumers seemed to purchase fewer major products, they were more inclined to protect those purchases which drove sales. While quarantine might have driven this new culture, we chose to embrace it.  In our opinion, this has positioned both us and our partners in the forefront of 2021.