Consumers have become accustomed to being offered insurance coverage with their purchases of electronics, home appliances and other big-ticket items from brick-and-mortar retail locations. Insurance provides a financial fallback in case the purchases break or prove defective, saving consumers from wasting large portions of their hard-earned cash.
But what would consumers think about being offered insurance coverage for eCommerce purchases and how would it affect spending habits?
Recent PYMNTS research suggests that the idea may not be so far-fetched — and not just for electronics and home appliance purchases. We found that 60.1 percent of surveyed eCommerce shoppers say they would purchase insurance coverage for their online purchases if it were given the option by retailers at checkout, but only 41.3 percent were offered coverage the last time they shopped online.
This indicates a missed opportunity for eTailers, for whom insurance offerings could lead to improved customer service and higher revenues. The question is, what type of insurance should they offer?
This is only one of the questions PYMNTS sets out to answer in the Retail Product Insurance Study, in collaboration with Cover Genius. We surveyed more than 2,700 U.S. consumers about their latest eCommerce shopping experiences to find out whether they were offered insurance coverage at checkout, what type of coverage, for which types of items and whether they purchased the coverage.
According to our research, offering insurance coverage at checkout is an easy way for eTailers to entice consumers to buy and spend more online. We found that 32.7 percent of consumers would not only make more online purchases, but also spend more per purchase if they could buy insurance coverage at checkout.
Only a few eCommerce verticals commonly offer insurance at checkout, however. Consumers who bought their latest eCommerce purchases from electronics, travel and entertainment merchants were the only groups who are more likely than not to be offered coverage at checkout. Less than half of eCommerce shoppers looking to buy high-end clothing, auto parts and, surprisingly, even cars are given the option to insure their purchases.
So, in which of these verticals do we see the greatest growth opportunity for eCommerce insurance coverage? What type of insurance should eTailers in these verticals offer to maximize sales?
To find out the answers to these questions and more, download the report.