Protection plan revenue and attach rates rise in Q4, internal data shows
With a potential recession looming, some merchants are worried that consumer spending won’t grow on pace with last year’s 16.1% growth.
In fact, Armando Roggio of Practical Ecommerce predicts that overall retail growth this year will be slower.
“This Christmas season, I predict overall retail sales in the US will grow about 3.5%,” he says — “less than the annual US inflation rate.”
Whether growth slows or consumer spending comes roaring back, product protection may be your secret weapon to maximizing value this holiday season.
We looked at select data from merchants who went live with Extend in Q3 2021 to determine the impact of seasonal holiday shopping on their revenue from selling protection plans.
The results were clear: if you wait until next year to get started, you’re leaving a lot of money on the table.
Protection plan sales increase over the holiday season just like your product sales do. Merchants earned, on average, 23% more revenue from protection plans in Q4 2021 than they did in Q1 2022.
From looking at our internal data, we saw an increase in attach rate for merchants in Q4 2021 over Q1 2022. The average attach rate was 20% higher in Q4.
One thing that stood out about the data from our furniture merchants specifically is that there’s a consistently healthy spike in November, from number of products sold to overall revenue and more.
Our furniture merchants saw that November revenue from protection plan sales was 38% higher than the average of months across Q4 and Q1. One merchant saw that increase rise as high as 76%.
“Partnering with Extend was a no-brainer for us. Consumers can sometimes be hesitant to purchase big-ticket items online, so product protection is ideal for offering peace of mind to our shoppers,” says Steve Catanzaro, Vice President of Ecommerce at Bear.
There’s still plenty of time to take advantage of Extend’s product protection offering before your holiday code freeze. If these merchants had decided to postpone their go-live date, they could have left hundreds of thousands of dollars combined on the table!
“Extend is ambitious and, after listening to our business needs, explained clearly what they could do for us and demonstrated a true understanding of our industry and, importantly, our customers,” says Steve Ryan, Managing Director-DTC at Resident.
“There are a lot of options on the market, but Extend is the provider that knows best how to deliver solid product protection to your customers,” says Ryan.
Extend makes it easy with full integration support; most merchants can be up and running in just weeks. If you are a BigCommerce or Shopify customer, it’s even easier. Just download our app and our team will take care of the rest.
Make the most of your holiday season. Schedule your demo now.