The Future of the Service Contract Industry
With 2015 nearly here, it’s a great time to look at the trends shaping the service contract business. The future of service contracts is strong, but will require change and adaptability.
Service contract sales continue to be driven by the needs of consumers. Those needs are being influenced by product innovation, new distribution channels, service-model changes and globalization. These changes are more than slight modifications; they are fundamental change.
One major trend in consumer electronics is the converging of multiple products into a single mobile device. Instead of, for example, buying a PC, a radio, a video camera and a personal camera, consumers are purchasing smartphones that perform all of these functions, and with high quality. We expect this convergence to continue, and adapting to the change is important. The outlook for non-technology products is still stable. Auto, major appliances, HVAC/R, and lawn and garden are not converging, but are being sold through different channels. New channels require a new look at the purchase touchpoints. People are shopping online, through mobile devices, and that’s where extended warranty solicitations must be positioned.