Tailored insurance: The secret weapon for online retail success
Online retail is a tough market. Sales might be growing strongly in North America, by 15% from 2017 to 2018, according to official figures. But a significant chunk of these goes to the large incumbents: Amazon accounted for 40% of the $517bn spent online with US retailers last year, for example. Add to this an increasingly tech-savvy and demanding consumer-base and you have a major challenge: how to get them spending in your online store, and keep on coming back.
The answer is to focus on the customer experience. Modern shoppers want seamless, engaging, omnichannel experiences that are trustworthy, unique and personalized. This is where tailored insurance can be the online retailer’s secret weapon.
An experience-based industry
There are many ways retailers are trying to advance the consumer experience to differentiate and grow. Payments are a key area. Friction-free, secure options will help your business stand-out, as well as support for digital platforms like Apple/Google Pay and new options like Affirm, Afterpay and PayPal Credit, which allow users to buy-now-pay-later. Returns can be another differentiator. Given how many consumers view this as one of the key barriers to hassle-free e-commerce, those offering multiple delivery slots, transparent updates and discounts for late delivery could find favor.
Yet it’s perhaps personalization that offers the most potential for online retailers to add value. The bad news is, consumers expectations are already sky high. Gone are the days when a simple email marketing message addressing the customer by name could impress. Today over three-quarters (76%) of consumers expect firms to understand their needs and expectations, while even more (84%) say “being treated like a person … is very important to winning their business,” according to Salesforce. But while an e-tailer’s understanding of the specific needs of a consumer will influence the loyalty of the vast majority (70%), what does this actually look like in practice?
From personal to hyper-personal
The answer lies with hyper-personalization, what Capgemini describes as an “advanced and real-time customization of offerings, content and customer experience at an individual level,” driven by big data to deliver “tailor-made solutions in real time.” There are already some notable online retailers doing this well. Amazon is the obvious one, using analytics to upsell and cross-sell via its “frequently bought together” feature and creating personalized homepages for individual users based on historical shopping behavior, shopping cart and other factors.
Another is online clothing retailer Stitch Fix, which uses answers to customer questions to select items for their consideration.Customers only pay for what they like, so over time, the firm is able to use returns info to tweak its algorithms and work out what works best: hyper-personalization in action.
THE VALUE OF INSURANCE
These examples are all around providing a more personalized experience in order to sell products core to the retailer’s business. But what about thinking outside of the box to embrace a new model: adding extra value by offering personalized insurance direct to the customer at point of payment? It might not seem like it, but in fact, insurance is a perfect fit for e-commerce. Just think about it. A customer decides to buy a new smartphone. Or some expensive china. Or a new bike. Imagine the value-add if you could offer shipping insurance, full product protection and extendable warranty cover as they buy?
Here’s where it gets even more personal. We’re not talking here about inflexible, one-size-fits-all policies but highly tailored experiences designed specifically for that customer, in their native language, preferred currency and screen of choice. Innovative insurtech platforms offer simple API-driven integration for seamless, friction-free purchase experiences on your site. Plus, deep integration into your data analytics back-end can help to generate more dynamic, personalized pricing for policies.
The customer experience is front-and-center, thanks to policies written in plain English, super-fast claims assessments and instant payments. Sound like the future? In fact, this is already possible today: in a service that combines customer-centric insurtech innovation with the industry backing of insurance underwriting partners. The bottom line is that modern retail customers are increasingly fickle. The old tactics of sales, discounts and loyalty programs matter less and less today. Instead, it’s all about the experience.
As Accenture argues : “retailers must be prepared to rethink what they do, taking advantage of their deep expertise to become trusted advisors for their customers and curators of truly meaningful consumer experiences.” By focusing on tailored insurance at point of payment from bleeding-edge providers, e-commerce firms can steal a lead on the competition and future-proof success amidst the ever-evolving needs of their customers.