It is becoming increasingly complex for online retailers to differentiate themselves from the competition. Products and core services can often be exchanged and replaced at will. In the past, this has often led retailers to position themselves with customers particularly through price. However, customers are now asking for much more than just cheap offers. According to study the IT service providers Arithnea and adesso even want all-round support. Defining your own USP only through products is hardly possible any more. So traders need sustainable strategies to prove themselves in the market.
Effectively strengthen customer focus: service as a competitive advantage
How extensive the services are determines the quality of the customer experience. That shows about the Study “Online shopping: This is how the customer wants the shopping process” by KPMG. For example, fast delivery is one of the most sought-after services of Generation Z. Almost a fifth of them would order more online if they could receive products two hours after ordering. Young people are even willing to pay a corresponding surcharge for this.
But which services are relevant for customers? In short: those who focus on the customer and his needs and are also close to the customer’s reality. What use are the most unusual services if the target group doesn’t use them or needs them at all? Today it is only the focus on the customer that counts: Customer Centricity.
Thinking ahead about additional services and recognizing customer needs
In order to exemplify customer focus, retailers should always carefully analyze and know the needs of their customers. Because not every service is well received by all customers. For retailers, this means, on the one hand, examining the usage behavior of existing services: Which services are used a lot? Which less? Are there differences between different customer groups? On the other hand, retailers should keep an eye on services that have hardly been on the agenda until now. Additional services must go beyond bonus programs. This is where insurance benefits come into play, for example. Not many dealers have the model on their radar yet. Being able to extend a warranty or protect against theft for a new smartphone with just one click in the checkout can, however, be a great addition to the product portfolio.
Insurance services in e-commerce
Today around 62 percent of German citizens use a smartphone. Access to mobile internet is standard. But when it comes to internet use, many customers feel unsafe, as the industry association Bitkom points out. The offer of an Internet protection letter in the checkout is therefore worthwhile for the customer and strengthens the trust in the retailer. The latter can also think outside the box and, for example, offer customers protection against cyber bullying. An additional service, which includes psychological help in such cases, not only helps affected families, but also actively positions the retailer as a helper beyond the product purchase. This can also strengthen customer loyalty. And of course the classic case of compensation or theft can also be a starting point for dealers.
Online retailers who want to offer additional services should rely on competent partners. The most important things about insurance benefits are not only customer proximity and reliability when shopping online. Insurance companies have to meet the individual needs of customers. On the other hand, they should be integrated into the shopping experience in such a way that customers perceive them as a service provided by the retailer – and not as additional insurance through external partners. Therefore, retailers should rely on white label solutions for supplementary insurance in e-commerce.
Insurance partners offer these dealers a contract, either as a fee model or on a commission basis. The additional insurance is integrated into the customer’s shopping experience as a further service. For this purpose, the entire advisory and application process is adapted to the requirements of the retailer. In the end, the customer sees the additional insurance as an extra service from the retailer who is close to his own reality. In this way, online retailers actively position themselves as helpers beyond the product purchase and strengthen customer loyalty.
Supplementary insurance is part of customer centricity in online trading
Online retailers need services that are close to the reality of their customers so that they can actually stand out from the competition. Customer loyalty measures such as bonus programs or express delivery – similar to products – are offered en masse. They are by no means always adapted to the target group. Insurance services that take away customers’ concerns about products, on the other hand, are in keeping with the times. They offer real added value and simplify consumers’ lives. This enables retailers to improve customer focus and position themselves as strong partners for their customers in the long term. This is how the all-round support is also successful.
Also read: Customer centricity – why wrong shipping packaging can destroy the first impression with the customer.
About the author: Alexander Hoffmann has been managing director since February 2020 AXA Partners Germany and Switzerland. The company also supports partners in the consumer electronics sector with innovative insurance solutions. The 54-year-old previously held senior positions at Genworth Financial, Chubb, HBOS, AIG and Standard Life.