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1 Aug

Adding Peace of Mind to Porch Piracy

Shopping online is likely to be easy, but receiving purchases in a single piece is getting harder and harder.

In response to SafeWise data cited by CNBC, 260 million packages were stolen last 12 months, at a loss value of a staggering $19.5 billion. Meanwhile, 860 million packages arrive damaged every year. Consumers might curse the delivery firms, but brands normally draw the criticism if situations aren’t handled in a timely, transparent way. In actual fact, studies show that 84 percent of consumers won’t shop at a merchant again after a foul shipping experience.

Amid the rise of e-commerce and online deliveries, it’s change into mission-critical to proactively protect purchases and ease the navigation of any problems — especially for digital natives impatient with cumbersome legacy claim-filing systems.

WWD caught up with Woodrow Levin, serial entrepreneur and founder and chief executive officer of Extend, which lets merchants offer prolonged warranties and protection plans through easy-to-integrate APIs or pre-built e-commerce applications like Shopify, Salesforce Commerce Cloud or others. The corporate has raised $325 million from investors like PayPal and American Express since its founding in 2019, and currently works with retailers One Kings Lane, Good Earth, Peloton, Michaels, Adorama, Visionworks, Z Gallerie, Jomashop and more.

WWD: You didn’t come from the style or retail industries, so how do your past experiences inform your current?

Woodrow Levin: I began in options trading in Chicago, after which I began a video game company in a digital secure deposit box with permission sharing. Most recently with Extend, we started off focused on prolonged warranties and protection plans for durable goods. The connective tissue for me was all the time to search out ways to make use of technology to enhance on old processes or to resolve problems. With Extend, consider us as AppleCare for every part.

WWD: What was the white space that you simply saw within the retail industry? Did you’re feeling that other firms were approaching the issue incorrectly or not enough?

W.L.: We saw the most important retailers, each online and offline, offering prolonged warranties and protection plans on the products they sold to do two things. One, to extend margin on each sale, which is super necessary right away as all firms are focused on profitability, margin and competing with the behemoths of Amazon and Walmart and others. Number two, prolonged warranties and protection plans, very similar to shipping protection, increase customer peace of mind when making purchase decisions.

We saw that the highest 1 percent of shops were all offering these value-add services to customers at checkout, but the remainder of the market wasn’t being served. We said, can we use technology to assist transform commerce very similar to Stripe did for payments, or Affirm and Klarna and Afterpay did for buy now, pay later.

Once we searched for inspiration on a successful paradigm, we got here upon AppleCare — it was digitally native, modern, transparent, and the worth was being driven to consumers somewhat than legacy firms who depend on breakage, confusion and hard-to-file claims.

Woodrow Levin

WWD: Are consumers increasingly aware of porch piracy and the choice for defense plans?

W.L.: Just take a look at areas beginning to pilot programs with centralized locker centers where packages will be delivered because porch piracy has change into such an issue. That is the local government saying we recognize this as a difficulty and listed below are secure lockers with a passcode for residents to go pick up their packages. It is completely something that folks are aware of, and we see 52 percent of consumers elect so as to add shipping protection at checkout, with a 13 percent average attach rate for product protection.

Extend isn’t just for major purchases like furniture and jewellery and electronics, but will be for anything sold online — fashion, beauty, apparel, consumables — because the fee to guard them is pretty minimal.

WWD: So, what’s the fee and process for defense?

W.L.: Shipping protection is obtainable to the buyer at checkout and is often around 2 percent of the cart value. It’s a minimal fee for security and peace of mind for defense against lost, stolen or damaged packages during transit.

Nearly all of people coping with a difficulty interact with Extend through our AI-driven claims bot named Kayley, who is on the market 24/7, 12 months a 12 months, and the experience is like texting with a friend. She handles 98 percent of interactions in under 90 seconds. We do have a U.S.-based call center that’s available six days per week if someone prefers to choose up the phone and file a claim that way, but nearly all of our customers prefer to just do it through their phone or a tablet or computer with Kayley.

WWD: So, ease of experience is the main target?

W.L.: People don’t like coping with insurance firms. I do know firsthand how frustrating it could possibly be waiting on your packages to be delivered after which have them taken right off of your porch or apartment mailroom. We’re attempting to ensure that after you buy a product from a retailer, and a package is lost, damaged or stolen, that you will have a white glove, hassle-free path to resolution as a consumer.

[Theft] is beyond a brand’s control. It’s even beyond the carrier’s control. So, how do you create the simplest path to resolution that reflects well upon the merchant, so the shopper will come back and be loyal to the brand?

WWD: What makes Extend more seamless?

W.L.: Without Extend, there are frequently three to 5 touchpoints with a customer before they’ve a resolution. Sometimes, the retailer will send a substitute item to “make the shopper whole,” or they may tell them to file a police report.

But with Extend’s AI-driven chatbot, it literally takes 25 to 30 seconds to file a claim. Depending on how we integrate with the merchant, the shopper normally gets an email with a virtual bank card to right away go to that merchant and buy a substitute product. There’s no waiting for a prepaid debit card within the mail or a check to return. Consumers can immediately shop and get a substitute item, hopefully in time for his or her event if that’s the case.

WWD: What’s the profit for merchants?

W.L.: Extend pays the merchant for that substitute product — plus sales tax and shipping costs to get it to the buyer. So, the merchant gets to record this as a net latest sale, and keep that spend of their ecosystem. We’re turning that negative right into a revenue-generating opportunity.

Merchants may increase their margin because they get a percentage of every protection plan or shipping protection plan sold. It’s bottom-line net revenue, and there’s no performance obligation related to it. Extend focuses on reducing operational overhead because we’re handling all of those clients. It’s removing the financial risk of shipping issues. After which it’s improving customer loyalty and lifelong value, because we’re turning a negative experience right into a positive one.

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