Reducing Costs and Waste in the Furniture Industry with Digital Warranty Management

In the UK alone, more than 22 million small pieces of furniture are thrown away annually. With the furniture industry expected to expand at a CAGR of 5.5% from 2021 to 2028, and market size increasing from $493.6 billion to $720.2 billion, this number is anticipated to go up due to the prevalent throwaway culture as people find it ‘easiest to get rid of things’.

The question is, what are some of the underlining issues behind this mindset?

The lack of repair practices tops the list, primarily due to a poor understanding of warranty rights and the limited availability of repair facilities. The main culprit behind this is the conventional warranty management mechanism plagued with inefficient, complex and costly claim management. 

As a manufacturer or retailer, you can save your customers from the frustration of dealing with ineffective warranty management by equipping your business with digital warranty management. In this post, we have shared 6 benefits of how this simple transition can lower costs, build customer trust, enhance post-purchase experiences and increase revenue. 

Let’s get started:

Increase the Understanding and Accessibility of Warranty Rights Through Real-time Product and Warranty Information

In the UK, less than 10% of people consider repairing or restoring broken items. A few reasons for this throwaway culture are that it's easier, people don't know what to do with broken items, and replacement is often cheaper than repair.

Digital warranties can play a significant role in reducing this number as they make it cheaper and easier for people to avail repair rights and increase knowledge accessibility of what needs to be done if there’s an issue with the fabric or the hardware. 

As a manufacturer or retailer, it will not only allow you to provide your customers with up-to-date product, warranty and repair information directly on their cellphones anytime and anywhere, but it will also enable you to develop a detailed database of who has purchased your products and which one, what is the warranty period for each of them and at what stage are each of the warranty claims. Instead of keeping massive paper documents or having complex Excel sheets, your warranty team will have detailed and organised data directly on their desktops.

Simplify Warranty Claims and Reduce Fraud Through Automated Claim Process

One of the biggest hurdles in availing warranty rights is the complex claim process, which usually involves lengthy phone calls and email cycles. This process is specifically more stressful when the furniture has to be sent to the workshop to check for issues. It’s expensive, stressful and inconvenient. 

Digital warranty management simplifies this by automating the claim process. It saves cost and effort for both you and your customers. Here’s how:

• Instead of rummaging through their drawers to find the receipts and other documentation, your customers can simply open the warranty app, check their warranty status and register a claim, all within a few seconds without any calls or emails. 
• Digital warranty management systems are accompanied by automated claim verification, which means you don’t have to worry about fraudulent claims. The system will check and discard such claims on its own without any input from your side. 
• You can share real-time claim updates with your customers directly through the system, eliminating the need for any calls or emails. 

Increase Customer Satisfaction and Brand Loyalty Through Efficient Repair Management

Brand loyalty isn’t really a thing in the furniture industry with 80% of brand-conscious customers in the UK switching brands based on promotional deals or considering more than one company when making a purchase.

Given that, just a sofa costs around £1,200, ensuring your prospective customers they’ll get superior repair management, with minimal paper or travel involved in case of an issue, can set you apart from your competition. 

In addition to instilling brand loyalty and enhancing customer satisfaction, improving post-purchase experiences can also provide you with free marketing. Your loyal customers will serve as your marketing ambassadors by sharing their positive experiences with others and recommending your brand to friends and family. This can help to increase your customer base and generate new sales opportunities.

Improve Product Quality Through Enhanced Data and Analytics

Furniture is big, bulky, and heavy, and has much more complex transportation requirements than everyday items. Given that a major chunk of the EU's furniture is manufactured in China, this issue has become more prominent in recent times due to a 1200 percent hike in container costs since the start of the pandemic. As a result, companies are bringing manufacturing closer to home, termed ‘nearshoring’ or ‘reshoring’.

This means they require much more sophisticated data and analytics to maintain or improve the quality of their products while keeping costs manageable. The in-depth data and analytics provided by digital warranty management can do just that with minimal cost investment. Here’s how:

• Detailed data will show which parts of the furniture are malfunctioning and what’re the reasons, for instance, poor fabric quality or the type of wood.
• Through warranty data, you can figure out which one of your production facilities is causing product issues and requires upgradation.  
• By sharing updated product quality data with your design and R&D teams, you can improve upon the existing and future furniture designs and materials.
• Through customer analytics, you can understand purchase trends and design new products or market existing ones for added revenue. 

These benefits aren’t just applicable to nearshored production facilities. If you are sourcing from abroad, then detailed warranty data and analytics can help you identify which of the suppliers aren’t quality compliant and assist in negotiating with them.

Reduce Carbon Emissions by Lowering Furniture Waste, Paper Use and Transportation  

Sustainable manufacturing is the present and future of manufacturing. If you want to stay on top of your competition then you need to incorporate environmentally friendly business practices. This will not only help you play your part in protecting our planet but it will also unlock a new customer base - eco-conscious consumers - for you. To learn more about sustainable manufacturing head over to ‘The Ultimate Guide to Sustainable Manufacturing’.

Digital warranty management is a simple, easy and cost-effective way of starting or expanding your sustainable manufacturing journey. Here’s why:

• By digitising warranty management, you minimise paper usage through digital warranty documentation, user and care manuals and product information. 
• By promoting repair over replacement culture, you will help reduce furniture from ending up in landfills. This will not only reduce waste production but it will also have an impact on deforestation and wood wastage. For context, more than 33% of people in the UK are throwing away still functional furniture that could have been donated or sold.
• Furniture transportation requires much more space and emits higher carbon emissions as compared to other daily items, therefore, by ensuring each product is used to the fullest you can help reduce significant environmental impact.

Increase Revenue and Reduced Operational Costs 

Last but not least, digitised warranty management can save you costs and increase your revenue in multiple ways depending on the solution you are employing. Some of the main ones include:

• Reducing warranty costs by improving products based on warranty data and analytics. By analysing warranty data, you can identify trends and issues and make necessary changes to improve product quality and reduce the frequency of warranty claims.
• Your company doesn’t become a victim of fraudulent warranty claims, which if not taken seriously can eat up 2% to 4% of your revenue. Digital warranty management systems cross-check incoming warranty claims against the customer data and discard the fraudulent ones. 
• Increasing revenue through untapped marketing potential and improved customer satisfaction. By using digital warranty management to improve post-purchase experiences, you can enhance customer satisfaction, which can lead to repeat business and positive word-of-mouth marketing.
• You lower costs associated with warranty management. This is in terms of paper usage, transportation and warranty administration.

How Does iWarranty Help Furniture Manufacturers and Retailers in Adding Value to Business?

At iWarranty, we take pride in revolutionising warranty management through AI and machine learning to make it simple, sustainable and accessible for your customers and profitable for your business. 

Here’s how we can transform your post-purchase customer experience:

• Our comprehensive warranty management platform consists of desktop software for warranty management teams and a consumer app for customers. They are seamlessly integrated with each other to provide instant updates on both ends.
• Customers can make instant warranty claims directly from their phones within seconds. In addition to this, they receive regular updates on where their product is in terms of the repair journey. 
• We have our own repair network with over 500 repairers. You can integrate your external repair partners as well. The platform allows you to communicate and send and receive updates from both the customers and the repairers, bringing all the elements of warranty management together. 
• Our warranty management solution collects and analyses warranty data in real-time to provide you with in-depth details on your warranty costs, malfunctioning products and specific parts, customers' purchase habits and improvement areas, which you can use to enhance product design and tap into new customer bases. 
• The warranty management platform is equipped with one-on-one communication, eliminating the need for long-hold phone calls and complex emails.
• The whole warranty process is automated, including fraud identification. The system cross-analyses the claims against customer data and decides whether a claim is legit or not. In case of a fraud attempt, the claim is automatically discarded. 

All in all, digital warranty management can add significant value to your business by easing the complex warranty claim process for both your customers and the warranty team. You will not only save cost and increase revenue, but you’ll also be able to showcase your business as striving to become planet positive by embracing sustainability through reducing furniture waste. It is a win-win for the planet and the pocket!

To learn more about how we can transform your business, reach out to us by filling out the contact form below.