130: A Deep Dive Into the World of Rent-to-Own with Keven Dalke

Written by Rob Stott

August 2, 2022

Keven Dalke rent to own independent thinking podcast retail

How different, really, is the Rent-to-Own industry from traditional retail? To get at that answer, we turned to Nationwide Marketing Group’s resident expert on the RTO industry, Keven Dalke. While there are certainly some very defined differences, retail and Rent-to-Own still have plenty in common.


Rob Stott: We are back on the Independent Thinking Podcast and jumping headfirst into the deep end of the rent-to-own world today with our Director of Nationwide RentDirect, Mr. Keven Dalke, appreciate you taking the time and wearing the shirt. If you’re watching the video version, the Nationwide shirt, you were ready, man. You’re ready for a podcast.

Keven Dalke: I’m ready to go. Yep.

Rob Stott: Awesome. Well, how are you doing, sir? First thing’s first.

Keven Dalke: I’m doing great. The summer is always busy for us preparing for shows and attending other shows that are in the industry. So, busy.

Rob Stott: Yeah. I mean, we’re kicking off — this is start of RTO month in Nationwide Marketing Group for our blog and everything we’re doing there when this podcast drops. So when you say busy, you do have a lot going on. So talk about… We’ll dive into your background in a second, but what is this month like for you as far… We’ve got PrimeTime. There’s another big show that happens around this time of year for the RTO space. What is it about August that makes this the month for this space?

Keven Dalke: I don’t know, but we need to try to get together and separate these events out. But one of the things being in the rental industry, APRO, who is a partner of ours and out there really looking out for the rent-to-own industry, they put together some state association shows. They’re not only August, they’re throughout the year. So in a position of with RentDirect, I like to support the rental dealers out there in those states. And I’ll attend as many of those shows as I can with my support. So that sprinkles in throughout the summer months as well.

Rob Stott: And then you have a highlight at our show as something I’ve been at once. And I know it gets very exciting and it has a name that lives up to the Hot Show at PrimeTime. Talk us through that a little bit, explain what that is for someone that’s not been and just what that means to you in this space.

Keven Dalke: Yeah. The Hot Show is very exciting. I mean, it’s been around for a long, long time, and it’s an opportunity for our vendor partners to put a special out there that they’re not going to get on the show floor, that a rental dealer’s not going to get on the show floor, sometimes limited quantities, a lot of times limited quantities. And so they’ll all grab a paddle prior to sitting down in the room. And I’ve got a great auctioneer that works with me, but she runs around, creates some excitement. Dealers will raise their paddles and will make the commitments for those buys. So it’s a really good time.

Rob Stott: That’s awesome. I look forward to attending that again and diving into it more and we got a lot to talk about, but I want to give you a chance to introduce yourself. Who is Keven Dalke? What’s your background like and your path to nationwide, and we’ll start there and then dive a little deeper.

Keven Dalke: Sure. Well, I started in the industry in the late ’80s. So coming out of college, you’re looking for that big thing. And I landed in the rental business, not really knowing what it was, but it didn’t take long to set the hook and everything that goes along with it. I just really enjoyed it. So I’ve been in this industry for over 30 years now and really enjoy the operation side of it, which I did for so many years. And now being able to transition into the buying side and more of a support for the rent-to-own dealers out there has really been great.

Rob Stott: Can you pinpoint, thinking back the one thing that did hook you, or was it just a series of things that made this space something that gets you excited and really kept you around?

Keven Dalke: Sure. Rent-to-own, it’s never the same day twice, I guess you said. And you could say that in retail as well, you get different customers coming in, but the stores, the operation is a five-to-six-person operation in my history. Some dealers are certainly larger and have more people, but it’s a very tight-knit group. So you get to know your coworkers very well and being in management, you coach and teach and bring those co-workers along. So that part of it is really fun to see somebody get promoted through the system, take a store in another state, another city, whatever is, is really fulfilling. And then the customer base being a rental transaction, where they come in to make a payment every week, every month, over a period of 12 to 24 months, you get to know that customer and really get to know their family and what’s going on in their lives. So that part of it, both those pieces together, it really draws you in and it’s a great opportunity to enjoy work.

Rob Stott: Yeah. I want to come back to that, because it’s a really cool customer dynamic, but before I forget to ask, having that length of experience in the industry, what’s been the biggest change for the RTO space that you’ve noticed or been witnessed to since you’ve been involved in it?

Keven Dalke: I think over time I’ve seen a lot of acquisitions. So I think in rent-to-own industry, more than retail dealers will retire, sell off their 10 stores or whatever and get acquired by somebody else. So I’ve seen a lot of that over time. And I think maybe that’s the biggest change, because you’re always going from operational standards on with one company to another making slight changes in how you operate the business and it keeps it interesting, but that’s one of the biggest changes.

Rob Stott: Oh, it’s interesting for sure. And I love the anecdote about the customers being more frequent shopper, because that’s something that as a retailer, you might take for granted the fact that you think of a traditional appliance retailer, you might not see that customer again for seven to 10 years, I think is the cycle. I mean, to be able to see them every single week, that just brings a whole different dynamic and importance, I think, to having good people in your business too, because that customer relationship, I mean, that’s got to be incredibly important to the RTO dealer as opposed to a… Not to say the customer relationship isn’t important in traditional retailer, certainly is, but it’s put in a different spotlight when you’re an RTO dealer.

Keven Dalke: Absolutely. If you’re talking five or six coworkers in a store, everybody’s got to have a good ability to keep that relationship going. You think about a customer coming in weekly, you can either enhance that relationship each week or it gives you more opportunity to screw it up, I guess, you have more customer interaction. So it works both ways and you got to be on your game every week.

Rob Stott: Oh, that’s interesting. It kind of I think proves the point too. Led itself nicely to what I was going to ask next. And you think about just the mindset, the reputation of RTO and I feel it gets often oversimplified when people are thinking about it like, “Oh, yep, they rent product. It’s not a traditional retail transaction,” but what is it that really differentiates this space, and how would you describe it to someone that has that traditional retail mindset to really help them understand what RTO is all about?

Keven Dalke: That’s interesting. I’ll tell you, being in the rental industry, meeting new people where I live, where I live is truly retail and going to social events and they’ll ask, what do you do? I’ve explained it numerous times. The rent-to-own industry sometimes gets a bad rap, but to me it’s very fulfilling because that customer is… It is a sale. They want that refrigerator, they need that refrigerator. They cannot go out with traditional financing and buy it. So rent-to-own serves that void of customer need. And when you work in a store as a manager or even a district manager, regional director, and you see customers fulfilling that obligation over 24 months, or paying it out early and taking ownership of that piece and that smile on their face when they own that product, it’s fantastic. And that’s what rent-to-own does, it provides that value and that service for that customer base.

Rob Stott: Obviously, there’s the transaction and some of the surface level things that are obviously similar between retail and traditional retail, I will say, and rent-to-own. What are some of those other similarities that someone might not necessarily on the surface recognize right away?

Keven Dalke: Similarities, we deliver, retailers deliver. We set up, we provide service for… Rent-to-own provides service for the customer over the length of the agreement. Retailers will sometimes do the same depending on their setup, but those are some of the things. And then as customers come in, you will always try to put them into another product, which meets their needs too. So the same things with retail, when you see a customer walking in, you’re going to try to get them set up with a new item.

Rob Stott: And then flipping the question around, you talk about the more frequent customer transaction… Customer coming into the store and things like that. And obviously it’s renting as opposed to selling, but what are some of those other differences that really differentiate the space from what a traditional retailer might do?

Keven Dalke: I think, traditional, you do look for referrals as well. One of the things that rent-to-own hangs his hat on is that customer being happy and going out and telling their friends or their family members of the great experience. So the referral business is big in rent-to-own. Just grassroots recruiting for new customers and marketing for new customers.

Rob Stott: How about challenges? Does a RTO dealer face the same challenges as a traditional retailer, or are there different things they have to worry about as opposed to, again, just a traditional retailer?

Keven Dalke: I think, when you think about inventory, the things we’ve gone through over the last couple years with COVID, inventory challenges were the same for rent-to-own dealers, as they were for retail dealers. If you can’t get inventory, you can’t get inventory. One thing that taught us, I think, in both sides of the business, was that you cannot be so focused on one vendor partner that you just get hung up and you can’t go somewhere else. I think it’s taught a lot of RTO dealers that they’ve got to diversify and have some different vendor partners available for them. The other challenges, always the coworkers, making sure you recruit and retain your quality team, especially in rental, to keep that relationship going. I mean, when a store manager moves from one store to another, the current customers will always ask if it was a good relationship, where they went? Sometimes even move to that store as a customer to move with that person, it’s not necessarily the company, it’s the person that runs the store. So it’s an interesting dynamic for rental.

Rob Stott: Yeah, no, that’s interesting. On the inventory side, you think these are appliances that are not… Obviously, it could be other product as well, but the product that come, it goes out and comes back in, so is it… You mentioned the inventory side and struggling to get product. Is it something that… How about when that product comes back? I mean, obviously, they’re prepping to get it ready for another customer, so there’s some refurbished side of things I imagine that go into that. From the inventory side, a two-prong question, what’s it like when that product come in? What’s that for the retailer, what do they have to do? And then, is it as big of a challenge because they know they have product coming back in, they can time it and things like that, or are they really truly out there looking for new product for their store or for their warehouse, I guess.

Keven Dalke: Yeah. I think, the one thing with the rental business is that they are in the furniture embedding, appliances, electronics. I mean, they’re in every major category in their store. So they’re dealing with all those products. They will order… It’s a tough balance because when inventory is returned from customers, you can’t predict, I mean, you have trends where you say, “I might do 15 returns in a week. I can expect 15 previously rented pieces to come back,” but it’s not always the case. Some weeks are heavier, some are less, and then they don’t want that return. They don’t want that product coming back. But when it does, the store co-workers are well trained to refurb. It’s making sure if it’s furniture that they are using the machines that they’ve got on hand to clean that furniture, make it look as presentable as close to new as possible. And then depending on the condition, it is put out for rerent and there is savings on those pieces as well. A lot of customers come looking for those previously rented pieces.

Rob Stott: Interesting. I mean, I guess one of those things you think about a traditional retailer, when they’re getting a return, it’s usually a customer that’s unhappy because something went wrong with the product and they want to either have it exchanged, have it fixed, bigger appliances. Obviously, they want you to come out and do it, but in those instances where something’s getting replaced, as opposed to… That leases up, in theory, and it’s being returned. So how does that impact… Are those products being, I guess in the RTO space warehouse, is obviously super important to these dealers and having the space to store product and things like that. What are some of those, I guess from the merchandising perspective, how different does a store look internally for an RTO dealer versus a traditional retailer?

Keven Dalke: That’s a great question. The traditional rent-to-own store in my history was somewhere around 5,000 maybe 6,000 square feet. In retail that just doesn’t exist. I mean, that is super small, so you divide that space up with 20% of the back room and then the showroom is the rest. And what you will see if you walk into a traditional rent-to-own store is you’ll walk into some really fantastic looking living rooms displayed, like you’d see in retail, tables, lamps, sometimes rugs, just really that home setting to get the customer to think that how would that look in my house. You’ll see bedrooms with mattresses displayed. Electronics typically on a wall, a hero wall to so to speak with 4k TVs, everything. Everything you’ll see out in retail. And then appliances will tend to be back towards the back of the showroom up against a wall with refrigeration and washer, dryers and things like that. So just a typical setting.

Rob Stott: Yeah. So when a new customer’s coming in, I think I’m trying to think from a customer walking into an independent retailer store, they might be looking for a product. Maybe they have something in their mind that they already know what they want, but that interaction between a new customer and a sales floor associated at a retail store, they’re trying to explain product and talk them through, maybe upsell throughout the process, things like that. Get those add-ons if a sale’s being made, things like that, is it similar? Is the interaction between an RT… Well, one of those RTO sales associates, and that customer, are they having the same conversations?

Keven Dalke: Yeah, absolutely. Selling is selling, just the end of that process is a little bit different in rent-to-own where they’re signing an agreement to pay overtime versus a credit card or credit application. But when a customer comes in, you’re looking at that ball cap they’re wearing or simple conversation about the weather or you’re starting to develop… You want to develop that relationship and see what really hits home. And from there, you wander around and you find what product they’re really focusing in on. And then you can talk about specifics about the product. And I think that’s the same in retail as it is as rental. And then, rent-to-own has add-ons as well. So if you’re talking upsell, you’re talking a bedroom set with a mattress, you’re talking a TV with a sound bar, all those things play in rental as well.

Rob Stott: Well, I think the interesting and important connection that could be made is that different type of business, but the way you go about it, there’s a lot of similarities. And the experience at the end of the day is customer-centric and you don’t want to really deviate from that. And they just are very similar in nature.

Keven Dalke: Yeah. End of the day, you’re trying to match a customer with a product to make them happy for either their need or their want, whatever it is. Those things are the same.

Rob Stott: It lends to follow up on that. Is there a situation, I mean, especially over the last couple of years with so many changing business models and retailers looking to adjust on the fly, deal with the pandemic, we’re coming through the pandemic now at this point, but have you seen a lot of, I guess it works both ways. Retailers that are trying to get into the RTO space or RTO dealers that want to be more traditional retail, is there a lot of that crossover that happens?

Keven Dalke: Yeah. One of the things that’s really asked earlier what’s changed and the one thing that has changed, and I didn’t say it, but the one thing that has changed is that secondary finance options, they’re everywhere. You see them everywhere. And not just a few years ago, retailers were starting to pick up on that and they were putting this option in their retail store. So for a rent-to-own dealer, they were seeing some of their business go down the street to a retailer because they could. So that’s been a big battle for rent-to-own dealers to keep up with. And I wrote an article last year, I think, and it was talking about if retailers can take some of the rent-to-own customers, then rent-to-own needs to take some of that retail customer back and fight for it.

So meaning that your store needs to look fantastic when you walk in, it needs to have a look of, I can’t tell if this is a retail or a rent-to-own store and the pricing, everything has a cash price on it, or a sale price on in rental, as it does in retail. So I’ve seen many customers walk into a store and say, “Oh, I didn’t know you actually sold that living room set. That’s a great price.” So the dealers today really need to focus in on that and make sure they’re presenting in a manner that pushes retail sales as well.

Rob Stott: No, that makes a lot of sense. Is that a hard mindset for an RTO dealer to overcome the fact that they can sell product?

Keven Dalke: Sometimes because the value in that transaction is obviously making your money over time as a dealer. So sometimes they’ll shy away from a retail sale, but it still has its profit margins in the retail sale as well.

Rob Stott: Oh, I mean, makes perfect sense. If you bump into that type of RTO dealer where they are not unwilling or just not really open to the idea. What’s your pitch to them about how they can go about making that transition and doing it in a successful way?

Keven Dalke: Well, I mean, it’s really pretty easy because they all know that this option is out there for retailers and they want to go at that as often as they can and try to combat that. So that’s easy to start the conversation and even retail or rent-to-own dealers will sometimes pull one of those options into their store as well. So if a customer comes in and has that mindset that I’m looking for retail, sometimes it’s hard to convince the customer that this is a great option for you. Then you can say, “Oh, well, I do have this option for you as well, if you want to just purchase it outright today.” So that’s a great way to combat that.

Rob Stott: Obviously, marketing plays a big role in that, getting that message out to the customer base. Is it very different with the space is blending and RTO dealers and getting out away from, I guess the traditional thoughts of how they would want to market and things like that. Has their message, or it’s going to depend market to market, things like that. And you’re not going to have the same message necessarily on the east coast as you have on the west coast, that sort of thing, but how has marketing changed in the RTO space or are they talking about themselves differently? Or can they, I mean, from your perspective, can they change their message or should they change their message and how they’re positioning themselves?

Keven Dalke: Well, that’s a good question. I think pandemic raised the importance of a social presence for retailers as it did for rent own as well. And some of those dealers who did not even have a website certainly got into it because you had to. So I think, everybody upped their game into website and social media, I think marketing, you have to tell your story and talk about all those pluses that come with the rent-to-own transaction, whether it be free delivery, which you may or may not see in retail, whether it might be that service that comes along with it for two years, and I will come to your house and I will fix it, or I’ll give you a loan that you can use. There’s all these pluses that the rent-to-own transaction has with it that they’ve got to tell that story, because not everybody knows it.

Rob Stott: Yeah. That’s very true. And it opens up a whole Pandora’s box. Time wise, I want to be cognizant of how long people have attention spans these days listening to podcasts, but thinking about the website side of things and how important… They obviously haven’t been super important traditionally in the RTO space. I imagine you want that customer coming into the store to make payments and things like that. So I guess, websites aren’t necessarily… Are they transactional or have they been, or are you seeing them become more transactional over time?

Keven Dalke: Yeah. The websites have been important for a long time for rent-to-own. It is different in the fact that the closing of the agreement or the actual purchase in a rental transaction requires a customer to sign an agreement that they’re going to keep up that payment as long as they want to really, they can return at any time. But so it’s different on a website than it is for a retailer. So that piece is difficult to get through, but showcasing accurate products, the things that you carry day to day and even keeping up with inventory levels on your website to say that piece is no longer there and you take it down and things like that, need to be done in the rental industry as well.

Rob Stott: Yeah. Important should have been a wrong term. As far as the end result and how a customer goes about working with the RTO dealer, but the strategy and use of that website obviously still has a lot of meaning to an RTO dealer, but it’s just a different way of thinking about it, as opposed to a traditional retailer that’ll have a shopping card on their website and be able to complete a purchase or something along those lines, as opposed to showing what’s available and really as the RTO dealer, you’re using that site to drive that traffic into your store, which traditional retailers want to as well, they obviously want you into the store so they can upsell you and get those attachments and get that experience and hook the customer and guarantee the sale, but just a different way of thinking about those things.

Keven Dalke: Yeah, absolutely. And again, the final transaction with the payment is definitely a challenge in rent-to-own to make that happen through a website.

Rob Stott: Cool. Well, Mr. Dalke, like I said, we could go on for hours, I think. It’s just a really interesting space and appreciate you taking the time with us today and kicking off our RTO month here on Independent Thinking and look forward to catching up in Orlando soon enough before we know it. And until then, safe travels to you and enjoy your time globetrotting around and covering the RTO space for us.

Keven Dalke: Thanks, Rob. Appreciate it.


Connect With Us!

More Podcasts

215: Understanding the Cost of Doing Business as an Independent Retailer

215: Understanding the Cost of Doing Business as an Independent Retailer

What if there was a way to benchmark your business against others in just about every aspect? That’s exactly what NMG’s new Cost of Doing Business study aims to solve.

214: Victrola Helps Bring Vinyl Back Into the Mainstream

214: Victrola Helps Bring Vinyl Back Into the Mainstream

Victrola is helping independent retailers capitalize on the resurgence of the record industry by offering innovative and modernized turntables. Don Inmon, head of product and brand there, dives into the category and their portfolio.

213: A Furniture, Bedding and Outdoor Update with Jeff Rose

213: A Furniture, Bedding and Outdoor Update with Jeff Rose

It was a truly action packed PrimeTime for the NMG Furniture, Bedding & Outdoor team. At the end of it all, we caught up with Jeff Rose, VP of the division, to talk about the new vendor introductions, the first-ever tour offered to Members of the World Market Center campus and other trends impacting the furniture, bedding and outdoor industries.