Brick-and-mortar rent-to-own dealers face many of the same challenges as traditional retailers today. Among them, how to increase sales, drive customer foot traffic, increase web conversions and manage inventory levels. There’s also the continued growth of e-commerce, which, according to Statista, is expected to see 2.14 billion consumers buy goods or services online in 2021 — up from 1.66 billion in 2016.
Despite the inherent challenge that e-commerce presents to the brick-and-mortar rental community, it’s also a much-needed asset for dealers. Consumers may still prefer to look at and feel products in-store, but before they ever step foot in a store, they’re starting their shopping journey today almost exclusively online. That makes it imperative for dealers to have their own website where customers can discover what they have to offer.
One of the key benefits with e-commerce business is the ability to collect data from shoppers, including customer preferences and buying pattern trends. This data can track what items are left in a cart, deliver exclusive deals and discounts, and encourage customers to leave a review of the business.
But what are the solutions to these challenges for rent-to-own today? The brick-and-mortar rental store offers a customer that unique experience, such as local pick-up and delivery. Plus, they can offer better deals, as well as price matching, which creates a lasting customer relationship. Rent-to-own also provides instant gratification by delivering that 75” TV today! They are local businesses that can offer a product that the customer can see and feel as well as ask detailed questions about to a trusted sales rep, giving them peace of mind over a 100% e-commerce purchase.
Dan Singh, CEO of Dial Rent to Own, a 10-store operation in Puerto Rico, shared these insights looking back on 2020:
2020 changed the character of our business and caused us to redefine our goals and the operational paths in which to attain them. Our challenges included government shutdowns, the lack of available inventory from manufacturers and employee shortages. 2020 has transformed our thinking and our operations.
One notable way we met those challenges was by rethinking rental payments. We focused on keeping rented products in the hands of customers who want to pay but, due to no reason of their own, cannot. We moved beyond the days of “pay or return.” We doubled our efforts at account extensions and flexible payments. Because of all of this, we experienced a renewed loyalty by our customers.
Travel restrictions also changed the way we manage remote locations. We made investments in our video systems, which helped us review operations from afar. Regular video communication is a new normal for us and keeps employees connected and management in touch with our various markets.
Rhiannon Smith, purchasing manager with A Plus Rent to Own, Inc., a 14-store operation based in Kingston, Tennessee, shared her 2020 experience:
The main issue we faced in 2020 was inventory. We struggled to keep our stores stocked due to lack of merchandise availability from our vendor partners. We were forced to buy appliances from national retailers at times throughout the past few months just to have appliances available to rent in our locations.
With furniture, we began searching and buying from vendors that we had not used prior to the pandemic. However, we were fortunate that we had previously purchased in bulk while attending Nationwide PrimeTime events, and we were able to pull from our warehouse to stock our stores.
Overall, this has been a trying year, but I am pleased to report that our stores have grown tremendously, and 2020 turned out to be a very successful year for us.
These comments show the resiliency, flexibility and strength of the rent-to-own business. In addition, I know that brick and mortar rent-to-own is, and always has been, a high-relationship, loyalty-driven transaction with the existing customer base. This essential quality has never been as important as it is today.
This article was first published in the March 2021 issue of Retail Observer.
Keven Dalke is director of Rent Direct at Nationwide Marketing Group